Tough Times Ahead In Post-Chavez Venezuela


CARACAS, Venezuela (AP) â¿¿ Doing business in post-Hugo Chavez Venezuela is not for the faint of heart.

Thousands of companies suffer under currency controls that all but deny them the U.S. dollars they need to import vital items into this oil-rich country, from food to cars to spare parts â¿¿ even gasoline. Venezuelan firms must sell their wares at state-controlled prices that don't reflect the 22 percent inflation rate, the highest in Latin America. Even Venezuela's socialist government admits the controls don't work â¿¿ but its attention is focused on the April 14 election to replace the late President Hugo Chavez.

It's a largely improvised economic policy that, despite oil earnings, has turned people's lives upside down and produced shortages of flour, coffee, butter and medicines. It's also a mess that will immediately challenge whoever becomes the president of this 28 million-person country.

Jeni Suarez, a 51-year-old Caracas homemaker, experienced the crisis first hand after waiting three months for a colonoscopy at a public hospital. When she got there, doctors told her they needed new parts from abroad to perform the procedure, and the deliveries weren't coming any time soon because the hospital didn't get dollars from Venezuela's government to buy them.

"I have an intense pain, and I don't know what to do," Suarez said after the appointment at Jose Maria Vargas Hospital.

Such economic headaches have, in fact, defined much of the late president's legacy here.

Chavez imposed draconian currency controls a decade ago to punish business leaders who had mounted a crippling opposition strike. He was also trying to stem the flight of dollars abroad as political instability spooked investors.

"The policy of currency controls is very negative for the country and hasn't met any of its objectives," said Alejandro Grisanti, an analyst at investment bank Barclays Capital. "It hasn't stopped capital flight. It hasn't stopped inflation, (and) it has been very costly for the treasury."

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