Maduro Makes Moves toward Economic Reform as New Poll Predicts PSUV Win

Caracas, October 22nd, 2015 (venezuelanalysis.com) – Venezuelan President Nicolas Maduro unveiled  a series of economic measures on Tuesday following the release of a new poll predicting a victory for the ruling United Socialist Party (PSUV) in December parliamentary elections.

Among the measures are various modifications to Venezuela’s Fair Price Law aimed at fighting speculation by private retailers, which has become rampant amid soaring inflation.

A new category of maximum price will applied to all goods and services, stipulating a 30% maximum profit for retailers determined on the basis of “real costs of production and commercialization”.

Within this new schema, importers will be entitled to a maximum profit of 20%, while domestic producers will be allowed to take in a 30% maximum gain in an effort to stimulate national production.

By capping profits in each rung of the production chain, the government aims to put a halt to the speculative spiral rapidly driving up the prices of everyday goods, which constantly erodes the purchasing power of Venezuela’s popular sectors.

Additionally, Maduro announced a modification applying to food and health services, a category, which the government says has been manipulated by private retailers. The new “Fair Price” registry will be determined unilaterally by Venezuela’s National Superintendence of Fair Prices over the next 30 days.

In order to enforce the new “fair price” regime, Maduro also unveiled tougher punishments for speculation, which will be detected by evaluating the net income of private firms in light of new regulations on maximum price and maximum profit.

The government will now impose steeper penalties on retailers who remark the price of goods, which may include jail time. Furthermore, the common practice of fixing prices on the basis of the parallel dollar will now be considered an offense.

Apart from measures against speculation, Maduro also announced a 30% across-the-board salary increase for public sector workers and armed forces personnel, which comes on the heels of a 30% raise in the national minimum wage announced last week. The salary adjustment was coupled with the approval of 110,000 new pensioners as part of the national pension system, which has been massively expanded under the Bolivarian administrations of Chávez and Maduro.

Lastly, the Venezuelan president indicated that the ministries of industry and commerce would be fused in order to better coordinate efforts to combat speculation and guarantee the distribution of essential goods.

Chavismo Leads in New Poll

The new measures come after a new poll sees the PSUV leading by a wide margin in upcoming parliamentary elections this December.

Published by the private polling firm Hinterlaces on Sunday, the poll found that 41% of respondents said they would vote for Chavista candidates in contrast to 24% who stated their intention to vote for the opposition.

Meanwhile, 18% of respondents replied that they would not vote for neither Chavismo nor the opposition.

The poll was conducted between September 18 and 23 using a sample pool of 500 adults drawn from the largely Chavista state of Vargas.

Brazil Drops Out of Electoral Monitoring Mission to Venezuela

Brazil’s Supreme Electoral Court announced Tuesday that it would be pulling out of the UNASUR observer mission tasked with observing Venezuela’s December 6 parliamentary elections.

The move came after the Venezuelan government allegedly barred former Brazilian Supreme Court Chief Justice Nelson Jobim from leading the international mission.

Jobim served as justice minister for rightwing Brazilian President Fernando Henrique Cardoso before going on to join center-left President Luiz Ignacio Lula da Silva’s cabinet as defense minister.

The Venezuelan government has yet to issue a formal statement confirming or denying the Brazilian allegation.