Venezuela’s Maduro wins vote to rule by decree

Throngs of red-clad supporters marched to Venezuela’s presidential palace Tuesday night to deliver a coveted gift to its occupant, Nicolás Maduro: the power to rule by decree.

After a three-month battle, the National Assembly narrowly approved a measure that will allow Maduro to issue laws governing corruption and the economy for 12 months without going through congress.

Maduro says he needs the emergency power, or habilitante, to root out graft and fight an “economic war” that has led to the hemisphere’s highest inflation rate and shortages of everything from flour to toilet paper.

The opposition fears Maduro will use his new power as a partisan bludgeon in the run-up to next month’s municipal race.

The controversial and contentious vote was a political victory of sorts for Maduro who has struggled to find his footing since narrowly winning election in April to replace his late boss President Hugo Chávez.

National Assembly President Diosdado Cabello — a Maduro loyalist — said Tuesday’s vote was a “tribute” to Chávez and his socialist legacy.

“What’s at stake here are two models,” he told supporters who gathered outside congress. “The model of hate, which is capitalism, and the model of love, which is socialism; the model of Chávez and the people, which is socialism, and the model of bourgeoisie traitors, which is capitalism.”

Late Tuesday, Maduro said he will use the power to double-down on a controversial strategy: forcing retailers to lower prices and establish industry-wide profit margins. Maduro said recent inspections had found companies that had inflated prices by up to “4000 percent.”

“They’ve created a bubble in the prices of all goods and services and taken the economy to chaos,” he said of his opponents, who he also accused of trying to generate power outages and sabotaging the economy. “We are going to launch a war to demolish corruption.”

But some say its the government that’s generating chaos. When the administration intervened in an electronics store last week and forced price cuts, it sparked a rush of wild shopping that devolved into looting. Maduro asked the country not to give into “consumerism” and said the new laws would not lead to additional shortages or force companies out of business.

There’s no doubt the economy needs help. Annual inflation is running in excess of 54 percent and a draconian system of currency and price controls has sparked shortages of basic goods in a country that has the world’s largest oil reserves.

In theory, Maduro’s decree powers will be limited. But Chávez was granted decree powers on four occasions and often used the authority to legislate beyond the issue at hand. In 2010, when given the power to fight flooding, for instance, he used it to pass laws on banking, housing, police and other issues.

In a statement, the coalition of opposition parties known as the MUD, said Maduro’s true aim is to find scapegoats for the country’s economic woes and cut off sources of opposition financing.

“The real intention of this decree measure,” the MUD said, “is to make the people believe that the government of Nicolás Maduro is not the main culprit of the economic and social problems that Venezuelans are facing.”

In that sense, the decree power may have as much to do with the Dec. 8 municipal vote, which is seen as a referendum on Maduro’s seven months in office, as it has to do with controlling soaring prices.

“Maduro is trying to blame the country’s mounting economic problems, especially rising inflation, on the actions of the private sector and foreigners,” wrote Daniel Kerner with the Eurasia Group analytical firm. “This could probably be well received by parts of the population, though this won’t be a game changer politically given that [measures] are unlikely to improve overall economic dynamics. Still, it could help the government at the margin by at least showing that Maduro is trying to deal with the problems.”

After announcing in August that he would seek the emergency powers, Maduro seemed to struggle to win the 99 votes in congress — or three-fifths majority — he needed. Last week, however, he got a break when an opposition deputy was stripped of her parliamentary immunity and her substitute threw his support behind Maduro.

On Tuesday, opposition Dep. María Corina Machado accused Maduro of using corrupt courts to game the system.

“This decree power is as illegitimate as you are,” she said. “You’ve even resorted to instigating looting from the Miraflores [presidential palace].”

Whether Maduro can reduce inflation by decree remains to be seen. But there are those who fear his new powers could exacerbate the country’s economic woes.

“There is no question that Venezuela has seen many instances of price speculation and corruption that have affected prices of goods or exploited the distorted currency markets for profit,” wrote the Texas-based Stratfor intelligence firm. “However, the government’s ability to determine which retailers are exploiting the system and which are scraping by is suspect, and there is a real danger that this crackdown will put many out of business, potentially worsening the country’s scarcity problems.”