Venezuela's President Nicolas Maduro has ordered the “occupation” of a chain of electronic goods stores in a crackdown on what the socialist government views as price-gouging hobbling the country's economy.
Various managers of the five-store, 500-employee Daka chain have been arrested, and the company will now be forced to sell products at “fair prices,” Maduro said late on Friday.
State media showed soldiers in one Daka shop checking the price tags on large flat-screen TVs. And hundreds of bargain-hunters flocked to Daka stores on Saturday morning to take advantage of the new, cheaper prices.
“We're doing this for the good of the nation,” said Maduro, 50, who accuses wealthy businessmen and right-wing political opponents backed by the United States of waging an economic “war” against him.
“I've ordered the immediate occupation of this chain to offer its products to the people at fair prices, everything. Let nothing remain in stock ... We're going to comb the whole nation in the next few days. This robbery of the people has to stop.”
The measure, which comes after weeks of warnings from the government of a pre-Christmas push against private businesses to keep prices down, recalled the sweeping takeovers during the 14-year rule of Maduro's predecessor Hugo Chavez.
Maduro, who took over from Chavez in April after the latter's death from cancer, has stopped short of more outright nationalizations, in this case saying authorities would instead force Daka to sell at state-fixed prices.
“Inflation's killing us. I'm not sure if this was the right way, but something had to be done. I think it's right to make people sell things at fair prices,” said Carlos Rangel, 37, among about 500 people queuing outside a Daka store in Caracas.
Rangel had waited overnight, with various relatives, to be at the front of the queue and was hoping to find a cheap TV and air-conditioning unit.
Soldiers stood on guard outside the store before it opened.
Critics say Venezuela's runaway inflation - the annual rate is now 54 percent, the highest since Chavez came to power in 1999 - is due to economic mismanagement and the failure of socialist policies rather than unscrupulous retailers.
Opponents also blame excessive government controls and persecution of the private sector for shortages of basic goods ranging from flour to toilet paper, and for price distortions and corruption caused by a black-market currency rate nearly 10 times higher the official price.
“This ridiculous show they've mounted with Daka is a not-very-subtle warning to us all,” said a Venezuelan businessman who imports electronic goods and is an opposition supporter.
Under price controls set up a decade ago, the state sells a limited amount of dollars at 6.3 bolivars, but given the short supply, some importers complain they are forced into a black market where the price is nearly ten-fold higher.
“Because they don't allow me to buy dollars at the official rate of 6.3, I have to buy goods with black market dollars at about 60 bolivars, so how can I be expected to sell things at a loss? Can my children eat with that?” added the businessman, who asked not to be named.
Maduro showed astonishment at a fridge on sale in Daka for 196,000 bolivars ($31,111 at the official rate), and said an air-conditioning unit that goes for 7,000 bolivars ($1,111) in state stores was marked up 36,000 bolivars ($5,714) by Daka.
Daka officials could not immediately be reached for comment.
Maduro retains support from large sections of the population, particularly the poor who benefit from massive state welfare programs and who remain loyal to Chavez's dying exhortation to support his chosen successor.
But the growing economic problems in a country which is a member of OPEC and has the world's largest oil reserves, have begun weighing on his popularity, which dropped 10 points in recent months to 41 percent according to a recent survey by pollster Datanalisis.
The economy is the No. 1 issue going into local elections next month that are the 50-year-old Maduro's first test at the polls since narrowly beating opposition leader Henrique Capriles in the April presidential vote to replace Chavez.
Capriles, 40, is trying to cast the Dec. 8 nationwide municipal elections as a referendum on Maduro, whose legitimacy he still refuses to accept, alleging fraud at the poll.
“They don't say how they will fix inflation, shortages, devaluation. Incompetence rules,” he tweeted this week in the latest of a stream of attacks on the government.
Many economists are predicting a devaluation of Venezuela's bolivar currency after the elections, perhaps in early 2014, but senior officials have repeatedly denied that.
“Venezuela's immense resource base means it is not on the verge of collapse or default,” said David Smilde, a sociology professor at the University of Georgia who has studied Venezuela for 20 years, in a recent blog on the economy. “But it is sliding into serious economic dysfunction and that could seriously undercut Chavismo's viability as a democratically supported political project.”