Venezuela’s Maduro Secures Powers to Rule Without Congress

Venezuela’s President Nicolas Maduro received authority to pass economic laws without congressional approval, a move the opposition says will increase the harassment of businesses and attacks on political rivals ahead of local elections.

The national assembly approved yesterday the so-called enabling law by a three-fifths majority, granting Maduro the power for one year to enact laws, such as limits on profits, without the oversight of congress.

“We reduced prices to keep them down and with the enabling law, I’ll keep them where they need to be,” Maduro said yesterday on state television in front of a crowd of supporters outside the presidential palace in Caracas. “I also requested this enabling law for a hair-raising offensive against corruption starting in January.”

Maduro acquired for the first time the same power his late predecessor Hugo Chavez relied on for a third of his 14 years in office to nationalize companies, create taxes and increase labor rights. Maduro said he will use decrees to protect the people from the “parasitic bourgeoisie,” which he accuses of hoarding goods and overcharging customers. He will pass populist measures to regain support that has been eroded by the fastest inflation in the world ahead of local elections scheduled for Dec. 8, David Smilde, a sociology professor at the University of Georgia, said.

The government “is seeking once again scapegoats to blame for their own mistakes,” the opposition coalition, led by former presidential candidate Henrique Capriles, said in an e-mailed statement. “The government is trying to deviate attention from the serious economic crisis that is hurting Venezuela.”

The proportion of Venezuelans that perceive the economic situation as negative rose about 20 percentage points to 72 percent since April, Barclays PLC said in a Nov. 12 report, citing a Datanalisis poll taken from Sept. 23 to Oct. 2. The margin of error wasn’t provided.

Shortages

Inflation (VNVPIYOY) in Caracas soared to 54 percent in the 12 months through October, the fastest pace in 16 years. Lack of dollars has led to shortages of everything from flour to car parts in a country that imports 70 percent of the goods it consumes.

Maduro said Nov. 18 he will initially use the law to control profit margins across the economy. He said price regulators backed by military inspected more than 1,000 businesses, forcing 99 percent to lower prices.

Profit margins will vary by economic sector, Maduro said yesterday, adding that between 15 and 30 percent was “enough.” Companies can operate with reduced prices he said were “sustainable and viable.”

“We’ll achieve an economic miracle this century,” Maduro said.

Army Occupied

“With the enabling law, no one will stop me from protecting the people from the speculators, the parasites, the thieves, the corrupt,” Maduro said Nov. 14.

Venezuela’s army occupied this month an electronics chain to enforce price reductions ordered by Maduro. He said Daka stores were overcharging customers by as much as 1,200 percent.

The opposition coalition, known as MUD, voted against the enabling law it said will be used to criminalize opponents.

“Maduro can now put out laws behind closed doors, without consulting the opposition or his own coalition,” said Smilde. “From a democratic perspective it’s undesirable, because it reduces the public’s ability to oversee and counteract what the government wants to do.”

To contact the reporters on this story: Anatoly Kurmanaev in Caracas at akurmanaev1@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.