CARACAS: Venezuela has opened the year 2015 with one of its worst ever economic crises. With the fall in oil prices since the last quarter of 2014, the country is short of hard currency and is having to limit its imports.
Record inflation, shortages and contraband have become part of everyday life for its inhabitants.
A woman rests while waiting to enter a shop to try to buy detergent and other hard-to-come-by basic goods.
In Chichiriviche, a small coastal town, word travels fast. The local Chinese supermarket has received soap. A long queue is quick to form in front of the shop. The shutter is closed and a custodian is standing guard. Notes are exchanged for bars of soap through the grille.
“There hasn’t been any soap for months,” explains María, who has come with her daughter to be able to buy a double ration.
Within minutes, the shopkeeper announces that the stock has sold out. Not far away, another queue is forming in front of the pharmacy. A group of people scurry towards it. The queue is for nappies.
The main basic good shortages include powdered milk, nappies, toilet paper, detergent and disinfectant. Supermarket shelves are either completely empty or stacked with a disproportionate amount of the same product.
“We’re not dying of hunger here, despite what is being said abroad. And we can find what we want on the black market, but everything is more expensive and it is exacerbating the economic problems,” explains Eduardo.
Since January 2014, the Law on Fair Prices has been regulating the retail price of a range of products. The same law forbids businesses from making over 30 per cent profit on the sale of a product. This economic regulation, in addition to the nationalisation policy, has led to a substantial fall in production.
“Heads of companies failing to respect the price imposed by the state for all basic goods risk expropriation or imprisonment. Businesses are being held by the throat. The company I work for produces compote, among other things. We have to sell our jar of compote for VEF6 (US$1), even though it costs around VEF20 (US$3) to produce. It’s just not possible. A company has to be able to pay its employees at least!” says Virginia, employed at a subsidiary of the multinational Nestlé in Valencia in northern Venezuela.
Price regulation has led to another phenomenon, contraband. The goods sold at a low price in Venezuela are resold for at least triple the amount in the neighbouring countries.
Petrol is a prime example. A full tank of 60 litres costs less than VEF5 – less than a dollar, a price verging on the indecent, which some have decided to profit from.
These petrol, toilet paper, shampoo or medicine smugglers are nicknamed bachacos, the name for leaf-cutter ants. They are queue professionals. It is a lucrative business, with goods being bought at regulated prices then resold on the black market at prices based on the parallel exchange rate. As whilst the US dollar is officially worth VEF6.3 in Venezuela, in the street it is exchanged for over VEF185.
Nicolás Maduro and his government have denounced that an “economic war” is being waged by the United States from the outside and by the bourgeoisie and the opposition on the inside.
Fresh riots are feared, like those seen at the beginning of 2014.
What started out as popular protests degenerated into acts of violence and were presented by the government as an attempt to destabilise Venezuela.
