International Policy Controlled Economy Impoverished Venezuela Price controls on goods and services, exchange rates, interest rates and salaries were a fundamental cause of Venezuela's dramatic impoverishment over a period of more than 20 years, according to a recently published study. Author Vladimer Chelminski, director of the Caracas Chamber of Commerce, says that despite the recent elimination of many price controls, they continue to limit economic progress. Remaining controls are adversely affecting construction, private education, transportation, and the pharmaceutical industry. Because of these measures, and wage controls, there are fewer jobs available for the less skilled. The lack of investment in transportation causes people spend large amounts of time in bus lines or stuck in traffic in their own cars.
Private schools are open for only half the day.
Drivers have been forced to use inferior gasoline that damages engines, and only poor quality tires are available. Liberalization is incomplete, and the threat remains controls will be reintroduced, since current laws provide the state with the power to intervene in prices at its own discretion. Instead of allowing controls, the law should prevent them, says Chelminski. During more than 50 years, says the author, economic controls promoted a lack of respect for the law, corruption and waste. They also limited the right to work and the right to freedom of expression, inhibited private investment and economic growth.