Chavez may cut prices below cost to buy votes for presidential election

 
A Caracas consumer shops in vain for household staples, while the Venezuelan government proposes more price controls.

 

CARACAS - Polling analysis from a range of firms has consistently shown that neither policy positions nor even a candidate's personal charisma carries the most weight with Venezuelan voters. The most impactful element of electoral campaigns has consistently been monetary and "in-kind" handouts.

 

Foreigners often ask Venezuelans how Hugo Chavez remains popular after driving foreign investment away, ruining the economy, and making Venezuela a laughing stock within the hemisphere. Polling data shows that the answer is nothing more than money - money from State oil coffers delivered into the hands of favored constituencies of Chavez.

 

Every election year, Chavez has increased his "missions," projects for the poor, and has brought in container loads of Chinese household appliances that he sells in Chavista neighborhoods at subsidized prices.

 

When a Chavista candidate was defeated by an opponent's slogan, "Go get your free microwave, then vote for me!", the tactic appeared to be on the verge of backfiring. To compensate, Chavez has had to become more stealthy in his vote-buying methodology.

 

Earlier in the year, the Chavista-led congress passed a price control law that is part of the new methodology. Rather than taxing a shrinking State budget more, the price control law passes the cost to companies and small business owners.

 

Carlos Fernández, the head of the Venezuelan Council of Trade and Services (Consecomercio), told reporters on Tuesday that store owners fear that the bureaucracy known as Sundecop, formed to control prices of a number of staples, would soon cut prices of 19 products below their actual costs. 


"People who are at the end of the marketing supply chain fear that prices will be cut and products will have to be sold below the price they paid," said Fernández.

According to reports by Venezuelan authorities, starting January 15 Sundecop is scheduled to announce the new prices of 19 items, and will publish the list on February 1. The presidential election is scheduled for October 7th.

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