Wrong policy in Venezuela // Fair Prices Organic Law
However, probably, these implemented measures that should revolve around the benefit of all sectors, far from this have provoked negative opinions, which allow to ensure the total failure of these policies, given that, in a certain way, they coerce the normal operation of commercial activities, and distort theories, which over the years have been used to direct the productive and commercial sector; Such is the case of the law of supply and demand, which states that the market determines the price of the product, and that the higher the demand, the higher the price.
It is of interest to mention that since 2014, a Law was enacted that regulates the price of goods and services in Venezuela, known as the Organic Law of Fair Prices, which was a modification of the previous law called the law of costs and prices just. This modification establishes a series of rules to guarantee the user goods and services at fair prices, with the purpose of protecting the salary, this because at present, various situations originated by the established economic policies, have caused that the businessmen must increase the price, in order to safeguard its capital and keep the business going, which in turn causes the inflation levels to exceed the expectations raised. Bringing as a consequence a total chaos, in the national economy, which affects all the companies that operate within the territory.
In a healthy economy, supply and demand are the forces that make the market work. Also, they determine the amount that is produced of each good and the price at which it must be sold. However, entrepreneurs today try to dominate the market, setting prices and business conditions. Facts that do not correspond to international references, nor do they obey a justifiable cost structure.
However, in this Latin American country, where the generalization of speculative practices in a changing and declining economic situation, produces excessive inflationary levels, which end up eroding, both the purchasing power of the population, and the potential of small and medium enterprises. The state has seen the need to create legal instruments with "protectionist" measures to the consumer; with the purpose of controlling the productive sector, which has necessarily had to reevaluate its production costs, as well as the profit margins. In this sense, the Organic Law of Fair Prices (LOPJ) is published, official gazette number 40,340 (2014) whose objective is:
Ensure the harmonious, fair, equitable, productive and sovereign development of the national economy, through the determination of fair prices of goods and services, through the analysis of cost structures, the establishment of the maximum percentage of profit and effective control of economic and commercial activity, in order to protect the income of all citizens (Article 1).reference
Likewise, the National Superintendence for the Defense of Socio-Economic Rights (SUNDDE) is created as the regulatory body of this regulation, which will determine, control and fix the prices of goods and services. In the same way, it will establish the categorization of goods, services and subjects; being able to dictate the parameters to fix the fair prices. Similarly, a series of sanctions is established for the breach of the LOPJ, which ranges from fines, to revocation of authorized licenses in national territory, by merchants.
Therefore, it can be said that the LOPJ emerges as a measure of equilibrium, in unbalanced sectors, by the indiscriminate way that the prices of goods and services have been established at a national level. All this, together with a series of exchange control policies, defined by the National Center for Foreign Trade; (Cencoex) (2014) as; "An exchange policy instrument that consists of officially regulating the purchase and sale of foreign currency in a country. In this way, the Government intervenes directly in the foreign currency market, controlling the inflow or outflow of capital. "
However, far from benefiting the productive sector, could be affecting the quality and profitability of the private company, because what was previously imported very easily, now faces a strict control that generates delays in the production process of the same , therefore, it leads to scarcity and the low probability that the particular activity is profitable.
It could be difficult then, to combine price control with profitability, when commercial or productive activities are carried out with the purpose of generating wealth with the best use of resources, and also allowing the companies to remain in time, likewise, the existence of a strict exchange control that results in the delay in the replacement of inventories or existence, for the normal functioning of the distribution and services companies and, therefore, little turnover of assets through sales.
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