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 Rafael Ramirez, Venezuela's longtime oil minister and now vice
president for the economy, signed the agreement with the South Korean company's
regional president, Hyun Chil Hong, a day after the National Assembly gave
President Nicolas Maduro powers to rule by decree for up to 12 months.
Economists consulted by The Associated Press said they expected Maduro to
tighten government controls on the economy to the detriment of private
enterprise.
Samsung will initially invest $50 million in a factory for the joint production
and Venezuela will take a controlling interest, Ramirez said. Its location,
output and start date won't be announced for at least a month.
In the meantime, the government will directly import 400,000 Samsung major home
appliances and other electronics worth about $100 million to arrive in "the
coming days," Ramirez told reporters at the signing ceremony.
 He said they would come from Samsung plants in Brazil, Mexico and Argentina.
Rather than a sign of investor trust, the Samsung-government alliance
underscores what is fast becoming the prevailing business model in Venezuela's
inflation-plagued economy, with the government supplanting private business and
directly supplying goods to stores at fixed, discounted prices.
"All countries have their problems," Hong said when asked why Samsung would
invest in a country with a distressed economy. "I think we can overcome this
type of situation with good collaboration."
Economists say the government directly imports more than 40 percent of the
consumer goods sold in Venezuela, compared to 15 percent in the late 1990s when
the late Hugo Chavez was first elected president and steered the economy of the
major oil producing-nation toward greater state control. He died in March.
Venezuela signed a similar agreement earlier this month with Mexican appliance
maker Mabe to produce and sell stoves, refrigerators and other durable goods at
"fair prices" well below what Venezuelans have grown accustomed to amid soaring
inflation.
In exchange for billions of dollars in loans, the Venezuelan government is also
a major buyer of Chinese-made goods that stock the shelves of a government-run
retail chain.
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Maduro on Nov. 8 ordered the military to take control of several
retail chains accused of gouging consumers by charging prices that
he says don't reflect the currency exchange rate the government uses
to mete out increasingly scarce dollars.
More than a week later, long lines and armed soldiers are still
outside Caracas stores that the government intervened in, as well as
other retailers that were spooked into marking down their inventory
by up to 70 percent.
While the nationwide fire sale is rallying Maduro's supporters ahead
of next month's mayoral elections, it hasn't staunched demand for
U.S. dollars in the illegal black market, where the bolivar has
plunged in recent weeks to a tenth of its official value.
Instead of devaluing the currency, which would add to inflation
already at a two-decade high of 54 percent, Maduro is vowing to keep
prices low through Christmas and begin setting prices and profit
levels across industries. Speaking at a rally Tuesday night to
commemorate passage of the law granting him emergency decree powers,
he vowed to deepen his offensive against "speculators" who he says
are trying to destabilize the country.
"They underestimated me; they said Maduro was an amateur," he told
the crowd of 2,000 supporters outside the presidential palace. "What
you've seen is little compared to what we're going to do."
[Associated
Press; JORGE RUEDA]
Associated Press writers
Vivian Sequera and Joshua Goodman in Caracas and Frank Bajak in
Lima, Peru, contributed to this report.
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
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