Title click to read article on the WALL STREET JOURNAL website.
"Foremost, devaluation by itself is not enough to revive a domestic manufacturing base that's atrophied amid a hostile operating environment. Few investors are willing to brave Venezuela's maze of price caps, currency controls and the ever-present fear of nationalization.
What's more, by keeping a subsidized dollar rate for importing food, medicine and essential items, Mr. Chavez removes any incentive for Venezuelans to produce what they need most. It will almost certainly remain cheaper to import beef from Brazil, for example, than to produce it.
The fact that Venezuela has ceased to produce meaningful amounts of food, medicine and other basic goods under Mr. Chavez puts his government in a Catch-22 bind. Mr. Chavez can't use devaluation to stimulate production of the most essential products because doing so would instantly make the imported versions too expensive for his mainly poor constituents."