Dictator's power grab tanks Venezuaela's economy


Hugo Chavez and the collapsing state
You will see the pronouncements and posturing, but you won't see this in the news.

Hugo Chavez has accused companies of holding back produce in order to artificially inflate prices.

"If they remain committed to violating the interests of the people, the constitution, the laws, I'm going to take the food storage units, corner stores, supermarkets and nationalise them," Chavez said during a televised broadcast. "So prepare yourselves!"

In recent months, basic goods such as sugar, pasteurised whole milk and meat have been in short supply in supermarkets.

Producers complained that price controls had left them unable to make their businesses profitable forcing the government to end value added tax on basic goods and announce subsidies for producers.

Warehouses raided

Venezuela's consumer protection agency and National Guard have raided warehouses and confiscated tons of food they say vendors were unwilling to sell at the official price. The seized food was then sold at low-cost markets and makeshift distribution centres.

Chavez said his decree permitting the takeover of food stores and warehouses would take effect as soon as it is published this week.

Venezuela's nationalized oil companies are losing efficiency as well. It seems too much money is being diverted from the companies into the general economy and they can't maintain the infrastructure.

Socialism and centrally planned economies don't work.

This is one reason why Hugo Chavez keeps trying to pick a fight with the United States. He wants to be bailed out.

After all, it worked for North Korea.

— NeoWayland

Posted: Sat - February 17, 2007 at 03:30 PM  Tag


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