Maduro steps up socialist model through more controls

Regulated profits and centralized imports are part of the scheme

Ten years of foreign exchange control. In 2008, monetary conversion was implemented to abate inflation. Planning Minister Jorge Giordani talks about building socialism with shortage as the starting point. These days, people storm stores to buy at discounted prices (File photos)
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Saturday November 23, 2013  12:00 AM
Centralization and control. The measures announced by President Nicolás Maduro involve stepping up the socialist model the government has been trying to implement since 1999.

The National Foreign Trade Corporation (whose establishment has not yet been published in the Official Gazette) will be the agency in charge of administrating foreign exchange for the public and private sectors.

The Foreign Exchange Administration Board (Cadivi), the Ancillary Foreign Currency Administration System (Sicad), the Foreign Trade Bank (Bancoex), public banks, as well as a corporation that will tend to public and private imports, will all be under the command of the National Foreign Trade Corporation.

Furthermore, the government aims at updating the record of private businesses that apply for US dollars and at centralizing imports. Maduro wants to go further still by deciding what goods will be imported and whether they can be brought into the country at a lower cost.

A few days later this turned into widespread inspections in stores and industries; with authorities initially making owners cut prices on domestic appliances, and then extending this measure to include motor vehicle parts and components, and clothing, among the most representative items.

The idea is to exercise control over profits as a medium term objective. Incidentally, Maduro has just enacted a Law on Costs, Prices, Profits, and Salaries, which will set 15-30% profit margins for businesses.

The socialist economic model defined by the government some years ago is intent on reducing the role of the private sector in order to give way to new forms of social property. Accordingly, the private enterprises themselves must be transformed.


Translated by Sancho Araujo