CARACAS, VENEZUELA — Police swooped down last week on a grimy central market district, forced open a warehouse and seized 7 tons of a white substance. It wasn't cocaine. The contraband was sugar, and the seizure of at least 184 tons nationwide showed how President Hugo Chavez's efforts to remake the economy are fraying at the edges.
The bust near the Quinta Crespo market came as double-digit inflation and scarcity have hit Venezuela's markets. The seizures were efforts to strike at what one Chavez supporter, Carabobo Gov. Luis Felipe Acosta, said was hoarding by "terrorist capitalists who want to destroy the country."
| In the last week, Venezuela's central bank released figures showing that inflation rose in January to an annual rate of more than 25%, twice the national target. |
But economists and industry officials describe the raids as the latest in a sequence of hamhanded, politically motivated attempts to rein in market forces beyond Chavez's control. Inflation and the development of a huge underground market in goods including sugar were simply symptoms of mismanagement, they say.
Venezuela is rolling in oil wealth with about $46 billion in energy sales last year, and there is little risk of a financial crisis in the near term. Chavez in recent years has tried to transfer much of the wealth to the poor via welfare programs including cheap or free housing, the donation of cash and government assets to worker cooperatives and free education. |