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Venezuelan govn't may regulate private firms' profits

The Venezuelan Federation of Trade and Industry Chambers (Fedecámaras) rejected the establishment of the Superintendence of Costs and Prices

ECONOMY
A newly created Superintendence of Costs and Prices seeks to control the profits of private companies, said Noel Álvarez, the president of the Venezuelan Federation of Trade and Industry Chambers (Fedecámaras), Venezuela's main business association.

"It appears that the only goal of this agency is to control corporate profits and prices of goods and services," the business leader added.

According to Álvarez, no additional economic controls will boost supply and curb inflation. "As long as actions are taken to discourage supply, as is the case now, there will be less variety of products. In turn, waning supply will result in increased prices of goods and services," he said.

Last Saturday, Venezuela's President Hugo Chávez raised the possibility of creating a Superintendence of Costs and Prices within the framework of the enabling law, in order to fight speculation.

The president of Fedecámaras recalled, however, that controls similar to those proposed by Chávez have failed in the past, just like government's price controls are failing now. "With all previous experiences, we dare to say that this measure will fail, just like the Commission on Costs, Prices and Salaries (Conacopresa) did in the past."

The business leader stressed that the government must prepare a plan to encourage domestic production.

"Production in Venezuela should be increased dramatically in order to bring prices of goods and services down. Producers should not be persecuted. On the contrary, entrepreneurs should be supported, so as to galvanize the domestic production apparatus and create goods and services."