VenEconomy // One of the iron hands behind the silk gauntlet

VenEconomy: One of the iron hands behind the silk gauntlet thrown down by the President before the opposition benches in the National Assembly last Saturday is more than evident. It consists of the President's proposal to use the special powers granted him under the Enabling Law to set up a Superintendency of Costs and Companies.

Although little is known of the powers this new agency will have, what the President revealed with regard to its objectives is more than alarming. According to him, it will issue measures for regulating and imposing ceilings on companies' profits, which, as he sees it, should not exceed 20%. He did not explain whether this 20% is to be calculated on total sales or on a company's net worth.

Another feature of this Superintendency is that it will only accept the participation of members of communal councils and workers involved in federations having close ties with the government, without taking into account the opinion of workers as a whole or their legitimate representatives, much less employers.

The excuse for this new interventionist advance by the government is what it understands to be the unleashing of a "wave of speculation with the prices of essential goods such as food, medicines, and mass consumption products."

It is clear that the Executive is, once again, refusing to admit that it is its interventionist measures over these 12 long years that have caused shortages of basic goods and the constant rise in their prices.

These measures, as the majority of analysts have warned constantly, have put the productive sector in a straightjacket and gradually strangled it. Among them, we have mobilization waybills, price and foreign exchange controls, inefficiency at ports and customs posts, growing contributions by business to the National Treasury, harassment by inspection agencies, punitive anti-speculation laws, and other laws that allegedly aim to guarantee national sovereignty but hang like a Sword of Damocles over the private sector.

The Executive also chooses to ignore that its property confiscation measures have reduced the private industrial park and that the state-owned companies that have replaced it have proved to be proverbially unsuccessful.

Apart from that, it continues to be blind to the fact that the devaluations it has been implementing periodically imply increases in costs for commercial and industrial enterprises, and that, by preventing price increases, it is further strangling companies and opening the door to the professional opportunists, more often than not people close to government circles.

It is obvious that this new agency will also have unprecedented powers to interfere in companies' production chain, operations, and administration, strapping them into an even tighter straightjacket, which, far from putting a stop to spiraling inflation, will simply fuel it.