Chavez Economy

Description

Economic Policies

1. Currency Control Systems
   • In order to prevent capital flight in Venezuela, President Hugo Chavez has used many forms of currency controls. Chavez has used tactics of suspending all trading of the Venezuelan national currency, the bolivar, as well as imposing a fixed exchange rate to protect foreign reserves and to keep the economy out of the control of foreign investors who would take advantage of the country. Credit Card spending by abroad Venezuelans have been limited to $2,000 a year.
2. Price Controls
   • Since 2003, President Chavez has put strict price controls on basic food items in order to curb inflation. Such items include coffee, beans, powder milk, and sugar.
3. Banking Controls
   • Private Banks must lend 1/3 of their of their loans to agriculture, micro, tourism industry and mortgage clients at below-market rates in order to stimulate these sectors of the economy.
4. Tax Collection
   • Tax collection has increased under President Chavez by require foreign and domestically-owned companies to pay Venezuelan taxes.