EL UNIVERSAL

Venezuela's Bolivarian government -with the conviction that "the State's visible hand" is directing the economy wisely and successfully- has moved to intervene in production sectors by implementing and expanding economic controls and restrictions since 2003.

As a result, the country faces repeated cycles of scarcity of basic staples, a growing food black market, skyrocketing inflation, and food smuggling to neighbor countries.

Price controls have been in force since February 2003, when the list of regulated products included 220 items. The list comprised basic food items, personal hygiene, and home cleaning products. Subsequently, the government dictated regulations on producer prices for a number of agriculture and cattle-raising items, as well as for food retail chains, and different public utilities.

However, the major goal of such policies, namely preventing price increases and speculation, looks distorted for some months now. Price controls have become a mechanism boosting the consumer price index amidst food shortage resulting from the regulations.

Based on the figures provided by the Central Bank of Venezuela (BCV), CPI of food and non-alcoholic beverages climbed 128 percent in February 2003- December 2007.

In the same period, President Hugo Chávez's government has increased the prices of virtually all of the regulated items. However, such increases have been untimely or inadequate, thus failing to meet the expectations of private farmers, cattle-raisers, and related industrialists.

Translated by Maryflor Suárez
msuarez@eluniversal.com