A silly response to a serious crisis (UPDATED)

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Food Minister Osorio
Food Minister Osorio

(Former CC intern Rachelle Krygier is back, and is reporting from Caracas.)

Venezuelans go to bed not knowing if in the morning they will be able to find, let alone afford, basic staples. Providing for leisure activities for themselves or their families is so far beyond the pale, many have stopped thinking about it.

And what is the government doing about this? Basically, making fun of us all. Rather than appeasing the crisis, intensifies it.

Pablo Baraybar, president of the Venezuelan Chamber of the Food Industry (CAVIDEA), alerted the country on Monday about an order sent to private food companies by the National Superintendence of Agriculture and Food (SUNAGRO), to redirect from 30 to 100% of basic goods like milk, pasta, oil, rice, sugar and precooked corn flour to public food suppliers like Bicentenario,  PDVAL, and Mercal.

In a press conference, Barayar explained the severe consequences that such a move would entail.

There are 114 thousand private retail outlets and 7400 public retail outlets. That is, there are 15 times more private than public retail outlets, he said.

Three out of four times, Venezuelans go to private suppliers near their homes or where they find shorter lines. Redirecting products from 113 thousand private retail outlets to only 7400 public retail outlets would concentrate essential goods in 15 times fewer supermarkets.

Private suppliers would not be able to provide goods, meaning Venezuelans would have to travel longer distances to find what they need, and they would have to spend more time in longer lines.

Roberto Leon Parili, President of the Alliance of National Users and Consumers (ANAUCO), said public food suppliers are not structurally capable of providing for the needs of the 92 thousand people that CAVIDEA estimates would shop in each public food supplier.

The bachaqueros, those who stand in line and buy products to sell for higher prices to those who have no time to engage in the adventure, would earn even more money, as Venezuelans would be less willing to stand in longer queues and would be more desperate to find goods.

The government has tried to control bachaqueo by establishing limits on what each person can buy, through their ID numbers or through fingerprint verification machines. SUNAGRO’s measure would revert any minimal benefit from this, and would increase the profitability of this informal job that fuels inflation, speculation and scarcity.

Private food suppliers would go bankrupt. Thousands of workers along with truck and supermarket owners would lose their jobs.

Inflation and scarcity aren’t just numbers that represent the cracking Venezuelan economy. They are factors that affect Venezuelans’ daily lives in many levels, no matter their economic standing. They are the measures of a deeply personal tragedy.

Inflation and scarcity determine the way Venezuelans spend their money, the amount they can save, and the quality of the products and services that they buy. It also impacts the way they spend their time, taking hours from their productive day to spend in lines and searching for basic products in various supermarkets.

The paring of soaring inflation with the high levels of scarcity is an on-point recipe for daily fatigue and frustration. Venezuelans’ daily conversations consist of, What do you bring in those bags?, Where did you find it?, Have you seen how much an apple costs? Its ridiculous!, I can’t afford my kid’s school shoes.

Products that should be national icons, such as coffee and corn flour, have become a luxury. Basic goods like tampons, condoms and shampoo are what people who can afford to travel bring back home.

With the government’s move, the solution to scarcity and inflation becomes a distant dream.

To grasp the impact of such an irrational initiative, one needs to understand how miserable the daily life of a Venezuelan already is.

Although the official inflation number hasn’t been updated since 2014 (68.5%), the increase of the cost of basic goods is there for everyone to see. No matter how much the government tries to hide it, the effect of disorganized spending and arbitrary measures is evidenced in the lives of every individual being in the country.

According to the Center of Documentation of Social Analisis of the Venezuelan Federation of Teachers, (Cendas-FVM) people need eight minimum wages to pay for the basket of basic needs, which is a calculation of the cost of food, services, clothing, health, housing and hygiene for a family of five people. Eight minimum wages for five people.

According to their calculations, the cost of living has increased 163%, or five minimum wages compared to last year.

Most of it happened in only one month, from May to June, when the cost of basically everything increased in unimaginable amounts. In a month, the cost of the basket of basic needs increased by 26.5%, more than a whole minimum wage, according to CENDAS-FVM.

Clothing increased by 48.3%. Food increased by 29.7%. Hygene products by 5.8%, health products by 4.9%, housing by 1.5%. The cost of education, which is not included in the basket, increased by 29.1%. Thirteen minimum wages are needed to afford the list of uniforms and materials for pre school and high school.

Venezuelans are stressed out by dealing not only with an increase in the cost of living but also with not being able to find vital goods without spending hours (5 per week according to Datanalisis) in queues with no guarantees.

Twenty basic products and at least 49 additional ones are scarce nationwide according to CENDAS-FVM. According to Datanalisis the scarcity number in Caracas is 65%.

Leon Parili said it is not about social classes any more, because every Venezuelan wants to eat arepas and rice, and every Venezuelan needs to be able to choose where and what to buy. ¨They have sold us the idea that the populace is the sovereign, so how come they take from us the right to choose?¨ he said in a press release on Tuesday.

Baraybar said that the solution, which is CAVIDEA’s proposal, is to produce more rather than redistribute the existing products.

“The products that we have are not enough. What we need is to produce more. Eight billion dollars were assigned to the Vicepresidencia Agroalimentaria to resolve the scarcity problem. What we ask is that they give us 18 percent of that, to be able to pay the debt to our foreign providers and reactivate our production lines. If so, we would immediately be able to produce 32% more. And we ask that the state, which produces 40% of the national food supply, produces to its 100% maximum. That is the only way to satisfy demand inside the country,” he said.

The Minister of Food, Carlos Osorio, accused CAVIDEA of publicizing false orders in an interview with Diario 2001. He said that what they are looking for is to balance the distribution of food, and that they are not trying to favor any public food supplier.

But, Baraybar, said in an interview with CNN espanol “balance cannot mean sending more products to less retail outlets.”

If SUNAGRO´s measure only exacerbates the crisis, then why is the government doing this? Don´t they need to appease people by relieving them from economic stress before legislative elections in December the 6th?

One week ago Henrique Capriles Radonski predicted the electoral move in a press release. He said “a politically motivated formal control in the distribution of goods is coming.”

Through the move, the government intends to prove that the economic war theory is true. They want to show that products can only be found in public entities, and that despite queues, they are there, in “fair” low prices – unlike the ones in private supermarkets where private owners and producers allegedly are conducting a war against the government and the people, by producing less food and selling it at unrealistically high rates.

Because, ultimately, it’s not the products they care about. It’s the narrative.

UPDATE: SUNAGRO backed down this morning. Through a message on its website it affirms that the measure is no longer valid. Apparently they heard CAVIDEA’s warning and formally reverted the order that minister Carlos Osorio had said was false.

 

1 COMMENT

  1. They have to do this to show that they are in control of things , that they are all powerful and can magnificently make drastic things happen that affect the lives of those below them , it boost their ego or perhaps protects their overgrown egoes from going flat with all the recent failures , The narrative is not going to be persuasive to anyone who has to make much longer queues to obtain the basic stapples they need to live , something which is bound to happen as more people have to go to much fewer places to buy what they need , the prices may be smaller on those items which now people will be forced to buy at govt stores but the rationing makes the higher prices people must spend on those items which are not regulated even more irritating and exasperating !! The narrative will not be persuasive !!

    • you are lucky because you CAN CHOOSE NOT TO GO TO MERCAL. That is exactly the point of the article. If you just need a basic staple, and cannot afford a bachaquero, what other alternative do you have? Do you really think that people enjoy being humilliated? do you think they are entertained while in queue? do you think that maybe they like socializing for hours on end in a MERCAL…
      I bet anyone would love TO BE ABLE to do without… just like you can.

  2. “Through the move, the government intends to prove that the economic war theory is true. They want to show that products can only be found in public entities, and that despite queues, they are there, in “fair” low prices – unlike the ones in private supermarkets where private owners and producers allegedly are conducting a war against the government and the people, by producing less food and selling it at unrealistically high rates.”

    I believe the paragraph above is over complicating it about proving their economic war theory on a logical,intellectual level. I think it’s much more simple than that. As scarcity gets even worse if only the government stores are where you can find things then people will feel good about the government. It’s an emotional thing about popularity. It’s about the government making brownie points with people. The lower classes really grasp what’s going on. Whoever gives them something or cells that something cheaper is good even if it’s the same people who have wrecked the economy and turned their world upside down. What’s already happening and this latest move of the government will only reinforce is a kind of Stockholm syndrome, where the people start to identify with the hostage taking terrorists because they are the ones who throw them a little something once in a while ignoring the reality and severity of the bigger picture. I also think this latest move is an attempt to fill the embarrassing increasingly empty shelves at the government outlets. Plus you have the selfish motivation of the government officials that stand to profit financially from this that the ever increasing disparity between the open market and government store prices the opportunity for arbitrage becomes even more seductive so of course those in power are going to divert more to the places where they can profit the most.

  3. One conclusion from this piece is that people are either starving or nobody earns minimum wage any more. The Venezuelan minimum wage is just another absurd number, meaningful only in that it reveals the government’s ineptness, it’s inability to respond properly to the crisis.

    As a corollary to the absurdness of the nominal minimum wage figure, how much money is the government bleeding by not collecting what it could on all tariffs whose real value has been thoroughly corroded by inflation. Not to mention taxes. I imagine double book keeping is the norm?

    • Ever heard of Tigritos, segundas, palancas, guisos, mordidas, enchufes, ‘pal fresco, bajate’la’mula, cuanto-hay-pa-eso?

    • “Not to mention taxes. I imagine double book keeping is the norm?”

      I’m sure there is some of that going on, but with the ability of SENIAT to look at your bank account(s) anytime they want it would take some pretty good contortions to avoid reporting sales.

      SENIAT can look at your banking without your knowing, access your books anytime they want and in general stomp through your records without so much as a reason.

      Ditto for your personal finances

  4. Unbelievably tone deaf response to the needs of the people! I can’t imagine even the poor who support the government will thank them for even more incredible lines.

  5. It just confirms that they are true, to the bone Marxist. If there is trouble, central government planning and intervention by the “enlightened” government is the only response.

    They also seem to import one of the premises of bad religion to their Marxism. If it doesn’t work it’s because we have not been PURE enough and true to our god, so we have to redouble the commitment! In this case more central control.

    At the end they just show what asses they are. The original Marxist have all, except North Korea, abandoned the whole folly. And did they try. Communism had a good run in the 20th century and did it with different incarnations of Gulags and yet with all their will and power it did not work!

    But more deeply I think we have the problem of recalcitrant ideas. It is just to painful to admit that the god to which they worshiped through their lives is just false, a bad god. They end up being like the Joker in the Dark Knight:

    “Some Men Just Want To Watch The World Burn”

  6. No importa que el pueblo se muera de hambre, lo que importa es mantener la mafia y la propaganda.

    No importa que la persona pierda cinco veces lo que debería gastar, lo que les importa es alimentar el pensamiento de que “son más inteligentes que los demás porque no hacen cola”

  7. Unfortunately, things need to get worse, before they get better. People are having to learn the hard way.

    As terrible life has become for most people, —-especially the poor Chavistas— the time they spend in queues complaining about inflation reinforces their newly-found conviction that Chavismo or at least Masburrismo is a lie and doesn’t work.

    If the Escasez problem suddenly started getting noticeably better, with inflation a bit more controlled, less Colas, the under-educated, enormously ignorant Chavista Millions, plus the Millions of direct enchufados, would start having doubts again, even supporting the regime again. Cheap food, Free Gifts, TV’s, vivienda promises, cash, threats and intimidation every, Massive barin-wash and Propaganda, a few Smartmatic tricks, and you have your fraudulent elections again, Mud “wins”, 55%.

    Sadly, especially in such vastly ignorant, brain-washed, deeply bribed, profoundly corrupt countries, the Axiom “It’s the Economy, Stupid!” is more valid than ever. The only way to extirpate such disguised Dictatorship cancers is through enormous popular discontent.

  8. “Through the move, the government intends to prove that the economic war theory is true. They want to show that products can only be found in public entities, and that despite queues, they are there, in “fair” low prices – unlike the ones in private supermarkets where private owners and producers allegedly are conducting a war against the government and the people, by producing less food and selling it at unrealistically high rates”.

    And guess what, this Marketing strategy just may work for a couple Million of under-educated, naive, incredibly ignorant Venezuelans, which is your Target Audience, remember, all you need to stay in power, if that. Those are the ones who still believed until recently, or still believe in Imperialistic Wars, or that Cuba and North Korea are Wonderful, any wild stories you tell them.

    Think about it: You strangle the private outlets even more, while forcing people to go to Chavista Hot Spots, channeling them en-masse where they can more easily control prices and availability, and feeble minds.

    You have’em all right where you wanted them to deploy your massive pre-elections Brain-Washing, Bribes & Threats Campaign!

    The sheep are aligned, by the thousands, in easy-to-target Colas, ready to be bombarded with more lies, bribes, gifts, false promises lost-job-threats or se-te-acabo-tu-tigrito- and other intimidations. Perfect storm logistics for a filthy, massive electoral campaign.

    Remember that you only need a couple Million gullible votes, if that, when you already have threatened many more than the 3 Million direct enchufados working for the Dictatorship, plus the Gerrymandering, the inhabilitaciones, CNE tricks and Chavezmatic Frauds.

    And if this latest ruse doesn’t seem to be working by November in the polls, you simply light up the Guyana fuse and declare Estado de Excepcion, no elections, y listo.

  9. Great article!

    It’s not about control, it’s not about stupidity. It’s about the feeling you get, being poor, when you walk into a mercal. The feeling needs to be “they pulled it off again! Fuck it’s good to buy this much rice. And they can’t find any! Ah. There is a god.”

    Unsustainable in the long run the narrative may be, but it is not the ignorance of the poor fueling it.

    It is the indignation brought on by the kind of hunger that is sorrounded by food.

  10. “The products that we have are not enough. What we need is to produce more. Eight billion dollars were assigned to the Vicepresidencia Agroalimentaria to resolve the scarcity problem. What we ask is that they give us 18 percent of that, to be able to pay the debt to our foreign providers and reactivate our production lines. If so, we would immediately be able to produce 32% more. And we ask that the state, which produces 40% of the national food supply, produces to its 100% maximum. That is the only way to satisfy demand inside the country,” he said.

    First, that eight billion was siphoned off long before it ever got to the places for which it was targeted. Second, even if they pumped 100 billion into the “production lines,” the food supply would not increase much if any. The capacity to do these jobs and that work has mostly been compromised through hands outs and nationalization of once-productive resources, which all have since gone south. It totally pisses of the government that they cannot control Polar, the biggest private, national provider of foodstuffs in Venezuela. But they know perfectly well that if the operation was handed over to government “officials” to run, Polar would tank and the country would starve. As is, the government is basically saying all food providers have to hand over what they have (30 – 100%). How long do you think that will last.

    I wonder if some day soon the food basically runs out. How much longer can that be, really.

    JL

  11. Of course while we were bashing the measure the govt reconsidered and took it back , maybe they are not as riguidly committed ideologically as we think they are , they are sensitive to how the public response to what they do can hurt them on the political front , the opposition people ( a big big chunk of people ) went bezerk and they prefer not to rile their enemies so much that they are all motivated to go massively and vote in the next parlaimentarians , they like to rub us with the impression that they are omnipotent and can insult us at pleasure with really atrocious decisions but sometimes they know that theyve gone too far .

    Only this morning went out to various queues , and THE HEAT WAS ON, people were very angry at what was happening , much more than normal. the protests were loud and vociferous . If Maduro had appeared in one of those queues he would have been strung up !!

    Apparently polls say that even if the oppo out number the regime supporters some 17% , ( in terms of voting intent) , of those that dont know if they are voting there are more oppos than regime supporters , meaning that if the oppo can muster more of its people to go out and vote their mayority climbs to an even greater propportion , the govt has to factor in what this means . They have to dismotivate the oppo people into not voting (weve read the messages here on this blog : nothing is going to happen , they will steal the election anyway, Mud leaders are crooks etc), while taking care that what they do ( abuses and insulting measures) dont boomerang and movilizes the stay at home oppo into angrily going to the polling boots. Its a difficult balance !!

  12. Capitalism produces, socialism redistributes and eventually runs out of other people’s money, then communism steps in and destroys (and kills). History repeats itself.

  13. A clumsy attempt to ensure their political base does not get too hungry before the December election. Quickly redacted. You have how wonder how much the producers can endure before they just give up. Emigrate and leave the entire mess behind. Closely followed the high ranking government officials when the final shipstorm hits. Perhaps end up living in the same Panamanian guarded communities; spitting on each other when they encounter.

  14. Welcome back Rachael!
    Great article as usual.

    One little comment, and this is becoming a personal pet peeve of mine:

    “this informal job (bachqueros) that fuels inflation, speculation and scarcity”

    Bachaqueros do not cause inflation or scarcity, it is the other way around:
    – scarcity causes inflation
    – regulated prices (and regulated distribution) causes “bachaquerism” and speculation (a good thing).
    – regulated prices causes scarcity

    In other words it is the regulated low price that causes the higher price.
    regulated low price -> scarcity -> high price.
    regulated low price & scarcity – > bachaquerism.

    The prices do not go up because the bachaqueros decree it, they go up because the CONSUMERS DEMAND IT. The bachaqueros just serve that demand.

    I consider this very important because in this game most people can’t seem to recognize who is the bad guy. They identify the bachaquero as the bad guy and the low price as the good guy. The opposite is true. It is so counter-intuitive because everyone loves a low price, so it must be a good thing and everyone hates a high price so the bachaquero that sells at the high price must be the bad guy.

    To those that think bachaqueros are bad, I say do not buy from them, if you do then you are the one raising the price not them. But also do not buy at the regulated low price anymore than you strictly need, (and do not buy for someone else) because you would be fueling the scarcity.

  15. Good article, Rachelle. Some thoughts: I doubt that the new Govt. food/basics restrictions will be turned back much–a nearby area independent SM just closed its doors yesterday, after 30 years, because of an increasing lack of basic goods to sell, after suffering this for some time. Scarcity is much, much worse in the Interior of the Country. The logical post-Election extension of this increasingly-tightening basic goods/dollars situation is the Cuban food rationing booklet–the Govt.-voting Pueblo gets FREE basic foodstuffs, in limited quantities, in exchange for their grateful vote. Meanwhile, bachaqueo will continue to flourish, no matter what the iteration of the current distribution system, and it has recently borne a new version-paying Bs. 300/more to those who hold a place for you in hours-long lines. And, if anyone were to doubt the true Communist intentions of the Regime, a family home was just visited for the umpteenth time (not allowed in, of course) over the past 10 years by the INE for a “socio-economic” study to find out the number of people/rooms/etc. in the home–the same thing done by the CubansAllende decades ago–give private homes to grateful Pueblo voters in exchange for their vote (a Chilean neighbor had to leave Allende’s Chile, con una mano adelante y una atras, after having to accept street people (drug addicts/prostitutes-her words) to live in her home). And, a Cuban friend’s home was turned into a youth hostal.

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