Tags: venezuela | blackout | consumers | chavez

Venezuelans Battle Inflation and Blackouts

Wednesday, 13 January 2010 10:41 AM

Venezuelans mobbed stores this week to buy imported electronic goods after the government's sharp devaluation of the currency heightened fears that prices would soon skyrocket.

President Hugo Chávez's decision, announced Friday, comes as Venezuela's sputtering economy grapples with energy and water shortages. Now in his 12th year in power, Chávez has the support of half of the country's 28 million people, polls show, but rising inflation would most hurt the lower classes that are the pillar of his movement.

The first devaluation of the bolivar since the introduction of currency controls in 2003 quickly spurred a shopping frenzy, as Venezuelans rushed out to buy televisions, computers and other goods that would hold their value.

"The typical Venezuelan is saying, 'My savings are going to be worthless,' " said Robert Bottome, editor of the business newsletter Veneconomia in Caracas, the capital. "The store shelves are pretty much empty right now."

The energy shortage has affected industrial hubs and far-flung hamlets. On Tuesday, the government announced rolling blackouts in big cities to prevent what Electricity Minister Angel Rodríguez called "a total shutdown of the country."

With a prolonged drought lowering water levels in the country's mammoth Guri dam, Chávez has already restricted the hours of operation for malls and casinos and instructed Venezuelans to limit showers to three minutes.

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Wednesday, 13 January 2010 10:41 AM
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