News / Economy

Venezuela's Maduro to Raise Pressure on Business

Venezuela's President Nicolas Maduro talks to supporters during a meeting at Plaza Bolivar in Caracas, Dec. 8, 2013.
Venezuela's President Nicolas Maduro talks to supporters during a meeting at Plaza Bolivar in Caracas, Dec. 8, 2013.
Reuters
Venezuelan President Nicolas Maduro pledged to deepen his "economic offensive" to force businesses to cut prices after his ruling Socialist Party won the most votes in weekend municipal elections.
    
With three-quarters of the 337 mayoral races counted by Monday morning, the Socialists and their allies had 49 percent of votes, compared to 43 percent for the opposition coalition and its partners.
    
That result derailed efforts by Maduro's critics to turn the vote into a show of disapproval for his government and the legacy of late socialist leader Hugo Chavez.
    
The president's candidates benefited from a populist crackdown in November to force merchants to slash prices of goods such as TVs, car parts and home hardware.
    
"This week we are going to deepen the economic offensive to help the working class and protect the middle class," a triumphant Maduro told supporters in a rally after the results were announced late on Sunday night.
    
"This week it's going to be the housing and food sectors. We're going in with guns blazing, keep an eye out."
    
Maduro's personal approval rating jumped sharply after he instituted the economic measures, which won over consumers weary of the country's 54 percent annual inflation. Maduro blames the rising prices on an "economic war" he says is financed by political adversaries.
    
The initial steps focused on home appliances and later extended to controls on rent of commercial buildings such as shopping malls, to try to lower prices.
    
Sunday's election was the biggest political test for Maduro since he narrowly won a presidential election in April following Chavez's death from cancer. He called the results a tribute to the late leader whose 14-year rule polarized the OPEC nation.
    
"Here it is, commander, the gift of your people ... the gift of loyalty and love," he told a crowd, whose mostly bored expressions broke into joyful chanting at the mention of Chavez's name.
    
Devaluation coming?
  
The results may help Maduro to enact unpopular economic measures such as a currency devaluation that Wall Street investors call necessary to close the government's fiscal gap and reduce capital flight.
    
But extending the price cuts may worsen product shortages and reduce the productivity of a private sector already battered by years of nationalizations.
    
Nor does the majority in the local polls help him address the structural imbalances of a state-driven economy struggling with slowing growth, the highest inflation in the Americas and embarrassing shortages of goods such as toilet paper.
    
Critics say he needs to scrap exchange controls and lift restrictions on private businesses.
    
Economists were left guessing Maduro's next move.
    
"This might strengthen the radicals who pushed for the tightening of price controls that appears to have provided Maduro with the needed electoral boost," Bank of America analyst Franciso Rodriguez said.
    
"On the other hand, it gives the government sufficient room to devalue now that the elections are behind."
    
The Socialist Party had been widely expected to win a majority of the total number of seats because the distribution of voters makes it dominant in rural, sparsely populated constituencies.
    
But opposition leader Henrique Capriles had previously said the opposition would win a majority of votes. The results showed the continuing division over Chavez's legacy, he said.
    
"Nobody should feel defeated, we have a country that is divided and we want Venezuela to be united," a disappointed-looking Capriles said in a late-night news conference.
    
"This country does not have a single owner."
    
Opposition's urban gains

    
A man casts his ballot in a box during a municipal elections in Caracas, Venezuela, Dec. 8, 2013.A man casts his ballot in a box during a municipal elections in Caracas, Venezuela, Dec. 8, 2013.
x
A man casts his ballot in a box during a municipal elections in Caracas, Venezuela, Dec. 8, 2013.
A man casts his ballot in a box during a municipal elections in Caracas, Venezuela, Dec. 8, 2013.
The Socialist Party's majority overshadowed opposition gains in crucial areas such as the industrial city of Valencia, where the party's mayor was recently arrested on corruption charges.
    
The opposition also won in Barinas, capital of the late Chavez's home state that has for years been dominated by his family - even though Maduro had decreed Dec. 8 a day of "Loyalty and Love" to the former president.
    
The opposition is also expected to increase the total number of mayors' seats it controls.
    
Even a better overall vote showing for the opposition, though, would have been largely symbolic.
    
The next polls are for a new parliament in late 2015, and opponents will have to wait until 2016 if they want to try to remove Maduro via a recall referendum halfway through his term.
    
"We're not giving up, we're going to keep on fighting," said one opposition supporter and bank manager Oskeiling Lopez.
    
Despite an unexpectedly strong showing in the April presidential vote, Capriles has struggled since then to influence national politics. Some anti-government activists are pressing for more action, such as street protests.
    
"This is further evidence that President Nicolas Maduro and Chavismo have more staying power than some observers believe," the Eurasia group political consultancy said of Sunday's vote.
    
"These mixed results are unlikely to fundamentally change political dynamics, and policy will remain highly interventionist as challenging macroeconomic dynamics keep the government on the defensive."

You May Like

US Investors Eye IPO for China's Alibaba

E-commerce giant handled 80 percent of China's online business last year, logging more Internet transactions than US-based Amazon.com and eBay combined More

Video Uneasy Calm Settles Over Israel, Gaza Strip

As cease-fire begins, Palestinians celebrate in streets; Israelis remain wary More

Video Chinese Doctors Use 3-D Spinal Implant

In treatment of a 12-year-old boy Chinese doctors used a 3-D printer and special software to create an exact replica of vertebra More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Chinese Doctors Use 3-D Spinal Implanti
X
August 27, 2014 4:53 PM
A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. VOA News reports from Kolkata.
Video

Video Northern California Quake: No Way to Know When Next One Will Hit

A magnitude 6.0 earthquake rocked northern California’s Napa Valley on Sunday. Roads twisted and water mains burst. It was the wine country’s most severe quake in 15 years, and while hospitals treated many people, no one was killed. Arash Arabasadi has more from Washington on what the future may hold for those residents living on a fault line.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.