November 20, 2013 -- Updated 1955 GMT (0355 HKT)
The
president of the Venezuelan National Assembly, Diosdado Cabello,
applauds Wednesday as Venezuelan President Nicolas Maduro shows the
document giving him special decree powers.
Caracas, Venezuela (CNN) -- Venezuelan lawmakers have given President Nicolas Maduro special decree powers to fight an "economic war," but the shape that fight will take is uncertain.
Maduro has promised to
use his new powers -- approved by the National Assembly on Tuesday -- to
make sweeping changes to the way the economy is run in the oil-rich,
but poorly managed South American nation.
Among his priorities,
Maduro says, will be to cap profits for businesses at between 15% and
30% and to enforce price controls on an expanding number of goods.
Some see this as a movement to a fully socialist model; other see political opportunism.
In recent months, Maduro
has blamed capitalism for speculation that is driving high rates of
inflation and creating widespread shortages of staples.
The so-called "enabling
law" that grants him decree powers could make it easier for him to set
price controls, as he did recently to an electronics and appliance chain
he accused of price gouging.
The result was a run on
the Daka chain of stores, as people mobbed to buy deeply discounted
electronics in chaotic scenes that included some looting.
"Consumerism is not the
path," the President said Tuesday. "We are re-establishing prices so
that the people's economic rights are respected, not to consume without
control."
The underlying goal of
these expanded powers are for Maduro to push a socialist agenda to the
point of no return, said Jose Vicente Haro, a Venezuelan constitutional
lawyer.
"What we've seen is just
a little of what's coming," he told CNN en Español. "What Nicolas
Maduro's primary objective is now is to regulate the profits of all
companies that provide services or produce goods."
Those who agree with Haro fear that foreign investment in Venezuela will dry up as the government cuts their profits.
But behind the blustery
rhetoric, there may be hints at a more pragmatic approach, said David
Smilde, a Venezuela expert and senior fellow at the Washington Office on
Latin America.
Faced with a difficult
transition after the death of President Hugo Chavez, Maduro has adopted
the economic war for political purposes, Smilde said.
The bloc that supported
Chavez has been difficult for Maduro to keep together. By putting a name
and a face to the "enemy," as he did by singling out the Daka
electronics chain, the President is trying to unite voters behind his
party ahead of local elections next month, Smilde said.
"Their idea is to have this carry them through the elections," he said. "I think it's completely political."
Behind the scenes, there are signs that the Venezuelan government is taking a less controversial approach to its economy.
To fight a shortage of
dollars, Venezuela's state-run oil company announced it will sell $4.5
billion in bonds, for instance. There are also reports that it will try
to make up even more ground by selling gold from its reserves.
Maduro hasn't
highlighted these moves the same way he has trumpeted his new decree
powers, but they are telling of a more pragmatic approach, Smilde said.
The government's short-term goal, Venezuelan analyst John Magdaleno agreed, could be to gain an advantage at the polls.
Once the election is over, the government will have to take unpopular steps, such as devaluing its currency, to curb inflation.
"I think it's inevitable
that to face the current economic situation the government will have to
take some measures that will have a negative impact on the lower
classes," Magdaleno said.
On the streets, some Venezuelans see the economic war that their leader is waging as a necessity, or as a dangerous blank check.
"There's no merchandise, and what's available is expensive," said Leonardo Guerrero, who sells fish.
He has seen variety falling and costs rising, and would like to see a "fair price," for more products, he said.
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