CARACAS, Venezuela -- Sometimes it seems like the entire country is going out of business. Everywhere you look “ rebaja” or “for sale” signs are slapped on merchandise and deal-hungry shoppers stand in line for hours to snatch-up deeply discounted goods before they run out.
Over the last few weeks, President Nicolás Maduro has ordered retailers to slash prices and cap profits as he fights twin wars: one against the hemisphere’s highest inflation and another for the hearts of Venezuelans who head to the polls Sunday to elect mayors and city council members.
For Maduro, the election is a chance to show that he can command allegiance and work the levers of his party’s impressive get-out-the-vote machine that helped keep his predecessor, the late Hugo Chávez, in power for 14 years.
His rivals are hoping to turn the vote into a referendum on Maduro’s rocky seven months in office, plagued by 54 percent annual inflation, shortages of basic food items, and infrastructure breakdowns — including a blackout that plunged the capital into darkness this week.
But on the eve of the polls, it appears Maduro’s pocketbook policies might be wooing voters.
“Everyone — government, opposition, everyone — here is happy about the discounts,” said Luis Aponte, a 26-year-old exterminator standing in line at a Nike outlet in hopes of getting shoes at half price.
By the time he made it inside, however, the shelves had been almost picked clean and he worried that might be a sign of things to come: shortages of other regulated items, like flour and toilet paper, are prevalent.
“It’s a fake joy,” he said. “In Venezuela, it was hard to find food — now clothes.”
Since winning decree powers two weeks ago to pass economic legislation, Maduro has issued new laws almost daily. He’s ordered the takeover of stores, forced retailers to cut prices by up to 70 percent, and jailed more than 200 people for economic crimes, ranging from gouging to hoarding.
On Friday, he renewed a law that keeps companies from firing employees without the approval of the Ministry of Labor.
On Wednesday, he took on the automobile market. The country’s strict currency controls limit the number of dollars available to importers. Dealerships say they have year-long waiting lists for a limited number of new cars. As a result, used cars often sell for more than new ones. Not for long.
“Venezuela is the only country where a used car costs more than a new car,” Maduro said this week. “That’s over.”
It remains to be seen if Maduro can defy the law of supply and demand, but in the short run that might not be the point, said Luis Vicente León, the president of the Datanálisis polling and research firm.
“Maduro’s decisions might be negative for the economy but they’ve been effective politically,” he said. “Maduro’s approval rating has increased and, without a doubt, I think it will translate into stronger voting.”
Just a few weeks ago, the opposition was hopeful it could make gains in the municipal race, where 335 mayoral seats are up for grabs. Now it’s looking tight.
Jesús Seguías, with the DatinCorp research firm, said many government supporters, or Chavistas, had drifted away from Maduro after he narrowly won April’s election.
But his recent show of force — prying decree powers from congress, and the raft of economic measures — has people reevaluating his presidency.
“Many Chavistas doubted Maduro’s leadership,” Seguías said. “But when they saw him flexing his political muscles and being authoritative, they’ve come back.”
Perhaps the most notorious symbol of the economic problems is the beleaguered bolívar currency, which the government has fixed at 6.3 to the dollar. On the illegal black market, however, one dollar will buy about 60 bolos.
For importers — and about 70 percent of all Venezuelan goods come from abroad — access to those preferential government dollars is key. But many businesses depend on black market rates, and the new price controls threaten to put them out of business.
A day after the automobile decree, Robert Forster, 38, was trying to figure out how to keep his Nissan dealership, which has been in the family for 44 years, afloat. Unable to get hold of new cars, Forster had been making a living selling used cars and spare parts. But now his part suppliers say they’re getting squeezed by price controls and regulations, his used-car business is threatened, and he’s wary of other policies that may be in the works.
“They’ve changed the rules of the game,” Forester said. “And for me it’s game over.”
For many, the question is what happens after election day. Regardless of which side comes out ahead, painful reforms are likely.
A currency devaluation is “inevitable,” said Jason Marczak, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center in Washington. Such a move would sap purchasing power and, most likely, Maduro’s approval ratings, he said. Although the government devalued the currency by 32 percent in February, Maduro insists no new shift is in the works. But soon after Sunday’s race would be a likely time for such a move, Marczak said. Maduro can’t face a recall attempt until 2016 and the next presidential election isn’t until 2019 — giving him time to rebuild his popularity.
At the Importadora El Moro appliance shop in the working class neighborhood of Petare, the manager, Tony Marval, was turning away clients looking for dryers. He was running low on other items, too, amid the government-decreed price cuts. Although his store was complying with the new regulations, angry customers were still threatening to turn him in for gouging.
“People watch what the president says on TV and they expect things to change overnight,” he said. “They’re ignorant about the implications; these things are all out of our hands.”
Marval said his suppliers don’t have access to government dollars and are suggesting they can’t make a living with the new prices. Marval worried his shelves might be bare come January or February.
“What else can you do?” he said, when asked about his options. “Go out and vote, I suppose.”
Miami Herald Andean Bureau Chief Jim Wyss reported from Bogotá and Special Correspondent Andrew Rosati from Caracas.