The president of the Venezuelan National Assembly, Diosdado Cabello, applauds Wednesday as Venezuelan President Nicolas Maduro shows the document giving him special decree powers.

Story highlights

Lawmakers gave Nicolas Maduro decree power on economic issues

Maduro has engaged in an economic war against capitalism

"We are re-establishing prices so that the people's economic rights are respected," he says

Some fear he is putting the country on a socialist path, others call it a political ploy

Caracas, Venezuela CNN  — 

Venezuelan lawmakers have given President Nicolas Maduro special decree powers to fight an “economic war,” but the shape that fight will take is uncertain.

Maduro has promised to use his new powers – approved by the National Assembly on Tuesday – to make sweeping changes to the way the economy is run in the oil-rich, but poorly managed South American nation.

Among his priorities, Maduro says, will be to cap profits for businesses at between 15% and 30% and to enforce price controls on an expanding number of goods.

Some see this as a movement to a fully socialist model; other see political opportunism.

In recent months, Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples.

The so-called “enabling law” that grants him decree powers could make it easier for him to set price controls, as he did recently to an electronics and appliance chain he accused of price gouging.

The result was a run on the Daka chain of stores, as people mobbed to buy deeply discounted electronics in chaotic scenes that included some looting.

“Consumerism is not the path,” the President said Tuesday. “We are re-establishing prices so that the people’s economic rights are respected, not to consume without control.”

The underlying goal of these expanded powers are for Maduro to push a socialist agenda to the point of no return, said Jose Vicente Haro, a Venezuelan constitutional lawyer.

“What we’ve seen is just a little of what’s coming,” he told CNN en Español. “What Nicolas Maduro’s primary objective is now is to regulate the profits of all companies that provide services or produce goods.”

Those who agree with Haro fear that foreign investment in Venezuela will dry up as the government cuts their profits.

But behind the blustery rhetoric, there may be hints at a more pragmatic approach, said David Smilde, a Venezuela expert and senior fellow at the Washington Office on Latin America.

Faced with a difficult transition after the death of President Hugo Chavez, Maduro has adopted the economic war for political purposes, Smilde said.

The bloc that supported Chavez has been difficult for Maduro to keep together. By putting a name and a face to the “enemy,” as he did by singling out the Daka electronics chain, the President is trying to unite voters behind his party ahead of local elections next month, Smilde said.

“Their idea is to have this carry them through the elections,” he said. “I think it’s completely political.”

Behind the scenes, there are signs that the Venezuelan government is taking a less controversial approach to its economy.

To fight a shortage of dollars, Venezuela’s state-run oil company announced it will sell $4.5 billion in bonds, for instance. There are also reports that it will try to make up even more ground by selling gold from its reserves.

Facing shortages, Venezuela takes over toilet paper factory

Maduro hasn’t highlighted these moves the same way he has trumpeted his new decree powers, but they are telling of a more pragmatic approach, Smilde said.

The government’s short-term goal, Venezuelan analyst John Magdaleno agreed, could be to gain an advantage at the polls.

Once the election is over, the government will have to take unpopular steps, such as devaluing its currency, to curb inflation.

“I think it’s inevitable that to face the current economic situation the government will have to take some measures that will have a negative impact on the lower classes,” Magdaleno said.

On the streets, some Venezuelans see the economic war that their leader is waging as a necessity, or as a dangerous blank check.

“There’s no merchandise, and what’s available is expensive,” said Leonardo Guerrero, who sells fish.

He has seen variety falling and costs rising, and would like to see a “fair price,” for more products, he said.

U.S. expels three Venezuelan diplomats

Journalist Osmary Hernandez reported from Caracas. Mariano Castillo reported and wrote the story in Atlanta.