The Truth Behind Shortages in Venezuela

January 15, 2016

The shortages are deliberately caused primarily by opposition sectors and private enterprises in order to cause destabilization.

A warehouse, belonging to a company with links to the opposition, full of essential items was discovered in the western state of Zulia

A warehouse, belonging to a company with links to the opposition, full of essential items was discovered in the western state of Zulia

Corporate media outlets throughout the world have worked diligently to portray Venezuela as a country in the midst of an economic crisis. These outlets point to the shortages of basic goods in stores and the lines that sometimes occur for some products as evidence of this so-called crisis.

Yet, these shortages appear to be part of a concerted action by members of the opposition to remove the democratically-elected government from power.

Venezuelan President Nicolas Maduro revealed Wednesday a plot by opposition figures to take advantage of the lines to sow chaos and violence in the country. The events taking place in Venezuela today are eerily similar to those in Chile before the 1973 coup.

Shortages: What is Really Happening?

For about two years, roughly since former President Hugo Chavez was hospitalized, there have been regular shortages of basic products such as milk, sugar, corn flour, and personal hygiene items. These products would be available on the shelves for a time but then disappear. Before elections, there would also be such shortages, but currently the situation has lasted longer. However, in this case, as in previous cases, while milk is hard to find, products derived from milk such as yogurt or cheese, are widely available.

The products also become scarce during other “strategic” times. From July to October of 2014 there were more than 9,000 registered cases of chikungunya in Venezuela, a virus spread by mosquitoes. Although there is no cure, its symptoms are often treated with acetaminophen (paracetamol), which helps relieve fever and discomfort. During this same period, acetaminophen was unavailable in stores. Insect repellent and insecticide also disappeared from the shelves.

Which Products Suffer from Scarcity?

In Venezuela, the price of basic goods is regulated by the government, a routine practice in developing countries in order to ensure the population can afford essential items. The Venezuelan government introduced broader price controls in 2013 after it was revealed that vendors were selling many other goods at upwards of 200 percent above the actual cost.

When Chavez died, and then new presidential elections were called, scarcity increased. Rice, a regulated product, became difficult to find, while flavored rice was easily found. Regulated pasta – a product not previously regularly scarce, as cooking oil and milk have been – became difficult to find, while luxury, imported pasta was still available. This was the case with many regulated products, such as tuna and coffee.

For vendors, it became more profitable to sell the derived product than the basic good and if basic goods could not be found, then consumers would be forced to buy the more expensive option.

Who Controls Production?

Private enterprises control approximately 70 percent of production within Venezuela. As a group, those running these private enterprises have been historically opposed to the Venezuelan socialist model. These businesses are represented by Fedecamaras and Consecomercio, which both actively supported the failed 2002 coup against the late Venezuelan President, Chavez. In fact, it was the head of Fedecamaras, Pedro Carmona Estanga, who briefly “occupied” the presidency after the coup.

Corporate media broadcast images of Venezuelans waiting in long lines to purchase goods in order to slander the Venezuelan government, claiming that government policies and regulation are to blame for the shortages. Much of this coverage fails to analyze the causes of the shortages, nor do they acknowledge that since the Bolivarian revolution began more low-income and working-class Venezuelans can afford goods than ever before. Unemployment in Venezuela is at 5.9 percent – the lowest in 30 years – while in the last 15 years, there have been 25 instances of increases in wages and pensions.

Shortages or Hoarding?

Coverage in international media also suggests that the shortages being experienced by Venezuelans are due to a lack of production of basic goods, however little attention is given to the cases where officials uncover the massive hoarding operations.

In 2014, more than 28,000 tons of food that were to be sold as contraband were seized. In January 2015 the Herrera Company was found hoarding one ton of food and basic goods in one warehouse alone. At a separate location, this same company was found to have been hoarding essential goods for 45 days.

Spanish economist and the Director of the Strategic Latin American Geopolitical Center Alfredo Serrano explained that under the Bolivarian revolution, initiated by former President Chavez and continued by his successor Nicolas Maduro, consumption became democratized. Venezuelans can now afford to purchase more than just basic goods – they can now purchase industrial products and electronics among other things.

However, as mentioned previously, the majority of food production is controlled by private enterprises, giving them control over what is and is not available in stores. State-produced products, because of overall shortages, are bought up as soon as they appear, and quickly become scarce. This situation places these enterprises into a position where they project themselves as indispensable, which puts them in the position to be able to engage in an “economic war” against the government. Venezuelans are made to think the government is to blame for the shortages.

Private enterprises closely aligned with the opposition in Venezuela, using the power at its disposal to put pressure on the government and create social tension in order to ripen conditions for plots to oust the democratically-elected government.

Source: teleSur