Venezuelan Public Make Use of Price Controls

Researcher Harry Greatorex walks the centre of the Andean city of Mérida to find out the public's impression of the government’s crackdown on high prices and speculation.

By Harry Greatorex
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Researcher Harry Greatorex walks the centre of the Andean city of Mérida to find out the public's impressions of the government’s crackdown on high prices and speculation.

This weekend saw queues around the block at selected stores across Venezuela as bargain-hunters arrived in search of discounted electronics goods, clothes and medicine as the Venezuelan Government stepped up its fight against price speculation and hording.  The enforced discounts are being implemented by Venezuela’s consumer protection agency where prices are judged to have been artificially inflated. While the private press has widely reported the limited instances of looting, on Saturday a relaxed environment prevailed in Merida’s town centre as officers from the National Guard entered several stores to supervise reductions. Their involvement continues the late president Hugo Chavez’s long-standing strategy of using military manpower to give impetus to projects to help the poorest.

With Christmas around the corner and prices down by up to seventy percent in targeted stores, the government inspections are being felt in the pockets of Venezuelans consumers. At Kristy’s clothes store, three generations of one family used the imposed store-wide 50% discount to buy new clothes. Alba, Morliana and Lilia described the reductions as a necessary action in the face of increasing price speculation. Alba said that “I hope that it will continue and not just be left at this. This has helped us so much… Before the prices were all different to what had been advertised so it was difficult to even bring the right money. At times they were as much as four times what the goods were really worth, with prices rising all the time.”

At Yamil electronics store, goods arrived as faster than people could buy them as vans shuttled hoarded goods from the owners’ warehouses. One shopper queuing to purchase a discounted television accused retail owners of using the official exchange rate to buy cheap dollars to sell on the black market. “We agree with the government’s decision. In anywhere else in the world you make fifteen or twenty percent profit, not one or two thousand percent profit. It’s economic warfare.”

Other bargain hunters were less approving of the government action. Students Belkis and Renson saw the new scrutiny around prices as an attempt to centralise power over the retail sector. However, away from the selected stores, the public action is already having a broader effect on the cost of goods. One shopkeeper was already slashing prices on his own initiative, saying that he preferred to do so himself than be forced to. He added that he planned to leave the country as a result of the increased attention to his business practice, saying that ‘there is no life here in Venezuela’. Other shopkeepers have simply chosen to lock up and leave town to avoid investigation of their accounts.

Outside the Traki department store, retail worker Fernando praised the enforcement of the regulations on pricing, saying that he had previously had to work for two weeks to buy two pairs of trousers. He commented that even opponents of the price controls were taking advantage of them, saying that “Everyone is content with this decision. The only ones who are not happy are the stores themselves.”

Harry Greatorex is a doctoral researcher for DEV at the University of East Anglia, UK