Skepticism about why Chavez moved now; business leaders openly wonder about the President’s motives

Caracas Daily Journal (Jeremy Morgan): The economic package got generally good marks from the business community, albeit with the usual reservations and skepticism about President Hugo Chavez' motives and whether it was here to stay or only up to the November 23 elections.

The measures were seen as tacit recognition that some of the policies to which he'd clung for so long -- most noticeably, the attempt to try to control even small amounts of hard currency -- simply didn't work in terms of sustainable growth.

Conindustria, which represents small and medium-sized companies, many in manufacturing and reliant on imports, said ending the financial transactions tax (ITF) was "opportune." Conindustria president Eduardo Gomez Sigala said he believed the President's promise that there'd be no new business taxes this year. But Gomez Sigala attributed changes in currency controls to electoral motives.

"It's a test to see whether companies behave well from here to December," he said. "The President continues to insist in his theme that from here on the economy is socialist, of controls and regulations, and that from here on there won't be a free market," he added. Unless price and currency controls were ended, output would not budge. "This is the big contradiction in all this."

The ranchers' federation, Fedenaga, warned that the measures did not augur well for agriculture, helping importers but not producers. Fedenaga president Genaro Mendez wasn't buying Chavez' decision. "I thought that yesterday he was going to announce a true truce with the productive sector, that he was going to respect private property," he declared. "He didn't talk about the problems of judicial and personal security we have." In a reference to government measures related to agriculture, Mendez said that they are "going to strengthen the pockets of those in government" and discrimination would continue against "a sector that wants to produce."

Manuel Barroso, head of the Foreign Exchange Administration Commission (Cadivi), defended the measures. Relaxing procedures on hard currency permits would contribute to "socio-productive development" and responded to higher demand for goods and services. Existing capacity was at the "maximum of its capacity."

This echoed what the private sector and economists have been saying all along. "He should have done this years ago," one financial analyst told this reporter. "What we don't know yet is whether he's really listening, or how committed he is."

There was support for Chavez where he might least have expected it -- the social democratic party, Podemos, once a minor government partner but now in vociferous opposition. Podemos Secretary-General Ismael Garcia welcomed the package but hoped it would not be "transitionary."