Venezuela’s legislature is expected to give President Nicolás Maduro decree powers for a year after a dissenting ruling party lawmaker was stripped of her parliamentary immunity on Tuesday and replaced by a government loyalist.
The lawmaker, María Aranguren, said the government trumped up charges of embezzlement and conspiracy to commit a crime against her as part of a witch hunt meant to obtain the last vote it needed to adopt the enabling law.
Maduro first asked the legislature to give him special powers in October to fight corruption and “economic sabotage.”
On Sunday, the government announced the arrest of store managers in what it described as an “economic war” between the socialist state and unscrupulous businessmen. “They are barbaric, these capitalist parasites!” the president alleged on Thursday. “We have more than one hundred of the bourgeoisie behind bars at the moment.”
Shopkeepers justified this year’s price spikes by saying they have been forced to buy dollars for imports on the black market at nearly ten times the official exchange rate.
According to the libertarian Cato Institute’s Steve H. Hanke, Venezuela’s bolivar has lost more than 62 percent of its value against the American dollar since its former socialist leader Hugo Chávez died of cancer in March after spending fourteen years in power. Maduro, his former deputy, won just over 50 percent support in a presidential election that was called a month later.
His government has responded to high inflation by imposing strict capital and price controls. “But those policies have failed,” writes Hanke, “resulting in shortages of critical goods, such as toilet paper, without addressing the root cause of Venezuela’s inflation woes.”
Official figures insist that inflation is just over 50 percent but Hanke puts it at 283 percent.
Maduro blames “bourgeois parasites” and intends to use his decree powers to set legal limits on companies’ profit margins at between 15 and 30 percent. He also promises “zero tolerance with speculators.”
A more likely cause of Venezuela’s high inflation is its unbridled monetary expansion which has been necessary to pay for the generous welfare state Chávez erected. Revenues from the nationalized oil companies allowed the state to subsidize education and food as well as social housing but lack of investment has hampered the industry’s development, forcing the Latin American country to import refined oil products even if it is the world’s tenth largest petroleum exporter.