The Executive indicated the announcement -through its regulatory entity in commerce- with a social media post stating how much flour, sugar, rice and other products should sell for. The message raised a powder keg and, minutes later, it was deleted.
The specter of scarcity has awakened in Venezuela after the The Government announced the return of price controls on more than 40 mass consumption products, a policy that in the past resulted in generalized shortages and which seeks, as before, to combat inflation and speculation.
Faced with a “alteration in the dynamics of prices”, the Executive came out – through its regulatory body in commerce- with a publication on social networks in which established how much flour, sugar, rice should be sold forand other products. The message raised a powder keg and, minutes later, it was deleted.
After that threat, the pro-government deputy Jesús Faría, president of the Parliament’s Economy and Finance Commission, confirmed that the Executive adopted “ ;a set of decisions to establish maximum retail prices for more than 40 products”, without specifying which items will be within this control or when the measure will enter into force.
In the opinion of the economist Litsay Guerrero, a researcher at the Center for the Dissemination of Economic Knowledge (Cedice), the Government is trying to improve the perception of the population regarding its management of the rise in prices, which in November reached 21.9%, according to estimates independent.
With this announcement, the so-called Bolivarian revolution seeks to send the signal that it wants to carry out actions that allow solving these problems. The point is that this is not the way to solve them(…) is a problem that will not be solved by reintroducing prices,” he said.
A sleeping monster
Yes well the last few years were of “disapplication” of price control, it continues to exist, since “there has not been a repeal” of the regulations that give effect to this policy, including the Agreed Prices Law, created in 2017, Guerrero recalled.
“What we have is that sleeping monster that – at any time- you can wake up.Until now, it seems that it is looming, although there is nothing concrete, and what it generates, of course, is uncertainty”, he said.
This uneasiness is directly related to the history of controls that Chavismo implemented starting in 2003 and which have been hardened in the last decade, when the Government decided the price of numerous essential products and services, many of which were no longer available to consumers.
As a result of these policies, the most basic food, medicines, and personal hygiene items were in short supply in shops, around which hundreds of people stood up every day in queues hoping to buy something.
These scenarios became common and intensified with massive inspections and arrests of managers of commercial establishments, especially between 2015 and 2018.
Rising prices
The return of control occurs in the midst of a rise in prices, associated with the rise in the value of the dollar, which increased by 42% in the first 20 days of December, which has a direct impact on the goods and services, mostly calculated in US currency.
Only between December 9 and 16, the price of a kilo of meat rose from 78 bolivars to 117 bolivars in a store in Caracas , which represents an increase of 50%.
The store manager, Grecia Reinoso, said that it is unfeasible to impose the same price for all businesses, which have suppliers different and handle different quantities of merchandise -depending on the size of the establishment-, which causes their costs to vary.
Price control “can generate shortages. There will be products that, at least we, the small businesses, will stop selling,” added the 27-year-old woman who, like all Venezuelans, still does not know when this measure will see the green light.