Mérida, January 22nd 2010 (Venezuelanalysis.com) – To curb price increases by businesses following a recent adjustment in the official exchange rate, the Venezuelan National Assembly passed a law reform on Thursday that will make it easier for the state to take custody of the provision of goods and services that are considered vital to the public welfare.
“In the present situation, the economic reality is being overwhelmed by speculative activities, hoarding, marking up of prices, usury, economic crimes, and other related crimes that gravely affect the right of the people to have access to goods and services, threatening the peace and economic stability of the country,” stated the National Assembly in the introduction to its reform of the Law for the Defense of People’s Access to Goods and Services, or INDEPABIS Law.
The reformed law grants the Venezuelan president the power to decree special measures to guarantee the accessibility of goods and services that are “essential and indispensible to the population,” and are thus considered to be “of primary necessity” and vital for the public welfare.
“The national executive, when the circumstances require it to guarantee the well-being of the population, will have the power to dictate the necessary measures of exceptional character in all or in part of the national territory, directed at avoiding an undue rise in prices, hoarding and boycott of products or services declared to be of primary necessity,” Article 5 of the reformed law establishes.
The law also states, “All the necessary goods for the development of production, manufacturing, importation, storage, transport, distribution and commercialization” of essential goods are also of “public utility” and must be protected by the state.
In addition, the reformed law allows the executive branch to define which goods are essential and to initiate the temporary occupation or expropriation of businesses that are guilty of crimes against the people’s right to access those goods, without the prior approval of the National Assembly.
Hoarding and boycotts of essential products are tactics that were commonly used by right-wing groups to topple left-wing governments in Latin America during the Twentieth Century. In 2002 and 2003, Venezuelan oil industry managers and union bureaucrats shut down the country’s principal industry in an attempt to drive Chavez out of power.
The INDEPABIS law reform comes to weeks after the government announced a new, two-tiered exchange rate that gives a preferential rate to essential items such as food, medicine, and manufacturing inputs in an attempt to stimulate domestic production and to diversify exports.
The adjustment constituted an official devaluation of the bolivar, and President Hugo Chavez ordered the National Guard and the Institute for the Defense of People’s Access to Goods and Services (INDEPABIS) to step up vigilance of businesses and impose sanctions on those who mark up prices on goods bought at the old exchange rate.
INDEPABIS’s most recent reports show the institute has inspected 2,400 businesses and temporarily closed 1,500 for price speculation since the currency adjustment took place.
The stepped up anti-speculation measures have garnered criticism from right-wing opposition groups that allege these measures are an attack on private property, as well as from left-wing opposition groups, which advocate broader expropriations and more participation by worker unions in the process of inspections.
In public statements in defense of the law reform on Thursday, National Assembly Legislator Carlos Escarrá said the right wing opposition “does not understand expropriation.”
“When they say in a foolish manner that the state wishes to take away their private property, they are falling into an aberration, since expropriation is part of the recognition of private property,” said Escarrá. “If private property were not recognized, expropriation would not be applied, rather another legal measure, such as confiscation, for example.”
Articles 114-117 of the Venezuelan Constitution establish people’s access to goods and services as an economic right, and stipulate that crimes that threaten this right, including the crimes sanctioned in the INDEPABIS Law, must be “severely punished.” The articles guarantee private property and “timely payment of fair compensation” for expropriated property, but stipulate that “property shall be subject to such contributions, restrictions, and obligations as may be established by law in the service of the public or general interest.”