It's the money, Hugo:
Scarce supplies of building materials, cars, food and other goods are imposing costly delays and other efforts to cope, pushing Venezuelan inflation to an annual rate of 17% last month, the central bank said this week.
Some of the shortages are the result of the very price controls that President Hugo Chavez has imposed to combat inflation, say local businessmen.
“All price controls, after a few years, become perverse for production,” said Gustavo Moreno, president of the Venezuelan Agriculture Association. “If there isn’t a periodic price increase to take inflation into account, controls create more problems.”
....“Chavez favours price and capital controls to keep a lid on prices rather than spending less or raising interest rates,” said Alberto Ramos, a senior Latin American economist with Goldman Sachs Group. “We expect Chavez to persist with and possibly deepen these controls.”
At 17%, Venezuela’s inflation rate was the fastest in Latin America last month. ....
Chavez boosted state spending 51% during the first nine months of last year as oil sales jumped to a record for Venezuela, the world’s fifth-largest crude oil exporter. The government price caps are helping to contain the inflation “demons”, Chavez said in a November 1 speech in one of the slums in eastern Caracas.
....To escape the controls and supplement their income, some farmers sell their crops at unregulated street markets for a higher price, Moreno said. Others, such as dairy producers, are exacerbating a milk shortage by making more goods whose prices are not regulated, such as cheeses.
Meanwhile, companies are reluctant to invest to increase production. Manufacturers, concerned that Chavez will deepen state involvement in the economy, have trimmed spending on new plant and equipment to the point that nongovernment investment equals no more than 4% of gross domestic product, the lowest among Latin America’s 10 biggest economies.