Thousands of Venezuelans lined up outside of Daka stores — their equivalent of Best Buy — after the socialist government forced the company to charge customers “fair” prices:
President Nicolás Maduro ordered a military “occupation” of the company’s five stores as he continues the government’s crackdown on an “economic war” it says is being waged against the country, with the help of Washington.
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Maduro faces municipal elections on Dec. 8. His popularity has dropped significantly in recent months, with shortages of basic items such as chicken, milk and toilet paper as well as soaring inflation, at 54.3% over the past 12 months.
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“This is for the good of the nation,” Maduro said. “Leave nothing on the shelves, nothing in the warehouses … Let nothing remain in stock!”
The president was accompanied on television by images of officials checking prices of 32-inch plasma televisions.
Daka’s store managers, according to Maduro, have been arrested and are being held by the country’s security services. Neither Daka nor the government responded to requests for comment.
Maduro has long blamed the opposition for waging an economic war on the country though critics are adamant that government price controls, enacted by Chávez a decade ago, are the real cause for the dire state of the economy.
With such a shortage of hard currency for importers and regular citizens, dollars sell on the black market for nine times their official, government-set value. Prices, at shops such as Daka, are set according to this black market, hence the government’s crackdown.
Chávez often theatrically expropriated or seized assets from more than 1,000 companies during his 14-year tenure. This, among other difficulties for foreign firms, led to a severe lack of foreign investment in the country which, according to OPEC, has the world’s largest oil reserves.
I couldn’t make that up.
The Wikipedia page for the currency has some of the same tone in parts where it explains the events leading up to this:
http://en.wikipedia.org/wiki/Venezuelan_bol%C3%ADvar
“Nevertheless, the black market value of the bolívar fuerte has been significantly lower than the fixed exchange rate of 2.15 (in February 2008 it was as high as 7.0 to 1).[2] It is illegal to publish this “parallel exchange rate” in Venezuela.[2]
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It should be noted that the official exchange rate is restricted to individuals by CADIVI, which imposes an annual limit on the amount available for travel (up to $3000 annually depending on the location and duration of travel) and $400 for electronic purchases.
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Since Hugo Chavez imposed strict currency controls in 2003, there have been a series of five currency devaluations, disrupting the economy.[14] There was another devaluation on 13 February 2013 (to 6.30 bolivars per dollar), in an attempt to counter budget deficits.[15]“
I found that tone odd. Retailers are basing the prices of their imported goods on black-market exchange rates!? No wonder the government is stepping in! Sigh.