Venezuelan business leader slams Maduro’s congress plan
MARACAIBO, Venezuela,
(Reuters) - Venezuela’s severe economic crisis will worsen if President Nicolas Maduro presses ahead with a controversial new congress that would further undermine investor confidence in the OPEC nation, the head of the country’s biggest business guild said.
Despite months of protests by the majority-backed opposition and widespread international condemnation, the ruling Socialist Party is holding a vote on July 30 to set up a legislative superbody known as a Constituent Assembly.
The assembly would have powers to rewrite the constitution and abolish the existing opposition-controlled legislature in what foes fear would enshrine a leftist dictatorship.
“What country in the world has a successful socialist model? None!” Carlos Larrazabal, 60, president of Fedecamaras told Reuters on Tuesday during its annual meeting in the sweltering western city of Maracaibo.
“In a constituent process, with the characteristics that are being proposed, there is no legal certainty and that does not attract investment but rather scares it away,” added the U.Seducated economist.
Fedecamaras has long been at odds with the government after a former head briefly became interim president in a 2002 coup against late socialist leader Hugo Chavez.
Though officials have given few details on what the Constituent Assembly - which the opposition is boycotting - might do, investors fear its legal and economic ramifications. Comments by a Socialist Party candidate that the assembly could rewrite parts of the constitution that allow joint ventures with foreign companies have spooked some in the country’s oil sector - though state energy company PDVSA later reassured partners that would not happen.
The political showdown comes amid a brutal economic crisis: inflation is in triple digits, the currency has fallen 99 percent against the dollar since Maduro was elected in 2013, and millions are struggling with food shortages.
A Reuters poll of economists on Wednesday forecast Venezuela would shrink 6 percent this year and another 3.0 percent in 2018.
“The forecasts are catastrophic. We have no positive expectations,” Maria Uzcategui, president of retailers’ guild Consecomercio, told Reuters at the Maracaibo conference.
Consecomercio estimates almost a million jobs in the private sector were lost in the last 18 months, and 1,150 businesses looted amid this year’s violent anti-Maduro protests.
Venezuela’s private sector wants to see an end to currency controls, enacted by Chavez in 2003 to curb capital flight, and price controls, which crimp production.