MercoPress. South Atlantic News Agency

Chavez warns Army will take control of businesses that increase prices

The troops to the shopping malls to fight speculation announced Chavez

Venezuela's President, Hugo Chavez, has said troops will seize control of any business that increases prices in response to the devaluation of its currency.

Speaking on his weekly Sunday television program, “Alo Presidente,” Chavez railed against merchants who re-price their items in reaction to Friday's announcement that the Venezuelan Bolivar currency, which had been fixed at 2.15 to the US dollar since 2005, was devalued to 4.3 to the dollar.

For food and medicine, Chavez announced a second fixed exchange rate for these “necessity” goods at 2.6 Bolivar to the dollar.

He said there was no reason for prices to go up, and speculators' businesses would be handed over to the workers. Venezuelans have rushed to the shops to buy imported goods before the Bolivar's devaluation comes into effect.

“I want the national guard in the streets, with the people, to fight speculation,” Chavez said, calling re-pricing a form of robbery.

Chavez says devaluing the Bolivar by at least 17% will boost competitiveness and reduce dependence on imports. But critics say it will fuel inflation, which has already risen to 25%.

Oscar Meza, director of the Venezuelan economic think tank, Cendas, predicted the move would push annual inflation above 33%.

During his weekly Sunday program Chavez showed a photograph in a newspaper of consumers in long lines over the weekend to buy goods, fearing that the sharp devaluation could result in higher prices.

The president blamed such lines on “tele-terror,” saying that opposition media outlets were fueling a panic.

“At this moment, there is absolutely no reason for anyone to raise the prices of anything,” Chavez said.

He encouraged people to publicly denounce businesses where prices increase and threatened to expropriate businesses that do.

He urged his supporters to “publicly denounce the speculator” and warned business owners that he had asked the military to formulate an “offensive plan” that would see them “take over any business, of any size, that plays the bourgeois speculation game”.

Luis Ignacio Planas of the opposition Copei party said the government was “acting like a pickpocket, sticking its hands in the pockets of Venezuelans, taking their money to continue financing and paying for an irresponsible economic policy”.