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.
TEXT SIZE - +
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

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.