Venezuelans to see price controls

www.miami.com Posted on Mon, Jan. 27, 2003

CARACAS - (AP) -- President Hugo Chávez said Sunday he would put in place price and currency controls as Venezuela's economy heads for a tailspin stemming from an opposition strike, which entered its ninth week today.

''So that these [currency] controls do not hurt the poor, we will institute price controls,'' Chávez said in Porto Alegre, Brazil, at the World Social Forum. He did not give details of the controls.

Hundreds of thousands of his foes occupied a central Caracas highway for the entire weekend to protest a Supreme Court decision suspending a Feb. 2 referendum on Chávez's rule.

After extending the protest well beyond the 24 hours planned, protesters finally rolled up their national flags -- and, in many cases, their tents -- and let traffic flow again.

Opposition leaders said that, instead of the referendum, they would collect signatures Feb. 2 petitioning for Chávez to resign, for his term to be cut and for pro-Chávez lawmakers to be replaced.

Chávez suspended foreign currency dealings for five business days last Wednesday to halt the rush of nervous Venezuelans trading in their bolivars for dollars.

The currency has lost 25 percent of its value this year alone.

On Sunday, he said he will soon propose a tax on all financial transactions in Venezuela, saying it would be ''a kind of Tobin tax.'' Tobin taxes, named after Yale University economist and Nobel-laureate James Tobin, are designed to tame currency market volatility.

Chávez did not provide more details, but said Venezuela's dollar-based reserves dropped $3 billion in December and January as a national strike dried up oil exports. Dollars are needed to buy food -- about half of which is imported -- medicines and other essentials, some of which already are in short supply.

Chávez also said Sunday that oil production has risen to 1.32 million barrels a day. But dissident oil executives put the figure at about 957,000 barrels.