INTERVIEW-Venezuelan economy a victim of politics -industry exec
* Industry group warns lack of dollars hurting imports
* Conindustria: Economy is taking backseat to politics
CARACAS, Jan 23 (Reuters) - Shortages of consumer goods in Venezuela may worsen if the government does not increase access to hard currency and ease import bottlenecks, an official with the country's main industry group said in an interview.
Shoppers in the OPEC nation for weeks have faced an unsteady supply of products ranging from flour and sugar to some medicines - a growing annoyance even for Venezuelans who are used to sporadic shortages.
The government is focused on the health of President Hugo Chavez, the firebrand socialist who has nationalized much of the economy during his 14 years in power but has remained in a Cuba hospital since undergoing a fourth cancer operation on Dec. 11.
Chavez's prolonged absence has raised the specter of political instability and appears to be delaying a currency devaluation that economists and the private sector say is long overdue, as well as revisions to price controls that merchants say are driving scarcity.
"Political issues right now seem much more important than economic issues, so (the government) is not making decisions related to the economy," said Ismael Perez, executive president of industry group Conindustria.
"The economy is not paralyzed because people are still working and industries are operating, but they are limited by not having all the raw materials they need."
Though it holds the world's largest oil reserves and makes close to $100 billion a year in exports, Venezuela's economy depends heavily on imports to provide a considerable portion of its food, as well as sleek telephones and flatscreen TVs.
Companies now wait up to seven months for a government currency control system to provide dollars, Perez said, adding that the delays have dried up firms' access to credit.
And cargo ships spend weeks waiting at overcrowded ports, then face cumbersome customs clearance procedures that further slow the arrival of merchandise.
Nervous shoppers snatching up more than they need has helped create constant scarcity of some household basics, even toilet paper at times.
TENSE GOVERNMENT RELATIONS
The government, which has had tense relations with private enterprise since business leaders backed a failed 2002 coup, accuses companies of hoarding goods to destabilize the economy.
Authorities including a cadre of inspectors who enforce price controls have stepped up theatrical confiscations of products such as sugar, presenting warehoused inventory as evidence that merchants are manipulating supply.
The government this month raided a warehouse containing some 9,000 tonnes of sugar to be used for production of Pepsi, arresting four employees on charges of hoarding.
A representative of Pepsi-Cola Venezuela in comments to local media denied the accusations and insisted the government had given it a permit to store the sugar in inventory.
"These problems can't be solved with threats and seizures, There are important changes that are necessary but aren't being made," Perez said.
The country's main business group, Fedecamaras, complained this month that "insecurity, instability, uncertainty and misguided policies" were causing growing economic imbalances.
But Vice President Nicolas Maduro, Chavez's hand-picked successor who has taken on many of his boss's day-to-day duties, responded sharply: "It takes your breath away, the hate they have for the Venezuelan people."
A devaluation would provide more local bolivar currency for each dollar of oil exports, easing a shortage of hard currency that would speed up the pace of imports. But it would also spur the very inflation that the government is trying prevent.
Greenbacks on the black market already fetch close to four times the official rate of 4.3 to the dollar.
Perez says the authorities also need to raise the controlled prices for staple products that have remained fixed despite double-digit inflation. These include the corn flour used for "arepas," the Venezuelan pancakes that are typically eaten daily in place of bread.
And merchants want a revision of prices for thousands of other products such as deodorant and toothpaste that were capped under a 2011 law meant to control inflation.
The law calls for periodic revisions, but the government avoided them in 2012 - likely to avoid upsetting voters in an election year, Perez said.
Uncertainty over a possible devaluation, and the chance of further confiscations by the state, may mean that companies are unwilling to continue importing products.
"If the government doesn't provide dollars on time, if they don't stop the inspections and ease the controls ... we'll keep seeing these same problems and at some point we're going to face a crisis," Perez said.
(Editing by Daniel Wallis and Leslie Adler)