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Venezuela: State Grows, But At Huge Cost

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As President Hugo Chavez moves to nationalize the top private companies, there are growing questions about the viability of the top state company PDVSA.

BY CHRONICLE STAFF

Venezuela may be an oil-rich country, but you wouldnt believe it by visiting supermarkets in Caracas these days. Basic items like meat and sugar are missing thanks to government price policies that have resulted in importers and producers from losing money by selling at artificially low prices.

"The price controls that were established by the government were totally divorced from the cost,"  says Pedro Palma, director of MetroEconomica consultancy in Caracas. "They condemn producers and importers and traders to lose money." 

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