"I'm a bachaquero"

0

Bachaqueros(It was starting to get lonely being the only zuliano on the blog, so I did something about it. Meet Roberto Torres Luzardo, a talented journalist based in Maracaibo, and the newest contributor to Caracas Chronicles.)

“I’m a bachaquero”

Roberto Torres Luzardo

One effect of economic chaos has been to create a new class of Venezuelan entrepreneurs locally known as bachaqueros. Their business model is simple: buy scarce, price-controlled items, and resell them for a profit. Often, this involves shipping goods across borders. Yet the question of who exactly these people are is murky.

There are a lot of myths at play. Off-road gasoline caravans and wayuu flashmobs are the most visible types of bachaqueo, but there’s much more to it than that. The middle-class has quietly figured out ways to get in on the trade: huge mark-ups are up for grabs without even crossing the border by reselling scarce items as a moonlighting gig.

Take Patricia*, for instance. She’s 35, and holds down a 9-to-5 office job. In her spare time, she goes to the movies, she bar-hops, and she’s also part of a 10 people-strong bachaqueo ring operating in a middle class area in the north of Maracaibo.

The way she describes it, you’d think she was talking about a knitting club.

“It all started in January, when I went with a friend to the drug store for some laundry detergent –Ariel, the good stuff”, she says.

Her friend asked if she’d help her get around the two-per-person limitat and buy some for her as well. Outside the pharmacy the friend came clean: his plan was to resell it and cash in.

And so it began. They hit up drug stores and supermarkets where they had inside contacts, stocked up on as much merchandise as they could, and resold them with astronomical profit margins. Her hobby rakes in ten to fifteen thousand bolivars a month, two to three times her actual salary.

Diapers and baby formula are her top sellers. She mocks desperate parents. Without a trace of shame on her face; she takes a certain pleasure in identifying as a shark.

“We’re opportunists. We’re a bunch of usureros. We prey on the needy. We don’t care,” she shamelessly blurts out.

Patricia –who wishes to be referred to as “La Pingüi”, her pseudonym– says nothing can stop this, not even the captahuellas, the fingerprint scanners that the government has put in place to supposedly break the back of smugglers. She says they’re easy to fool.

Luis Vicente León, of Datanalisis fame, told a roomful of people last week that 65% of those standing in line to buy regulated goods are looking to resell. And why wouldn’t they? The last official scarcity index reached 29.4% way back in March. Fedecámaras’ Jorge Roig puts the real figure closer to 85%. Price-controlled items are veritable gold.

Factor in the already shocking official rate for inflation (63.4% yearly as of August) and you can see a golden opportunity for turning a quick buck: no wonder the middle class is jumping on the bachaqueo bandwagon.

Bachaqueo gone airborne

In 2013, after a quick vacation in neighboring Aruba, middle-class mom Irene* used her Cadivi remnants to bring back some of the things she needed: deodorant, shampoo, soap, and those little dryer sheets that make your clothes smell nice. A friend offered to buy one deodorant from her. That was all the drive she needed. Two more trips saw her return from the Happy Island with boxes full of goodies that she then resold at six times the official price.

Even after she used up her subsidized dollars and started buying black market ones (eight times as expensive), she still turned a healthy profit. A year into her negocio, as she calls it, she moved the operation to Panama, where prices even better. Irene is currently on her seventh trip of 2014.

“Do you think there’s anything wrong with what you’re doing?” I sheepishly asked her.

¡Muchacho! Of course. First of all, it’s a sign that there’s a necessity here. And also, the prices I’m selling at are exorbitant: Bs. 450 for a deodorant…and still, people are happy to pay them.”

Mischief runs through her face as she admits a figure for an average month’s earnings. “Call it Bs. 80.000. Sometimes more.”

That’s 16 times the new minimum wage.

Hard-working Venezuelans?

Economist and college professor Gustavo Machado says that, since production of tradable goods is far from enough, buyers look past the high prices and prefer stuffing a bachaquero’s wallet to spending hours in a queue under the sun.

The culprits behind this madness are the economic policies that allow for multiple exchange rates, and turned our economy into Distortioland. Should these policies be sustained, he warns, economic growth will be very lucky to only stymie.

“There needs to be a change in policy so that this activity is not seen as profitable”. In his words, there’s no other way out.

Three factors explain the middle class’ growing interest in bachaqueo, according to sociologist and researcher Natalia Sánchez: a decline in high-paying jobs for qualified people, rocketing inflation, and the three-tiered currency exchange system that allows for a quick and easy profit.

However dismal the economic indicators are, her gravest concern is a social one. “Historically, we have constructed the myth that Venezuelans always find extra cash through hard work. But here we see you can produce earnings that are not associated with your knowledge or skills.”

Does the country run the risk of a long term attitude of bachaquerismo? Sánchez says yes. “It’s a real threat that can only be avoided by reducing the gap in education and improving its quality. And every day we’re further and further away from that goal.”

* Seriously, were you expecting these to be their real names?

NO COMMENTS

  1. It seems to me a reworking of ” el más vivo.” I remember people in the 70’s buying tons of things in NYC, Miami, Paris, Rome(Está barato, dáme doce) -high end items-and then selling them from their homes.

  2. Great article! Welcome Roberto!

    The biggest bachaqueros are those who have access to dollars at the controlled price of 6.3 bolivars each. Reselling them at 100 or so allows for a tidy profit, without having to travel or stand in line.

    Why bother to produce anything if pure access to financial power provides such a handsome living?

    • why do you think there is an ethical issue here, from the perspective of regular citizens? you know, aside from the government officials deciding to stick to this horrendous set of policies in order for them to extract rents without doing anything (buy at 6.3 sell at 110).

      There is an arbitration opportunity and people take it. They are providing a service to those who do not want or cannot spend time competing to get a government handout in the form of subsidized items. Once the forex controls and price controls are lifted, the incentive/opportunity will go away.

      What has taken too many years is for the price/forex controls to collapse.

      • I don’t think a nation built on arbitrage instead of the idea of working hard, studying hard, getting good at what you do, and reaping the rewards for it is the ideal. But maybe that’s just me.

        • As soon as the incentives dissapear, people will go back to getting an education and search for jobs, like everywhere else in the world

        • That’s only a temporary thing, look it from the market perspective, competition grows where high-profit is until it stops being a high profitable business for newcomers.

          But I agree on the fact that it doesn’t make the country grow and it exist only through economic distortion.

        • At the end of the day most of commerce is arbitrage. There is absolutely no difference between these people going to Panama and bringing goods to then resell than a classical importer doing the exact same thing.

          The fact that the prices she is charging are considered high, is only by comparison to ludicrous controlled prices. She is charging the price that people are willing to pay to obtain these goods, the fact that they are scarce due to immoral governmental policies is not her fault or problem.

          These people should not be reprimanded but encouraged! They are bringing goods to market that consumers clamor for and desire, and playing a very important role in not only helping control scarcity but getting scarce goods into the hands of those who value them the most. A parent who for whatever reason cannot breastfeed their baby will go well out of his way to be able to purchase baby formula, no matter the price, while one that can breastfeed and buys formula for convenience will balk at the high prices and leave the existing resources for those that actually need it.

          What is really wrong with this country is not the entrepreneurial spirit of people finding ways to make money and satisfy consumers needs but the fact that these same entrepreneurs have been brainwashed to think that “We’re opportunists. We’re a bunch of usureros. We prey on the needy. We don’t care,” instead of understanding the immense benefit that they are providing to society. Until this anti-capitalist attitude changes we will continue down this inexorable path to destruction.

          • Not much difference between these guys and a classic importer IN VENEZUELA, you mean. But then classic importers in Venezuela have become rich for using special access. That has always been the case in Venezuela, not in more or less functional countries. A disproportionate amount of those who became rich in Venezuela became so because they were importers in a country that has had controlled currency exchange, where importers have special channels, where competition is scarce.

          • Well put rjvelasquezm!

            I find it appalling that most people look down on those that provide such an important service. I say they are the ones that make the country grow. Imagine if not for them everyone would need to go an do the lines to get the goods they need. How would that help the country grow?

            This commonly shared idea that commerce is a bad thing is hugely detrimental to society (just like the idea that politics is a bad thing). It makes people rejoice when the government controls prices or implements Dakazos, not realizing its “pan pa’hoy, hambre pa’mañana”, bread today, hunger tomorrow. People, even economist, do not realize that commerce is what makes the world turn. All the hard work and all the productivity, is for nothing if people are not buying whatever is produced.

            En español:
            Hora de revivir los cuentos para niños MADUROS: http://goo.gl/VZg7Sw

            No se pierdan la mejor explicación de lo que ocurre en Venezuela.
            En el minuto 6:30 se habla del especulador, el extraperlista, el bachaquero:

            “en todas las plazas de todas las ciudades españolas debería haber un monumento al especulador … debería haber una estatua un reconocimiento a ellos”

        • Juan, I agree with you. My point is that “a nation built on arbitrage” is what we have ever since oil was discovered, even when we just exported mostly cacao.

          Are these economic policies the result of what the people want, or are people just reacting to an the incentive structure (current policies)? Would Venezuelans elect a leader or put in power a political party that offered to end subsidies and handouts (populism) for hard work and economic progress?

          From recent history it seems that elections do not reflect the will of the majority of Venezuelans. Therefore it will be most likely a party that will take on power without addressing/debating these issues, and acting without an explicit mandate to build an economy based on “the idea of working hard, studying hard, getting good at what you do, and reaping the rewards for it is the ideal”. Because the consequences of that idea for most Venezuelans seem contradictory in the short term. e.g. work hard, now you have to buy gasoline at 1000% more than before. e.g, work hard, now you have to pay for the electricity consumed in your household, and so on.

      • This is a service from the point of view of the Soviet black economy and the pseudo-capitalists-feudalists that rule in Venezuela. It is not a service of anything for the rest of the population.
        This is a form of parasitism.

        This system is not sustainable, as simple as that.

        • Arbitrage creates efficiencies in the marketplace by offering consumers more choices. However, price controls and forex controls prevent domestic entrepreneurs from producing products to fill in the shortages and seizing the profits otherwise commandeered by bachaqueros. I can’t imagine how this furthers the revolution or serves the interest of the regime.

          The sad and infuriating truth is that a military officer read a book on socialism, and then a bus driver took over his mess.

          • I can’t imagine how this furthers the revolution or serves the interest of the regime.

            It seems you fail to see the aim of the ‘revolution’.

            All the regime cares about are two things :
            – To keep its hands on oil money, a concentrated source of wealth which is easy to control and divide between the members of the regime.
            – To destroy any existing actual or potential counter-power that may challenge its grasp on oil and prevent any new counter-power from emerging.

            The poorer the country, the better for the regime. Poor people are easy to control and repress. Poor people may revolt once in a while but they don’t run revolutions or overthrow regimes. As long the process of lumpenization of the population does not trig an insurrection too large to be contained or repressed, the poorer, the better. It only has to be done slowly, so people get progressively used to chaos, destitution and helplessness, just like the proverbial frog swimming in its pot on the stove, just like Venezuelans for the past 15 years.

            Remember, for an oppressive regime, when a large rent like oil is available, your countrymen are no longer a resource you need to control soviet or Mao-style and make work at your benefit through coercion or conviction. They are just people you don’t care about and who just happen to stand on your oil. They are a mere hindrance, an encumbrance you just need to neutralize or eliminate.

          • I am afraid you are 100% correct. Massive impoverishment, death from disease, middle-class flight, and even deaths from crime do nothing but assist the ultimate goal of monopolizing the oil rents for an increasingly small and powerful elite.

      • “They are providing a service to those who do not want or cannot spend time competing to get a…”
        Getting to a store and buying all the stocks before you get there, forcing you to buy it from me at the price I want is not a service, it’s extortion, plain and simple.

        The price controls stand because they are the root of mafias.

        • You are confusing the consequence with the cause.

          “They” buy all the stock from the store because many people are willing to pay the higher price and the store is not allowed to sell it at that price.

          – If no one was willing to pay the higher price they would be no reason to buy and resell.
          – If the stores were allowed to, the stores would sell it at the higher price, also eliminating the reason to buy and resell.
          – The prices are high because demand is higher than supply: scarcity.
          – The supply is low because the prices are controlled eliminating the reason to produce the product in the first place: profit.

          Low profit -> low supply -> scarcity -> high demand -> high prices.

          The bachaqueros have nothing to do with it.

      • There is an ‘arbitration opportunity’ as you called it, and clearly massive incentives to do so; but that does not mean ethics is not related in this case. We could wonder, do those ‘entrepreneurs’ register their profit and pay taxes ?

    • Bachaqueo is at the mid to low skilled group of people. To the high end is cadiveros/permuteros that screwed the generation. Real work and inventive is not chased anymore by the generation between 25-30, when you see kids that created around $300K permuteando you can imagine not many of them will ever want to work again.

  3. My wife’s mother did some bachaqueo trips as well. She made about 10.000BsF per trip. Just by doing lines at supermarkets in san francisco (south of maracaibo,where scarcity and lines aren’t as strong as in the city), and going to the border to sell it.

    You needed to work for about 3 months without spending a single bolivar of your minimum wage to make a bit less than 10.000 at the time.

  4. “Entrepreneur” is a kind word for a bachaquera like Patricia…she’s an entrepreneur in the same sense that a bank robber is a self-made millionaire.
    But if bachaqueo keeps growing and makes the shortages even worse, if only to turn more people against the government and help break the triple exchange rate, to these guys I say: Go apeshit.

  5. I’m going to be called names, but this is not just the evil vivos, is basic economics.

    Incentives matter on human behaviour. And, if people are willing to pay 450 Bs. for a deodorant….maybe that’s closer to the actual price. Though the illegality of the operation increases the price, same with the dollar.

    There will be shortages on the country until the Law of Fair Prices and the exchange controls are eliminated. Is that simple. If the country can’t handle it without descending into a Somalian hellhole, I mean, another “Caracazo”, then the country is doomed to become a Chinese/Russian colony and we all are just wasting our time.

    • $4.50 for a stick of deodorant is a bit pricey, but taking into account the very inefficient logistics the Venezuelan market implies, it’s about right.

      And, no, there won’t be another Caracazo. The same people who instigated the Caracazo are running the country, in case you failed to notice.

        • The problem is with the minimum wage then. Venezuelan workers are vastly underpaid on all levels, that’s one of the many reasons for the brain drain.

          • If you really think the only problem is the amount of the minimum wage, then you’re thinking in the same useless terms that chavismo and most of the mud parties are, thiking that just “raising the minimum wage” will do any useful thing at the day’s end.

            Wages are costs for products or services, touch the wage, and retail price goes up, in fact, raising the wages is, along with printing inorganic money at central bank, the two worst measures to fight inflation.

            The actual problem is the “robadera”, where all the money (Including dollars to import) and products (Including supplies to produce) are being hoarded by regime-sponsored and controlled mafias thanks to all the ridiculous arbitrary regulations.

            If people were making 20-million bolivars in minimum wage, then fine, you could spend 450.000 in a tiny deodorant (And I’m not even sure in that relation either), as a deodorant isn’t a luxury dispensable product, is a needed product as toothpaste and bath soap are (End everybody who claims “deodorant’ isn’t neccesary” is a moronic liar)

            You can bet your whole salary off that if price regulations didn’t exist the products could be found in the streets, yes, more expensive than capped amounts, of course, but not at the absurd black market prices that exist now (In fact, there wouldn’t BE a black market then)

  6. Henry Kaiser, one of the early twentieth century American industrialists was asked how does one make money? His answer became a classic quotation, “Find a need, and fill it.” I see nothing evil or even unethical about being a “Bachaqueo” or a smuggler. The government has created an unnatural (even unethical) system that is preventing goods from getting to where they are needed. The people circumventing this unnatural system are simply filling a “need”.

    It may well be illegal, but in my opinion, and that of most Venezuelans, it is ethical. When the government creates a system in which there is such a huge disparity between that which the society as a whole considers moral and the law, the society loses respect for all laws.

    • You fail to notice that this practice is not only about importing goods but mostly about buying at regulated prices and selling for “market” prices. There’s no rational way to see this as ethical. These people are behaving as scum and should be jailed.

      • This is the kind of problem where if you take one of them away, a couple more will pop up to fill the void as inflation keeps ticking and the profits get more and more tempting. Going after the bachaqueros is the same ineffective logic the government uses and it’s very attractive because it’s more satysfying to point at some guy and say he’s the culprit rather than admitting the whole system is broken.

      • Yeah it’s unethical but in a “there’s no way you could expect for this not to happen under the current conditions in any society” kind of way

      • So in your opinion the ones to blame are those bastards reselling “Speed Stick” for Bs.450 rather than those who created the conditions that limit the offer of the product. The whole “bachaqueo” phenomenon is a consequence of a much broader economic problem that you apparently do not seem to visualize.

      • It is the regulated prices that are unethical not the bachaqueo.

        The high prices are not created by the bachaqueros but by the high demand and low supply: scarcity. The scarcity is created by the regulated prices.

        The regulated prices create scarcity, high prices, inflation, unemployment, economic depression and may result in violence. Bachaqueo actually help ease those problems.

  7. So the government uses Venezuela’s money to subsidize food for the poor. Instead, middle-class people buy It and sell it in Colombia at a nice profit. So Colombians benefit, and in Venezuela, “no hay.”

    This may be a stupid system created by the government to reward its supporters; for sure primary culpability rests with them. But surely we can see that the bachaqueros are not acting ethically, either.

    • Interesting… I see a debate.

      Resolved: Breaking the law is always unethical. True?/False?

      Personally, I have my own set of ethics, independent of whatever laws the authorities of whichever country I happen to be in make. I am scrupulous in adhering to my own ethical code. My compliance (or not) to the local law is purely pragmatic.

      • It is not ethical to hoard goods when they are scarce. Of course, the system is at fault here, but the purpose of the present system is to make these goods available to the low income class and that is obvious. When the law has a clear purpose it should be enforced. If breaking the law could be classified as ethical in any adequate viewpoint, then it serves no purpose and anarchy ensues. What’s ethical about making 20 times more than someone who is working by simply exploiting a system? It is a crime and should be punished harshly.

        • The goods are only scarce because of the price controls. The way the system is working now, is that people who do have enough time, are spending it standing in lines. They then resell the goods at a mark-up to people whose time is more valuable. I don’t see the ethical dilemma. What is unethical is the government forcing goods to be sold at below market prices. Suppose the government were to set the value of your wages at below market price… being forced to work for less than your value, you would consider slavery, and that is universally (nearly) considered unethical.

          Look, when the laws are rational and reasonable, it is pragmatic to follow them. However, when the laws are not reasonable and become universally ignored, only a naive fool adheres to them. You are correct that this leads to anarchy. Look around you… what else would you call the state Venezuela is in today?

  8. “We’re opportunists. We’re a bunch of usureros. We prey on the needy. We don’t care,”
    And then they complain when somebody ransacks their stocks, punches their asshole faces or snitchs them with the regime.
    Disgusting as they are, like good ol’ vivos, they’ll resort to “it’s just capitalism!” excuse to justify what they’re doing.

  9. Cuba has solved this problem by running CUC stores that charge exorbitant prices for scarce goods. They’re making a killing.

  10. In highly distorted economies the forces of the market beak their ways through fishy channels.
    You find the same stories in the fascinating detective stories of Cay Rademaker, which are set in the immediate Post War period in Hamburg. Or in the writings of Hernando de Soto.

    Great posting.

  11. In one of my visits to Venezuela I met an university friend who is a very entrepreneurial bachaquero, in her spare time (9 to 5), like the lady in the article, she is a solicitor, but at night and weekends she drives to Cúcuta (the colombian border) to sell tyres.

    The profit comes from selling the tyres that she buys in Venezuela for her Toyota 4×4. In Cúcuta her contact gives her the full service, they take the new (her) tyres and give her a old set that she can use for her trip back to Gochilandia (Venezuela), they also take some petrol and if she needs some extra cash for a rumbita she probably will sell some leche or desodorantes. Four hour later she is in Gochilandia having a Solera in a posh cafe with 20.000 bolos in her poket.

  12. There is a threshold line where the bachaquero or free lance arbitreur stops being the legitimate provider of a social need and becomes an extortionist , In the US when hurricanes or other natural disaster make certain goods scarce ( e.g potable water or portable electric plants ) there are people who will take advantage of the situation to charge 4 or 5 times what they are ordinarily worth, no doubt these profiteers serve a useful social function in making a scarce item available to others who need it , at the same time they are playing on the other persons need to extract from them an unconscionable gain. This latter aspect of their behaviour can never be praiseworthy.

    Personally I have been in situations where govt induced chaotic conditions allow me to obtain an exhorbitant gain in certain business transactions , I have however calculated what I should fairly charge if such conditions didnt exist . People sometimes are grateful but Im sure other times they simply take me for a fool . The truth of the matter is I dont do it for them but to obey the dictates of my own conscience.

  13. All this theories about social behaviour, polical science, economics is great for us readers of this blog pero pa some people with quince y último bachaqueo no es una opcion, is the only way to pay the bills. How many of us have tried to live with 5 mil bolos per month and pay the bills, buy food and feel that you are going somewhere in life?.

    Bachaqueo is just the result of the economic chaos that chavismo created. Let’s change the system, let’s encourage people to create wealth using their skills and not just been a parasito.

  14. In Venezuela, land of central planning debauchery, the most lucrative entrepreneurial activity now requires doing minimal work and preying on the desperate. So take note kids, your government is encouraging you to ditch honest work and join the ranks of profiteers who take advantage from the massive clusterfuck of supply-demand distortions they created by suppressing market forces.
    The saddest part of it all is that none of these people will acknowledge the damage they are causing to their own society. Citizens have no other choice but to pay exorbitant prices for the products they cannot find. You can only then ask yourself, are price controls REALLY helping you, the consumer? By contrast, if we do eliminate the controls, producers will be incentivized to increase output by expecting a new price equilibrium, and prices will then eventually keep falling down due to perfect competition! There would be no more shortages!
    But alas, this government’s only concern is to continue enjoying the benefits of corrupt power and easy wealth they have grown accustomed to expect. Venezuelans only need to look anywhere else abroad to realize how their daily lives are ruled by paradigms which would be deemed intolerable by any other middle-income democracy in the world.
    What then, makes Venezuela so unique and thus impervious to seeking change for the better? Are the deciding voting patterns of the masses and poorer classes still influenced by decades of resentment of elite rule? Can hate really justify their own misery?
    Or is it rather the hegemony of the Executive power over all existing state institutions which does not allow for any alteration of existing political structures?
    Perhaps it goes beyond these two consensus views. Perhaps it revolves around the fact that we are a monoproducing economy. Venezuela’s destiny will always be linked to that of oil. And my friends, whoever controls the billionaire revenues of this national industry will be able to buy their way through the briberies, appeasement, and necessary force required of a populist government seeking to perpetuate itself forever.
    This is so crystal clear that they even use it as their official slogan: “Patria, Socialismo (is it, really?), o Muerte. ¡Venceremos!”
    This ruling class will not hesitate to do whatever it takes to subjugate national interests and the country’s future potential for their own self-seeking privileges.
    Y la vaina seguirá así hasta tal punto que me pregunto, ¿con que ética vivirán los venezolanos si se acostumbran a vivir en decadencia moral?

  15. It’s very interesting that all the discussion about ethics/non-ethics nobody has mentioned “taxes”.
    Why is this? Is it culture of the “viveza criolla” that always make us forget that little uncorfortable detail?
    These bachaqueros don’t pay import taxes and of course, the earnings don’t get declared in the income tax. just like they did in the 80’s when some people brought clothing from Miami to sell.
    Negocio redondo all the way, and very unethical.

  16. It’s no wonder that in a country that has invested huge amounts of money in creating and perpetuating lumpen (they are, in effect, paying people so they stay lumpen), the more educated, but equally wicked an vivaracha middle class would figure a way to cash in on this giant slide of big-money-no-effort. Unlike the rings working until now, they might just invest it in a way that allows them to end up on their feet and not having to work for the rest of their lives, when bachaqueo, presumably, won’t exist.

    This creation of lumpenness, until now spanning Misiones, universities, etc., where young limpiabotas and vendedores de platanito are led to believe that a year-and-a-half course of «Bolivarian Doctrine» or «The Writiings of the Comandante» with a little anatomy or neurotripa thrown in makes them doctors, is rapidly extending to the university system. The one that used to make REAL doctors, economists, engineers, etc, I mean.

    I wonder what would a post-Maduro government do with the tsunami of useless, uneducated, worthless, clueless people that will eventually emerge from this situation, a debased population perfectly accepting of the current state of affairs, but would maybe turn into a raging mob when they are stripped of their Venezuelan way of life.

Leave a Reply