* Business leaders complain over delays and red tape
* Government intent on shunning near-term devaluation
By Eyanir Chinea and Pablo Garibian
CARACAS, Jan 31 Venezuela's government on
Thursday introduced measures to streamline access to dollars for
a private sector that frequently complains of shortages of hard
currency to buy imports, which business leaders say hurts the
In a decree published in the Official Gazette, the
authorities said it would be easier for businesses to cut red
tape in applying for up to $50,000 a time for the purchase of
raw materials and certain types of machinery.
The decree was the latest of several moves by a government
that looks intent on avoiding or delaying a politically painful
devaluation while President Hugo Chavez recuperates in Cuba
after cancer surgery in December.
The new measure, which takes immediate effect, scraps a
requirement of businesses to certify that goods they seek to
import cannot be produced in Venezuela, or that there is a
shortage of them in the country. The paperwork needed proved
hard to obtain for many importers.
Business leaders say they sometimes have to wait up to six
months for dollars in Venezuela, which enforces a particularly
complex multi-tiered currency control system, and it was not
immediately clear how much impact the new rules would have.
Jorge Botti, head of Fedecamaras, the country's main
business chamber, cautiously welcomed the latest move and said
it could help relieve the pressure for the government to order a
devaluation in the short-term.
"It looks very good to me and points coherently in the
direction that we want to go," Botti told reporters.
A long list of items approved under the new system was
published in the Gazette on Thursday, ranging from seeds and
livestock to tractors and components to produce medicines.
Vice President Nicolas Maduro said last weekend that Chavez
had taken a series of economic decisions to strengthen exports,
stoking speculation that a currency devaluation was imminent.
OIL TAX CHANGE
The main announcement since then was on Monday, when the
government said it was changing the structure of its windfall
taxes on crude production so that state oil company PDVSA could
provide the central bank with an extra $3 billion this year.
Analysts said that would let the central bank sell more
dollars to businesses and individuals. In 2003, Venezuela
imposed capital controls, which over the years have increasingly
restricted access to dollars.
The change to the windfall oil tax system also means PDVSA
will cut its contributions to Fonden, a controversial off-budget
state investment fund, by almost $3 billion this year.
Fonden, which critics say is secretive and funnels huge
amounts of money into projects with little or no oversight from
lawmakers, received more than $15 billion from PDVSA last year.
"What's clear is that the money that was previously going
from PDVSA to social projects will now go to strengthening the
economy. That's good news. Those are signs something is going to
change," said Botti, the president of Fedecamaras.
Fedecamaras complained this month about growing economic
imbalances that it said had been caused by insecurity, bad
policies and uncertainty over the president's prolonged absence.
Periodic shortages of products have become a fact of life
under Chavez. But in Venezuela's distorted, oil-driven economy,
it is the staple goods that go scarce, while luxury and
niche-market items remain easy to find.
Analysts say the government is worried about the political
costs of shortages and rising inflation, but appears unwilling
or unable to make any major economic reforms, including a hefty
devaluation, while Chavez remains hospitalized in Havana.
A devaluation would make exports more competitive by
lowering local production costs and spur domestic industries by
making imports less competitive with locally-produced goods.
It would improve state finances by providing more bolivars
per dollar of oil exports, but would also push up inflation in a
country that already has one of the highest rates in the region.