Photo: Efecto Cocuyo, retrieved.

“I’m gonna close up shop now and what little stock I have I’m going to put in storage, so I can reopen in January,” says José Suárez, bracing for a darker future. Providers told him they won’t keep sending him dry merchandise because they couldn’t import enough.

Closing his liquor store/thrift shop earlier this month, he placed a sign at the front: “Collective leave.”

This sight is in today’s downtown Caracas and the Sabana Grande Boulevard, a classic Venezuelan hub if you’re looking for holiday gifts. Today, people walk by in crestfallen groups by forlorn stores, a Dickensian postcard of socialist heartbreak. “People leave the same way they came in,” a shopkeeper says. “There’s no movement, just bad business.”

Instead of songs and sales at great value, we have lines outside the stores “fiscalized” by the government, full of hopefuls trying to buy shoes with less than Bs.S. 2,000. People hug themselves on one of our coldest Decembers in recent memory, with all conversations dancing around the same thing: we wanted Christmas, and we got queues.

The Venezuelan economy is a risky environment, hostile to importers, with a government that intimidates and forces shop owners to sell products below their cost.

“I imported merchandise worth $10,000,” says Ismael Ramos, who runs a shoe store in downtown Caracas. “When I recovered the investment in bolivars, I couldn’t replenish the stocks. I buy with black market dollar, I’ve never been to a DICOM auction. It’s very hard to replenish inventories like I used to.”

Ramos’s showcases are half-empty. The vacant spaces are filled with decorative shoe boxes, to try and give the impression of a living store.

“The Chamber of Commerce of La Guaira estimates a decline of over 89% compared to 2017, due to recession and the lack of foreign currency,” says Consecomercio chairwoman, María Carolina Uzcátegui.

We wanted Christmas, and we got queues.

Meaning, not many business owners got into the official auctions, and the gap set by the black market dollar (which defines transactions in the actual Venezuelan market) and hyperinflation starve any market. According to estimates by the Economic Commission for Latin America and the Caribbean (Cepal) presented in their report on the region’s International Trade Outlook for 2017, Venezuelan imports dropped by 21.8% compared to 2016.

Juan Pablo Olalquiaga, chairman of the Venezuelan Federation of Industry, explains reality through numbers: according to a survey to the industrial sector, 71% of companies say their investments decreased; 26% said that they kept their levels and only 3% say theirs increased.

52% of respondents say they won’t make any more investments for the remainder of 2018, while 88% of business owners say the order backlog dropped; 72% say they can only guarantee work for the coming three months, a figure that plummets to less than a month for the small industry.

The imports regime

A week ago, when the ghost of shop crackdowns was expected to return, the government launched its Merry Christmas Plan.

Nine million pieces of clothing and shoes were spread across the national territory. Stores in downtown Caracas and Sabana Grande got single-model socks, underwear, trousers, sheets, sportswear, blouses and shoes.

Because, see, the regime didn’t raid stores as in previous years, they just brought cheaper merchandise that leaves no earnings, imposing another flavor of disloyal competition on the market.

“This is an agreement made with shopkeepers to guarantee their inventory,” says a state official pasting stickers on the doors of one of the few department stores still active in the country. “This store complies with the policies of access and services implemented by the bolivarian government,” the sticker reads.

The Venezuelan economy is a risky environment, hostile to importers, with a government that intimidates and forces shop owners to sell products below their cost.

For María Carolina Uzcátegui, the operation isn’t just that. “It’s like what happened in the Nazi era, when dissident homes and stores were marked so the state gained full economic control. There won’t be any changes without a radical policy change, and if hyperinflation continues to be out of control. There’s a 25% increase in monetary mass printing; the National Assembly estimated inflation for November at 140% and, by the end of the tax exercise this year, the annual rate could be 2,000,000%.”

If there are no import bump for the Christmas season, the most important of the year, then 2019, according to Uzcátegui, will start with severe shortages.

“The government would have to do the opposite of what they’ve been doing,” says Uzcátegui, meaning the shutdown of exchange and price controls, the encouragement of national production in the public and private areas, and a frank discussion with the business guilds to find agreements that set a new course for the country. None of that is likely to happen any time soon.

“Merry Christmas? what right you have to be merry? You’re poor enough!” wrote Dickens in 1843, and how his words sting today for store owners with no merchandise, and buyers with no money, in a country desperate for a hope it cannot afford.

Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.

16 COMMENTS

  1. Some estimate 20/+% of Ven. retail outlets closed permanently after the end of 2017, and probably some 20/+% more will close after the end of 2018. I can’t believe that there are those (economists/AN/gadflies) that think band-aids/dialogue/Regime electoral promises could ever possibly solve Venezuela’s apocalypse.

  2. “Exports for this year plummeted,” says Consecomercio chairwoman, María Carolina Uzcátegui. “The Chamber of Commerce of La Guaira estimates a decline of over 89% compared to 2017, due to recession and the lack of foreign currency.”

    Is this a typo? If you delete “Exports,” and insert, “Consumer goods imports,” then the quote makes sense.

    • Looks like nonsense in the echo chamber. And “exports” apart from oil, were tiny in 2017 so a large percentage drop would be meaningless.

  3. I had to stop reading and just had to post before I go on reading.

    “with all conversations dancing around the same thing: we wanted Christmas”
    Mind boggling to me, I mean I could write a list so long it wouldn’t be appropriate it would be so long. But people in that line just wanted Christmas ffs, now is that to much to ask for … really?

    • Chavismo defies reason all the time.

      If you were to apply reason to the path Chavismo has taken to bring Venezuela to its current situation you would not be blamed to believe that they should have lost power, yet they remain.

      Reason indicates that they have now consolidated power to become the latest bastion of Stalinistic Communism. I hope reason is defied again in good Chavista style.

      • If one pitched this 20 year story back in 1999 as a movie script in Hollywood you wouldn’t get it sold, not even as an obscure independent production.

        • And if you submitted a paper in 1999 explaining the socioeconomic fallacies of XXI Socialism, it would never get published, and you would NOT get invited to the next faculty wine and cheese party.

    • The Chavistas don’t care about the people, nor being “beloved” any longer. They care about retaining their power.

      I wouldn’t doubt for a second that if the Castroists were to tell the Venezuelan brothers that the next year would see them remain in power and the people to suffer more, providing they eat a bucket of shit, Nicky Delcy and Diosdado would say, “Got a spoon?”

  4. There are still open shops in Sabana Grande? Damn! That’s resiliency right there, unless they are Enchufados of course. I thought a pair of shoes = 158 minimum monthly salaries, go figure..

    Y mi Pernil??

    • Every time I went to VZ and Sabana Grande…50, 60 times over three years…I had to buy a pair of shoes. (I’m talking 1988 to 1991.)

      And I don’t give a crap about shoes. I’m a slob.

      But the stuff was so nice, inexpensive, and always in my size that I couldn’t resist.

      Were those all made in VZ? Or imported from Italy?

  5. How about Isla Maragaria back in the early 80s. It was like the best outlet shop in the world – and I’ve been all over creation. I could and did buy fancy Euro brand stuff for crazy cheap prices. Could spend three or four hundred bucks and dress like a hidalgo for the next two years. Must have had ten pair of leather shoes back then, all bought either in El Tigre or thereabouts, or in Margarita. Still have a great wool sweater I bought in Merida. There were quality goods back in the day, for a song.

    • We spent half our honeymoon on there. Awesome time.

      The other half of our honeymoon was spent in Acapulco. Hard to say which place has descended into more chaos.

LEAVE A REPLY

Please enter your comment!
Please enter your name here