Monday, February 15, 2016

Venezuela Is Out of Food! Who's Next?

The Human Cost of Venezuela’s Capital Control Nightmare
Currency Restrictions Only Make it Harder for Venezuelans to Flee Misery
José Niño
February 17, 2016
Only Venezuelans with foreign bank accounts in dollars or skilled professionals can get by abroad. (Monedas de Venezuela)
While their country is experiencing the worst economic crisis in its history, many Venezuelan professionals have had to look outside their borders for better opportunities.
Recent records show that 1.5 million Venezuelans have left the country since 1999. This number has only kept growing as Venezuela’s economy spirals out of control.
Many Venezuelans aspire to leave the country since the highly politicized Central Bank has completely devalued the national currency, the bolivar, with its inflationary policies.
But those seeking economic exile must also face capital and currency controls in order to leave in the first place. First implemented by Hugo Chávez in 2003, these measures were used to stem the capital flight caused by the 2002 oil workers’ strike.
These capital controls started out as measures that targeted the rich in order to supposedly reign in their greed and their ability to move vast sums of capital abroad.
History, however, has shown that regulations that start out solely targeting the rich eventually turn into all-encompassing controls that affect all social classes.
In Venezuela, currency controls have recently evolved into travel allowances that limit the amount of foreign currency that citizens can use on their foreign travels.
These limits have varied from year to to year but, as of 2015, Venezuelans can only take US$2000 with them on trips abroad. Additionally, travelers heading to the United States will also have reduced cash quotas of $700 at their disposal.
Naturally, this represents a major obstacle for many Venezuelans whose trust in the dollar is much higher than the devalued bolivar. In effect, these measures serve as a “barrier of exit” for many Venezuelans.
Only skilled professionals or those with foreign bank deposits in dollars can get by abroad. Professionals must still brave months of job searches with the looming threat of their paltry dollar allowance running out during this time frame.
Venezuela’s poor, on the other hand, unfortunately do not enjoy these advantages and are effectively trapped inside the country. Unsurprisingly, 90 percent of Venezuelans who have fled after the Bolivarian Revolution are university educated professionals, with a significant minority belonging to a higher income segment.
So although the government implemented currency controls in order to prevent capital flight, there was a more sinister motive behind the measure: the control of the Venezuelan populace, especially its ability to move in and out of the country.
The recent flight of Venezuelan professionals is essentially a brain drain; some of the country’s most talented individuals must search for greener pastures abroad due to the unfavorable economic and political circumstances in their country of origin.
This case is all too familiar in Latin American history. In recent decades, Colombians, Cubans, Guatemalans, and Salvadorans have had to leave their countries en masse due to unfavorable economical, political, or social circumstances.
Contrary to popular belief, “brain drains” may actually yield net benefits to the the exiles’ countries of origin. Michael A. Clemens, a Senior Fellow at the Center for Global Development (CGD), notes that migrants have the ability to “transfer money, skills, and even democratic ideas” to their native countries.
However, these potential benefits may never come into fruition if governments decide to impose limits on migration.
In a globalized era in which travel is becoming increasingly affordable, citizens have more power than ever to forge their destiny wherever they see fit.
Ideally, nation states in a globalized world should be competing with each other in order to attract the most talented workers across the globe. In the 21st century, no citizen should be treated as a serf who is bound and shackled to his homeland.
Sadly, governments that impose primitive mechanisms of control such as Venezuela’s have different ideas.
The true culprit of Venezuela’s economic tragedy is the lack of respect for economic freedom during the past 50 years. For Venezuela to overcome this dark chapter in its history, it must abandon both the socialism of the present and the soft-socialism of its not too distant past.
Only a system of capitalism based on the rule of law and the respect for individual and economic liberties can correct the policy flaws of the past 50 years.
José Niño is a student based Santiago, Chile, and a PanAm Post intern. A citizen of the world, he has lived in Venezuela, Colombia, and the United States and is a former member of Students For Liberty’s Executive Board.
Follow @JoseAlNino
As Socialist Economy Implodes, Venezuela Creates Army-Run Oil Firm
President Maduro Hands Over New State Company to the Military amid Criticism from Own Supporters
Sabrina Martín
February 16, 2016
As if the Venezuelan government didn’t have too much on its plate, it has decided to set up a new state-owned oil firm — and give it to the army.
On Wednesday, February 10, Venezuela’s Official Gazette quietly announced the creation of the Anonymous Military Corporation of Mining, Oil, and Gas Industries (Camimpeg). It carried President Nicolás Maduro’s signature and that of all his ministers.
Operating alongside PDVSA, Venezuela’s main oil exporter, Camimpeg will be tasked with repairing and maintaining oil wells, administering oil drilling, importing, exporting, distributing, and selling chemical products for the mining sector. The company will also be in charge of managing sea transportation and building infrastructure.
The Venezuelan state is the new company’s majority shareholder and it follows the executive’s guidelines. It will be run by a board composed of five members, to be appointed by Vladimir Padrino López, Venezuela’s Defense Minister.
The company’s creation has been met with criticism, even within the ruling socialist party.
A critical columnist in Aporrea, a Chavista propaganda outlet, labelled the move as a “quiet coup d’état” against PDVSA by Padrino López. The article attacks the Maduro administration’s “complicity and submission” for allowing the creation of a parallel oil firm.
The article assures that Camimpeg will have an autonomous budget, which means it will not depend on the Ministry of Oil and Mining. At the same time, it will not be subject to Congress’s authority to evaluate public tenders.
According to the Aporrea article, the new oil concern will operate above the law since the government is leaving “the country’s entire economic apparatus” in the hands of the military.
Maduro’s Appeasement to the Army?
José Toro Hardy, an economist and former director of PDVSA, told the PanAm Post that the Venezuelan army has no experience in the oil and mining sector, so he doesn’t see a valid reason for creating Camimpeg.
“We all hold the same fear, that it’s some kind of offer or tribute to the military who are loyal to the regime … It’s curious that the firm not only operates simultaneously [with PDVSA], but that it has also been entrusted to the army,” Toro said.
Suspicions have arisen, he explained, because  there is no training in managing petroleum or mining ventures within the Venezuelan army.
It is still unknown whether PDVSA, which is near bankrumptcy, will continue operating or, if it does, in what capacity.

Left: Defense Minister Vladimir Padrino López will appoint Camimpeg’s directors. (Aporrea)

“I have no doubt that PDVSA is financially and productively damaged … it should be producing over 5 million oil barrels a day but the current output is not even half of that,” Toro explained.
“Nowadays, we’re not producing the gasoline that we need. Crude oil drilling plants are not operating, and we’re importing crude oil to be able to meet international deals … PDVSA is the example of a true disaster,” he said.
Toro argued that the Venezuelan economy is in no shape to create another corporation like Camimpeg, because “you need management skills that the army doesn’t have. You also need investment, which the state will supposedly provide, but the state doesn’t have anything to contribute.”
While run by the Venezuelan military, where corruption is notorious, Camimpeg will not improve Venezuela’s reputation abroad, Toro said. Currently, the state-run oil giant PDVSA is under investigation for money laundering in the United States.
Translated by Daniel Duarte.

Venezuela Food Crisis - What It Means For You
Published on Aug 19, 2015
Venezuela Food Crisis and Food Shortages Lines of Hope - citizens of Venezuela are standing for hours in long lines, hoping if they make it into a store with some food available. Venezuelans are suffering with a food crisis with shortages of chicken, milk, coffee, cooking oil, cornmeal, rice, sugar, detergent, soap, and toilet paper. These food shortages have worsened over the last several years. No food is on the shelves in stores even if shoppers make it inside. Are you prepared for such an ordeal in our country? Socialism, Communism, and corruption on all levels leave people with daily hardships. Are you prepared to battle mobs to find basic necessities? Are you ready for the military to chase you if you have food? That is happening in Venezuela now. Don't prepare to fight for food like people in Venezuela. Stock up on things you need while they are readily available.

Even Rich Venezuelans Can't Find Food
Published on Mar 7, 2015
March 07, 2015 - CNN's Maggie Lake reports on the chaos in Venezuela as the cost of living skyrockets following plunging oil prices.
Open Letter to Venezuelan President Maduro: Please Resign
The Best Thing You Can Do Is Get Out of the Way of Venezuela's Recovery
Thabata Molina
February 15, 2016
Mr. President of Venezuela, Nicolás Maduro:

It is still unclear to me whether you are Venezuelan or not, but assuming you were born in this country, I’d like to ask you, in the name of millions who are suffering under the current economic crisis, to step down as president.
As a Venezuelan, I have thousands of reasons to demand your resignation. My country has reached rock bottom, and it’s time to start over. The “revolution” you are commanding has destroyed the Venezuelan identity. I can’t stand one more day of watching people beg for basic medicines. This is not a luxury. People’s lives at at risk. Accept it, you must resign.
I refuse to tolerate your mockery of my people. You cynically tell them that life in Venezuela is good, but the truth is that most people are hungry and in need, while you and your cronies shamelessly squander our money on luxuries.
You only need a tiny bit of dignity to acknowledge that you are not fit to run a country. Nowadays, you are the country’s most serious problem.
Chavismo transformed Venezuela, although not into a sophisticated country. It turned Venezuela into a prison where mediocrity is promoted, ignorance is extolled, dissidence is punished, and reality is ignored.
You are at the helm, but not because you’re the most capable person around. Your administration has proved that the contrary is the case countless times. You are in charge not due to your own merit, but because Chavismo had no other choice when its leader died in 2013.
No one believes the story that all Venezuelans lead happy lives in an alleged state of equality, which certainly does not apply to your cronies. I’m absolutely sure than not even you believe the excuse that thousands of  “enemies” are to blame for our country’s problems.
This is why I feel contempt for those who lie to people by saying that “imperialism” is to blame for the lack of food. That “El Niño” is to blame for the shortage of water and electricity; that right-wingers are to blame for inflation; that paramilitary groups are the only ones causing violence; that we can’t make ends meet “because people are eating too much.”
Stop lying and quit already.
Take responsibility and have some humility. Stop manipulating your ignorant followers and put an end to this farce that is harming too many people. It’s not just the 5 million Chavistas who voted for you who are facing very difficult times. Each of Venezuela’s 30 million citizens  deserves a normal country, where most problems, which are unavoidable like in any other nation, can be overcome with hard work.
In every country, it’s common for citizens to mock their politicians. And in Venezuela, you are the laughing stock, except that politicians themselves are mocking citizens with every event, speech, and show.
A country where you have to wait in line to buy food, where people have their fingerprints checked like criminals just to be able to buy groceries, is not normal. A place where you can only go to the supermarket on certain days depending on your national ID number is not a normal country. You and your friends certainly don’t go through these hardships, so why must the rest of Venezuelans go through this humiliation?
Venezuelans won’t take to the streets and risk their lives for your resignation, because we face enough violence every day with the rising rates of homicides, theft, and looting. There is restlessness and generalized chaos. Let’s not forget the high levels impunity, which has been your greatest ally. Your immediate resignation, however, will help your country immeasurably.
We have drones and weapons but no medicine and no food. There are criminals who terrorize the population but no authorities to control them. I wish you made a greater effort to tackle the country’s problems than to target those who think differently. After 17 years of Chavismo, it’s an insult to tell Venezuelans that it’s time to change the economic model and stop relying on oil exports. Admit it, you stole it all. Stop yelling, and act.
Arrogance could end up costing you dearly. Clinging to power just so you can keep telling the rest of the world that you’re president is selfish when so many people are suffering. Not only the sick suffer because of the lack of medicine; mothers suffer when they can’t get any milk for their children, fathers suffer when they can’t make ends meet, the young suffer when they see no hope for progress anywhere in the country.
Your followers live inside a bubble that one day will burst, because the people will only tolerate so much harm. We’ve had enough of your government’s restrictions on the most basic freedoms, such as the right to choose what to eat, what to dress, what to read or think. Who do you think you are to curtail so many lives? If you think about it, you will see that it is best to resign.
Stop playing a strongman character and be human. Your yelling, threats, and insults are of no use to address people’s hunger or illnesses. Posturing does not pay bills and insults don’t cure cancer.
Maybe it is you and your cronies who start rumors to keep the population in fear. Leave malice behind, you have played enough with Venezuelans’ hopes.
At this point, I care little if you were truly born here. But if you have ever loved Venezuela, please resign.
Translated by Daniel Duarte.
Venezuela Is Out of Food: Here’s What an Economic Collapse Really Looks Like
By Daisy Luther
February 14, 2016
Venezuela is out of food.
After several years of long lines, rationing, and shortages, the socialist country does not have enough food to feed its population, and the opposition government has declared a “nutritional emergency.” This is just the most recent nail in the beleaguered country’s slow, painful economic collapse.
Many people expect an economic collapse to be shocking, instant, and dramatic but, really, it’s far more gradual than that. It looks like empty shelves, long lines, desperate government officials trying to cover their tushes, and hungry people. For the past two years, I’ve been following the situation in Venezuela as each shocking event has unfolded. Americans who feel that our country would be better served by a socialist government would be wise to take note of this timeline of the collapse.
A quick review: Why Venezuela Is Out of Food
In 2013, many began to suspect that the outlook for Venezuela was grim when prepping became illegal.  The Attorney General of Venezuela, Luisa Ortega Díaz, called on prosecutors to target people who are “hoarding” basic staples with serious sanctions.
Shortly thereafter, grocery stores instituted a fingerprint registry to purchase food and supplies. Families had to register and were allotted a certain amount of supplies to prevent “hoarding.”
Then, just over a year ago, it became even more apparent that the country was falling when long lines for basic necessities such as laundry soap, diapers, and food became the norm rather than the exception. Thousands of people were standing in line for 5-6 hours in the hopes that they would be able to purchase a few much-needed items.
Shortly after the story broke to the rest of the world, the propaganda machine shifted into high gear.  As the government began to ration electricity, it was announced that this was not due to economic reasons at all, but instead was a measure of their great concern for the environment.
As the situation continued to devolve, farmers in Venezuela were forced to hand over their crops last summer. They assumed control of essential goods like food, and began putting retail outlets out of business. Then, once they had control of the sales outlets, they began forcing farmers and food manufacturers to sell anywhere from 30-100% of their products to the state at the price the state opted to pay, as opposed to stores and supermarkets.
But that wasn’t enough to keep the population fed. (Isn’t it astonishing how much less motivated people are to produce food and supplies when they are no longer allowed to benefit from their hard work? Historically, collectivism and farming have never gone successfully hand in hand.) This January, the government told citizens that they would need to produce their own food. The Ministry of Urban Farming was created to oversee this. While self-reliance sounds great, it isn’t so great in Venezuela. Just so the urban farmers don’t get too self-reliant, a registry of the crops and livestock will be required. (And obviously, they’ve already proven that they have no issue forcing farmers to hand over what they’ve produced.)
Now, it looks like all of the socialist measures and forced food production haven’t been enough to keep the people of Venezuela fed. The country is in so much trouble now that it isn’t possible to cover it up with propaganda.
According to, lawmakers have learned nothing.
Socialist legislators are hoping to manipulate the initiative in the other direction, and use it to expand government control of private food enterprises. Legislator Héctor Rodríguez has insisted that the economic emergency “does absolutely nothing,” and the government should impose itself on private enterprises. Another socialist legislator, Ricardo Molina, is calling for the government to expropriate Polar, Venezuela’s largest private food corporation: “we have to intervene on private sector enterprises.”
Venezuela previously forced a Polar food distribution center in Caracas to shut down in July, putting 12,000 tons of food, six million liters of soft drinks, and 2,000 jobs at risk.
And now, the announcement of the “nutritional emergency” makes it official. Venezuela is out of food, and it’s only a matter of time before Venezuelans are quite literally starving due to a long series of terrible decisions by their leaders.
Prep before it happens
It’s essential to note as this all plays out that there is little people can do now to rectify their situations. If they aren’t already quietly prepared, they are completely at the mercy of their socialist government.  It is absolutely vital to put back supplies well before the general public is aware that a crisis is pending.
As well, consider the fact that many folks here believe that a socialist government is exactly what our country needs. They eagerly lap up the promises of “free education” and “free healthcare.” They warmly embrace a presidential candidate who is an unabashed socialist. It absolutely astonishes me. They’d be well-advised to pay attention to how well the freebies have worked out in Venezuela. Socialism is not a sustainable economic model, something that has been proven time and time again, much to the detriment of the victims of the misguided notions.
The game pieces here are already lined up to control the American people should our economic situation continue to worsen. For example, there are already laws in place to “prevent hoarding.” Remember a few years ago when President Obama signed an executive order that gives the federal government authority over every resource and infrastructure element in the United States?
There are a lot of uncomfortable parallels that can be drawn between America’s financial situation and the disaster in Venezuela, and one thing is clear: self-sufficiency is the only way to protect your family. Even if you haven’t really begun to prepare, there’s still time to become more self-reliant. Here are some steps you should consider:
Build your pantry: Start purchasing a few extra things every week to build up a food supply to see you through some rough spots. Create a pantry full of healthful, nutritious foods for your family, even if you’re on a budget. (Click HERE to learn how.)
Learn to grow/raise your own food: If you aren’t already growing some of your own food, it’s time to start. While many people believe that they can easily begin farming after the SHTF, it’s not always quite like you may have imagined. Work out the bugs now so that when you are truly reliant on what you raise, you’ll be more likely to be successful. This can be done even on a lot in town – click HERE to learn how.
Stock up on non-food supplies too: It isn’t just food that is in short supply in Venezuela. Be sure you stock up on other necessities too. Here’s a list of non-food items you can stockpile. And if you don’t have a huge budget, don’t worry. Here’s another list of items you can get very inexpensively.
Purchase an emergency food supply: Stock up on long-term storable food that you can stash away. These are the supplies you will rely on if the stores close, and purchasing buckets is the very fastest way to build a food supply when time is of the essence. They are packaged so that you can put them in a storage area and forget them until the day comes that you need them. Add a bucket or two every month to build your supply on a budget, or purchase in quantity to save money and have your supply instantly.
It is vital to practice OPSEC (Operational Security) by keeping your preparedness-related activities on the down low.  Preparedness and self-sufficiency author Tess Pennington warns that in a crisis situation, things you said months or years ago could come back to haunt you.
A person should think twice about telling others about any prepping investments they have made.  If a SHTF scenario occurred, anything said previously can be used against that prepper.  For example, if you tell your neighbor you have silver coins stashed away, if times were desperate enough, that neighbor could turn on you.  Keeping quiet about what one does is second nature to some.  But for others that are new to the idea of prepping, they do not see the whole SHTF picture.  If one person tells another about their preps, one person could tell another person about what preps their neighbor has.  Then, the word spreads throughout; especially when a severe situation occurs.  People will remember what you have told them, and come to you for help (if they are unprepared).  Helping a neighbor or family member in need is a noble deed.  However, those preparedness items are an investment for you and your family; and therefore, no one outside of the family should know what you have (unless you want that person to know). (source)
As people become more desperate, they behave far differently than they would in normal circumstances. You have to be prepared for the day when you might have to defend your home, family and supplies. When an economic disaster strikes, the one thing you can count on from the government is that they will not be prioritizing you and your family. In a situation like the one in Venezuela, you will be completely on your own at best. At worst, your supplies will be targeted “for the greater good.”   Maintain your freedom by becoming quietly self-sufficient.
Please feel free to share any information from this site in part or in full, leaving all links intact, giving credit to the author and including a link to this website and the following bio. Daisy Luther lives on a small organic homestead in Northern California.  She is the author of The Organic Canner,  The Pantry Primer: A Prepper’s Guide to Whole Food on a Half-Price Budget, and The Prepper’s Water Survival Guide: Harvest, Treat, and Store Your Most Vital Resource. On her website, The Organic Prepper, Daisy uses her background in alternative journalism to provide a unique perspective on health and preparedness, and offers a path of rational anarchy against a system that will leave us broke, unhealthy, and enslaved if we comply.  Daisy’s articles are widely republished throughout alternative media. You can follow her on Facebook, Pinterest, and Twitter,.
In Venezuela, "Savage Suffering" Takes Hold Amid Frightening "Food Emergency"
Submitted by Tyler Durden
Venezuelan President Nicolas Maduro has been working on some “measures.
“Now that the economic emergency decree has validity, in the next few days I will activate a series of measures I had been working on,” he said Thursday, in a televised statement meant to address a “food emergency” declared by Congress.
The “validity” Maduro references comes from a high court ruling that gives the President expanded powers to tackle a deepening economic crisis that’s left hospitals without medicine and grocery stores bereft of food.
“The controversial move by the Supreme Court, which critics say is packed with supporters of Mr Maduro’s socialist government, potentially sets the scene for a bitter institutional crisis amid claims that the national assembly is being undermined,” FT notes, underscoring the extent to which opposition lawmakers - who in December won 99 of 167 seats that were up for grabs in what amounted to the worst defeat in history for Hugo Chavez’s leftist movement - feel as though last year’s election victory may have been a ruse designed to lend legitimacy to a system that is, and likely always will be, deeply undemocratic.
“This is a tyranny, which has been very successful in disguising as a democracy, and has even allowed itself to lose an election,” Moisés Naím, a former Venezuelan minister and fellow at the Carnegie Endowment for International Peace said.
Thanks to the Supreme Court decision, Maduro doesn’t need the assembly’s permission to intervene further in business, to allocate funds for imports, and to introduce new capital controls. The opposition is furious and says it will speed up efforts to usurp Maduro once and for all. "In the next few days we will have to present a concrete proposal for the departure of that national disgrace that is the government," opposition leader Henry Ramos told reporters on Friday.
"The Supreme Court of Justice has spoken, its word is holy and must be respected by all parts of society and all institutions," Maduro declared.
With inflation set to soar to over 700% this year, Venezuelans are struggling to persist in the world’s worst performing economy. “I hoped to buy toilet paper, rice, pasta,” 74-year-old Rosalba Castellano, told WSJ. “But you can’t find them.”
“The government is putting us through savage suffering,” she laments.

Of course Maduro blames this “savage suffering” on evil capitalists and the US, which he says is waging an economic war on the country.

In reality, mismanagement on an absurd scale including a rash of nationalizations, out of control spending, and price controls have shrunk the private sector and plunged the economy into outright chaos.

“It goes beyond the crime and economic deterioration,” Leonardo Briceno who spoke to WSJ and runs a Caracas public-relations company said. “It’s imagining a scenario where my daughter needs a medication and we can’t find it. That scares me the most.”

(Venezuelans wait in line to buy food in Caracas)

“The crisis is especially acute in what was once a centerpiece for the socialist country, its health-care system,” WSJ goes on to note. “The country’s leading trade group for drugstores says 90% of medicines are scarce,” and preventable deaths are on the rise. Here’s more:

On a recent day at the University Hospital of Maracaibo, in Venezuela’s second-largest city, patients lay on bare beds in rooms with dirty floors. There was no running water, medicine, cleaning supplies or food. Feces floated in the toilets. Medical staffers there said gang members roam the halls, forcing underpaid and harassed doctors to lock themselves in the offices to avoid assaults.

Venezuela used to export rice, coffee and meat. It now imports all three. It even imports its own bank notes, ordered from European firms and flown in on 747 jets.

The number of private companies in the country shrank by 20% between 2006 and 2014, according to Datanalisis. Multinationals such as Clorox Co. have simply left. Others including Ford Motor Co. and Oreo-maker Mondelez have written down the value of their local businesses to zero.

The crisis is felt not just in Venezuela’s teeming cities but in places like Toas, a tiny island of palm trees and crystalline waters in far western Venezuela, home to just 8,000 people.

Last December, thieves stole 15 miles of underwater power cable connecting the island to the mainland. The theft severed the island’s telephone connections and idled its water pumps.

Fisherman Genebraldo Chacin said his children haven’t bathed or gone to school since then, and they have been eating only one meal a day. His neighbors say the island is close to starvation.

Our food rots without electricity, and it’s sad because it’s so difficult to find food here,” said Mr. Chacin’s neighbor, Sasha Almarza. “When we are able to find any in the store, we eat it all the same day.”

And so on.

As we've documented extensively, Venezuela is staring down an imminent default, despite the fact that the country does in fact try to service its debt. As Barclays noted last month, the country will need to spend 90% of its oil revenue on debt payments assuming $32 crude. Obviously, that's not a tenable proposition.

(note that the headline inflation figure in the right pane is horribly understated)

Thanks to rising imports (as mentioned above) and falling oil sales, the CA deficit has worsened, forcing Caracas to liquidate assets to fund a budget deficit that's projected to hover near 20% of GDP for the foreseeable future.
"Such high inflation has a strong detrimental effect not only on real salaries, but also on income distribution, as the lowest income part of the population tends to have fewer alternatives to protect against inflation," Barclays warns. "This could increase social and political risks, making the current equilibrium increasingly unstable."
Of course there is no "current equilibrium." The opposition was already bound and determined to oust Maduro within six months and now, following the Supreme Court decision to grant him 60 days of emergency economic powers, Ramos says the timeframe for drawing up plans for the President's exit is now "days." Meanwhile, the public may have been unwilling to stage an outright rebellion with inflation at 200%, but at 720% it's difficult to see how things won't careen into outright social upheaval in the not so distant future. Especially once the country defaults and the public comes to realize just how wasteful the government is with what should be a vast store of national oil wealth.
As for what "measures" Maduro is considering to counter the officially declared "food emergency," we'll have to wait and see, but WSJ did give us a hint:
"In response to growing food shortages, Mr. Maduro last month created a Ministry for Urban Farming. He noted that he has 50 chickens in his own home."


Looters target Venezuelan food stores as shortages spark frustration

Fifty-six lootings and 76 attempts reported in the first half of 2015 as frustrated shoppers turn to shoving in lines and stealing goods

Reuters in Caracas

Friday 7 August 2015

Venezuelan supermarkets are increasingly being targeted by looters as lines and prolonged food shortages spark frustration in the nation struggling with an economic crisis.

Shoppers routinely spend hours in lines to buy consumer staples ranging from corn flour to laundry soap, turning lines into venues for shoving matches and frequent attempts to plunder shops.

The economic crisis has hit President Nicolás Maduro’s approval ratings and raised tension levels in the country.
People show numbers written on their arms with the order they should enter at the state-run Bicentenario supermarket in Maracaibo January 11, 2015.

Fifty-six lootings and 76 looting attempts took place in the first half of 2015, according to the Venezuelan Observatory of Social Conflict, which based the figures on media reports and testimony of observers around the country.

On Sunday a small crowd in the western city of San Cristobal pushed its way into the government-run Bicentenario supermarket to grab products after it had closed, leaving staff scratched and bruised, according to the store manager, Edward Perez.

“As we were closing, a group of 20 people unexpectedly started shouting insults at the government and the workers,” said Perez in a telephone interview.

Several looters were arrested after the fracas, which Perez blamed on “ultra-right-wing sectors of the opposition” seeking to sow violence.

Last Friday one man was killed and 60 were arrested in Ciudad Guayana in southern Venezuela after shops were looted.

The government did not respond to a request for comment on the lootings but Maduro calls the shortages and the unrest a product of an opposition-led “economic war”.

More frequent than these serious events are minor melees that ensue when delivery trucks arrive at stores carrying prized products such as chicken or milk.

But the combination of limited official information and exaggerated rumours propagated on Twitter often makes it difficult to distinguish between the two.
Lines have been noticeably longer since the start of the year and especially tense, after last Friday’s clash in Ciudad Guayana.
Josefa Bracho, a 70-year-old teacher in the central city of Barquisimeto, vows not to stand in any more supermarket lines. She was slashed in the thigh with a scalpel after a dispute in a line with women she believed were smugglers.
“We’d been in line for almost four hours when three women got in front of me,” said Bracho in a phone interview.
“I said, ‘What are you doing? Why are you cutting in line?’ Later one came by and cut my leg … standing in line means putting my life in danger.”
Lines are increasingly filled with smugglers who buy subsidised goods and resell them at a profit on the black market or in neighbouring Colombia, generating tension between resellers and those trying to stock their own kitchens.
“There’s no organisation, they treat you like an animal, they don’t respect anything,” said Carmen Neskowi, 49, who identified her profession as “standing in line,” in a queue outside a Caracas supermarket. “It’s an insult.”
Local food producers ranging from neighbourhood bakeries to an industrial pasta maker have halted or slowed operations for lack of raw materials or machine parts.
Obtaining low-cost food and medicine, once the hallmark of the Hugo Chávez era, has become a daily struggle.
The problems, however, have not spurred a broader wave of protests like those led by the opposition in early 2014 that left 43 people dead.
Supporters of the ruling Socialist party note the network of subsidised state-run grocery stores created by Chávez, and financed by plentiful oil revenue, helped reduce poverty and hunger during his 1999-2013 rule.
But the combination of dysfunctional currency controls, limiting Venezuela’s capacity to import, and the end of a decade-long oil boom has left Maduro’s government strapped for cash and struggling to maintain the largesse.
According to polls, his party is expected to do poorly in legislative elections later this year, its support hit by high inflation, the currency’s collapse and food shortages.

Leaked Government Study Reveals Extent of Shortage Crisis in Venezuela

Report Exposes "Economic War" as Fraud, Says Center for Documentation Director

Sabrina Martín

September 21, 2015

February 2014 was the last time the Venezuelan government released official figures concerning the lack of basic products in the country.

However, thanks to a leaked study conducted by the Office of the Vice President, Venezuelans are now learning their government’s own account of the shortage crisis.

The document, dated August 14 and released by local media on September 16, reveals that at least 15 food items and 26 cleaning and personal-care products are unavailable in Venezuelan stores. In most cases, the shortage rate surpasses 70 percent.

Although the document indicates that it is the 19th such study that the government has conducted in the country, it is the first to have been accessed by the press. Unlike other reports based on surveys and interviews, the data in the government’s report comes from direct observations in 312 establishments across 19 states.
The leaked charts confirm that at least 15 food items are virtually absent from market shelves. Pasteurized fruit juices are the least scarce (43 percent), while fruit compotes lead the shortage list (92 percent).

Furthermore, the study finds that 18 personal-care products are mostly unavailable to Venezuelans. Researchers, for example, could not locate baby diapers in 96 percent of the establishments observed, and only found toothpaste in 58 percent of those stores.

As for cleaning products, all eight of the items that researchers surveyed were found to be scarce in varying degrees. While laundry detergent remains the most widely available cleaning product, with a scarcity rate of 67 percent, dishwasher soap cannot be found in 88 percent of stores.

Researchers also found long lines both inside and outside 67 percent of state-run stores, and 66 percent of private businesses, that they visited.

In February 2015, the Venezuelan government arrested the CEO of supermarket chain Día Día, Manuel Morales, and accused him of provoking the large queues outside his stores amid the growing scarcity problem. However, according to this official government report, the issues involving the shortage crisis and long supermarket lines persist.

Economic War?

The report notes that the Nicolás Maduro administration undertook the study because of the alleged “economic war” that the country’s private sector is waging against the government by hoarding and smuggling goods.

Óscar Meza, director of the Venezuelan Center for Documentation and Social Analysis (Cendas), tells the PanAm Post that the leak proves that the government has avoided disclosing the results of previous studies because they would expose their “failed socialist model.”
According to Meza, the government refuses to publicly recognize that the shortage problem even exists. He adds that studies like this further invalidate the notion of an “economic war,” since they demonstrate that state-run stores are equally affected by the shortage crisis.
Without corrective measures, Venezuelans are set to face “more hunger, hardships, and misery,” Meza warns.
Rising Costs
On top of scarcity issues, Venezuelans must also deal with the rising cost of food. On Thursday, September 17, Cendas reported that the monthly cost of an average Venezuelan family’s basic-food needs rose 19 percent in July.
According to their estimates, a Venezuelan family must earn $65,013.54 Bs. — roughly 8.8 minimum-wage salaries — to cover their essentials.
Cendas also reports that the overall shortage rate in the country reached 36.2 percent in August, and says bread is the latest product to disappear from store shelves. According to Meza, of the 58 products that Cendas studied last month, 49 of them are scarce, including 21 products that are considered basic necessities.
Translated by Rebeca Morla.
Venezuela Reaches the Final Stage of Socialism: No Toilet Paper
By David Boaz
April 5, 2015
In 1990 I went to a Cato Institute conference in what was then still the Soviet Union. We were told to bring our own toilet paper, which was in fact useful advice. Now, after only 16 years of Chavista rule, Venezuela has demonstrated that “Socialism of the 21st Century” is pretty much like socialism in the 20th century. Fusion reports:
Venezuela’s product shortages have become so severe that some hotels in that country are asking guests to bring their own toilet paper and soap, a local tourism industry spokesman said on Wednesday….
“It’s an extreme situation,” says Xinia Camacho, owner of a 20-room boutique hotel in the foothills of the Sierra Nevada national park. “For over a year we haven’t had toilet paper, soap, any kind of milk, coffee or sugar. So we have to tell our guests to come prepared.”
Montilla says bigger hotels can circumvent product shortages by buying toilet paper and other basic supplies from black market smugglers who charge up to 6-times the regular price. But smaller, family-run hotels can’t always afford to pay such steep prices, which means that sometimes they have to make do without.
Camacho says she refuses to buy toilet paper from the black market on principle.
“In the black market you have to pay 110 bolivares [$0.50] for a roll of toilet paper that usually costs 17 bolivares [$ 0.08] in the supermarket,” Camacho told Fusion. “We don’t want to participate in the corruption of the black market, and I don’t have four hours a day to line up for toilet paper” at a supermarket….
Recently, Venezuelan officials have been stopping people from transporting essential goods across the country in an effort to stem the flow of contraband. So now Camacho’s guests could potentially have their toilet paper confiscated before they even make it to the hotel.
Shortages, queues, black markets, and official theft. And blaming the CIA. Yes, Venezuela has truly achieved socialism.
But what I never understood is this: Why toilet paper? How hard is it to make toilet paper? I can understand a socialist economy having trouble producing decent cars or computers. But toilet paper? And soap? And matches?
Sure, it’s been said that if you tried communism in the Sahara, you’d get a shortage of sand. Still, a shortage of paper seems like a real achievement.
Brain haemorrhage
Venezuela’s loss of thousands of oil workers has been other countries’ gain
From the print edition: The Americas
Jul 19th 2014
IN 2003 Venezuela’s then president, Hugo Chávez, fired more than 18,000 employees, almost half the workforce, of the state-run oil corporation, Petróleos de Venezuela (PDVSA). Their offence was to have taken part in a strike (pictured) called in protest at the politicisation of the company. Their punishment was to be barred from jobs not only in PDVSA itself but also in any company doing business with the oil firm. The axe fell heavily on managers and technicians: around 80% of the staff at Intevep, PDVSA’s research arm, are thought to have joined the strike. At the stroke of a pen, Venezuela lost its oil intelligentsia.
It was a blow from which PDVSA has never recovered. The firm’s oil production has since stagnated (see chart), despite a big run-up in prices. The financial crisis bears some of the blame for that, as does the economic mismanagement of Chávez and, since last year, Nicolás Maduro. But the loss of skilled personnel was a huge handicap, hurting exploration and management. The Centre for Energy Orientation, a Venezuelan NGO, says the number of incapacitating injuries due to accidents at PDVSA rose from 1.8 per million man-hours in 2002 to 6.2 in 2012. At Pemex, Mexico’s state oil firm, the rate was 0.6 in 2012.
Venezuela’s loss was others’ gain. Not all of the former PDVSA employees stayed in the oil business; a minority chose to remain in Venezuela. But thousands went abroad—to the United States, Mexico and the Persian Gulf, and to farther-flung places like Malaysia and Kazakhstan.
Many headed to Alberta, in Canada, where the tar sands yield a residue that is similar to the heavy oil from the Orinoco belt, which Venezuela is struggling to develop. There were 465 Venezuelans in Alberta in 2001; by 2011 there were 3,860.
Pedro Pereira, who once headed PDVSA’s research into the processing of extra-heavy crude oil, came to Canada in order to set up a similar research team at the University of Calgary in Alberta. His work focuses on inventing and patenting new technologies to process Alberta’s crude. Three dozen Venezuelans have passed through the Calgary centre since its inception, around two-thirds of them as a direct result of the purge of 2003. All have gone on to work in the Canadian oil industry.
No country has benefited more from the Venezuelan exodus, however, than one next door. Colombia’s oil output was declining at the time of the purge, falling from 687,000 barrels a day (b/d) in 2000 to 526,000 five years later. Today, average daily production stands at around 1m b/d. Much of this renaissance is thanks to the Venezuelans.
Former PDVSA executives had been heading to Colombia even before the purge. (Luis Giusti, a former chairman who quit as soon as Chávez came to power in 1999, helped the Colombian government redesign its energy policies.) But it was the post-2003 influx that revolutionised the industry. All of a sudden, says Alejandro Martínez of the Colombian Petroleum Association, “Colombia was filled with real oilmen.” The Venezuelans had years of experience, lots of it spent abroad. They had an excellent technical heritage: PDVSA was created in the mid-1970s when the local subsidiaries of sophisticated firms like Exxon and Royal Dutch Shell were nationalised. They were also used to thinking big. “They did not shy away from projects that needed $2 billion in investments when for Ecopetrol [Colombia’s state oil firm] $50m was a big deal,” says Mr Martínez.
In 2007 Ronald Pantín, a former chairman of PDVSA Services, bought Colombia’s Meta Petroleum along with several partners. Meta operated the Campo Rubiales field in central Colombia, from which operators were then barely squeezing 14,000 b/d. Now it is the country’s largest producing oilfield, and Pacific Rubiales Energy, Meta’s owner, is the largest independent oil producer in Colombia. Humberto Calderón, a former Venezuelan oil minister, founded Vetra in 2003. Today the two firms account for more than a quarter of the country’s production.
Without the input of the Venezuelans “there is no way Colombia could have doubled its production in such a short time,” says Carlos Alberto López, an energy analyst. It was an “extraordinary coincidence” that Colombia carried out its reforms just as PDVSA’s managers were thrown out, oil prices soared and areas once under guerrilla control were made safer. “The timing couldn’t have been better,” says Mr López.
The prospects for enticing the diaspora back to Venezuela are poor. The expatriates have put down deep roots abroad, and the situation at home remains chaotic. PDVSA’s goal is for the Orinoco belt to be producing 4.6m b/d by 2019. But the oil is difficult to refine, and the huge investment required is hampered by the government’s insistence on overvaluing the bolívar. So far PDVSA has missed all its intermediate targets for Orinoco: by the end of 2013 it had reached 1.2m b/d, compared with a planned figure of 1.5m.
Welders, electricians and machine workers reportedly make three times as much helping with the expansion of Ecopetrol’s refinery in Cartagena as they can in Venezuela, according to El Nacional, a Venezuelan daily. A ranking published by Hays Oil and Gas, a recruitment agency, put the average annual salary for oil-industry professionals in Colombia at $100,300. In Venezuela it is $50,000. From Calgary Mr Pereira says he is seeing a “second wave” of emigration that began a couple of years ago, of young professionals with five or six years’ experience. “As soon as they get some significant knowledge, they’re leaving,” he says. “The company, and the country, is heading for a disaster.”

Venezuela Enforces Fingerprint Registry to Buy Groceries: What to Do Before Rationing Starts in America
Daisy Luther
April 2nd, 2014
What if you were forced to “register” in order to buy groceries?  And what if, through that registration, the food you bought could be tracked and quantities could be limited?
(Pictured: Amateur photo: Venezuelans line up for miles in an effort to acquire food during hyperinflationary food shortages – March 2014)
That’s exactly the plan in Venezuela right now.  The AP reports that in an effort to crack down on “hoarding” that ID cards will be issued to families.  These will have to be presented before foodstuffs can be purchased.
President Nicolas Maduro’s administration says the cards to track families’ purchases will foil people who stock up on groceries at subsidized prices and then illegally resell them for several times the amount…
Registration began Tuesday at more than 100 government-run supermarkets across the country. Working-class shoppers who sometimes endure hours-long lines at government-run stores to buy groceries at steeply reduced prices are welcoming the plan.
“The rich people have things all hoarded away, and they pull the strings,” said Juan Rodriguez, who waited two hours to enter the government-run Abastos Bicentenario supermarket near downtown Caracas on Monday, and then waited another three hours to check out.
Checkout workers at Abastos Bicentenario were taking down customers’ cellphone numbers Monday, to ensure they couldn’t return for eight days. Shoppers said employees also banned purchases by minors, to stop parents from using their children to engage in hoarding, which the government calls “nervous buying.”
Rodriguez supports both measures.
“People who go shopping every day hurt us all,” he said, drawing approving nods from the friends he made over the course of his afternoon slowly snaking through the aisles with his oversized cart.
Reflecting Maduro’s increasingly militarized discourse against opponents he accuses of waging “economic war,” the government is calling the new program the “system of secure supply.
Patrons will register with their fingerprints, and the new ID card will be linked to a computer system that monitors purchases. On Tuesday, Food Minister Felix Osorio said the process was off to a smooth start. He says the system will sound an alarm when it detects suspicious purchasing patterns, barring people from buying the same goods every day. But he also says the cards will be voluntary, with incentives like discounts and entry into raffles for homes and cars.
Expressionless men with rifles patrolled the warehouse-size supermarket Monday as shoppers hurried by, focusing on grabbing meat and pantry items before they were gone.  (source)
Last year in Venezuela, it became a crime to “hoard” food, and the country’s Attorney General called upon prosecutors to crack down on “hoarders” by imprisoning them for the “crime”.

Some people may read this and think to themselves, “Why on earth do I care about what happens in Venezuela?”
You’d better care, because this is our future.
Already the Obama administration has moved the pieces into place on the board to be able to appropriate supplies from anyone, at any time.  Mac Slavo of SHTFplan warns:
It should be clear from the laws that are already in effect that the government has given itself a legal pretext for confiscating anything they so choose in the midst of an emergency.
Should an emergency befall the United States, the military, national guard, and local police operating under orders from the Department of Homeland Security will have carte blanche to do as they please.
In a widespread emergency where supply lines have been threatened and millions of Americans are without essential resources because they failed to prepare, the government will swoop in and attempt to take complete control.
They will enter our homes and search them without a warrant. They will confiscate contraband. And they will take any ‘excessive resources’ that you may have accumulated. This includes food, toiletries, precious metals and anything else emergency planners and officials deem to be a scarce material. (source)
Just think how much easier it would be to do so if every purchase you make is tracked and documented for future reference.
How Much of a Footprint Are You Leaving?
Now, think about those “loyalty cards” that every grocery store in North America promotes when you go through the checkout. Have you noticed how much more those are being pushed lately? Could there be a nefarious purpose to that?  I doubt the person at the cash register thinks twice about it – if these actually are data collection tools, it is something put in place by people far higher up the food chain (pun intended) than the staff of your local supermarket.
I strongly recommend you think twice about collecting “points” – the discounts may not be worth it if it means that your stock-up purchases are in some database, easily accessible to the NSA.  If you feel it is imperative to have one of those cards, consider using a pseudonym and false address.  You really don’t want to provide an inventory of your stockpile to the government. Some cards, like the one from Target, for example, even take it a step further and link to your credit card or debit account.  I can’t even wrap my brain around giving out that type of information to the person who rings up my paper towels and garbage bags.
To take this even further, if you haven’t been convinced yet that you need to begin producing your own food by gardening and raising micro-livestock, this should solidify the importance of not being totally dependent on “the system” for what you eat. Looking at the drought conditions across America’s farmland, is it a stretch of the imagination to think we could soon be facing rationing like that which is currently happening in Venezuela?  As the middle class gasps its last breath here in America, we may soon be faced with a situation where only the wealthy can afford to avoid rationing.  By becoming independent from the purveyors of food, you can assure that your family will not go hungry at the whims of a government who really doesn’t care.
Plan of Action
Here are a few things that you can do to pre-empt feeling the effects of a system like the one in Venezuela before such a change occurs on our own soil. Start now to leave less of a footprint for the government to follow.
1.Plant a garden.
2.Grow food indoors in sunny windows.
3.Consider an aquaponics set-up in a spare room.
4.Raise chickens and meat rabbits.
5.Stock up NOW on long-term staples like grains and beans, before limits are instituted.
6.Buy heirloom seeds – lots and lots of seeds.
7.Practice careful OPSEC (OPerational SECurity) when making large purchases.
8.Store longterm food supplies in more than one location. That way if you lose some of your supplies to thugs (government or other varieties), you still have supplies to fall back on.
9.Learn to preserve food.
10.Stock up of preservation supplies like lids, jars, etc.
11.Do NOT use so-called “loyalty cards” or memberships to make large purchases.
12.When ordering large quantities of supplies, consider having them mailed to some place other than your home.
13.Use cash or prepaid VISA cards purchased with cash to make large purchases.
14.Don’t tell others about your supplies and purchases.
15.Teach your children not to discuss things like food pantries and preparedness.
16.Don’t store your supplies out in the open for anyone who comes into your home to see. Stash your 5 gallon pails away in closets, under beds, or in the basement.
17.Disengage from the system by purchasing from small local farmers.
18.Use the barter system whenever possible.  When money was tight and I lived in a place where I couldn’t grow much food, I worked on a farm harvesting vegetables in exchange for produce that I could preserve for my family.
19.Change the way you eat – go with a local, in-season menu that is far more difficult to track than grocery-store purchased items.
20.Learn to forage. Even in the city, you might be surprised at how many things can be found growing in your own back yard or falling off of the trees in a local park.  My children and I picked up one small bag of walnuts a day at a little park down the street one year, resulting in almost 15 pounds of shelled nuts by the time we were through.
Whatever your plan, don’t delay. We need only to read the many articles predicting a food shortage this year due to poor weather conditions to see the writing on the wall. You must become responsible for your family’s sustenance if you don’t want to suffer at the hands of those in power. I have no intention of standing in line for hours with my “ID card”, only to be allowed to purchase a small amount of highly inflated food.
A Food Fight for Hugo Chavez
By Geri Smith   
March 11, 2010
Caracas - It's 10 a.m., and tempers are already flaring at the Cada supermarket in Caracas' San Bernardino neighborhood. The store has just taken delivery of two pallets of 4- and 11-pound sacks of sugar. With dozens of shoppers swarming around him, Rigoberto Fernández tries to pass out the bags one by one. The clerk hands a smaller one to a gray-haired woman, but she flings it back. "How dare you tell me I can't have one of the larger bags?" she screams. The sack splits open, spilling sugar everywhere.
Within 10 minutes, the shipment has vanished. "I am so fed up with these food shortages," Fernández mutters as he sweeps up the mess. "People get desperate and start behaving like animals."
Venezuelan President Hugo Chávez's response to the food shortages: find a scapegoat, in this case supermarket owners. On Jan. 17, the mercurial leader expropriated six Exito stores, controlled by France's Groupe Casino. A month later he seized Cada, another Casino chain, with 35 supermarkets and eight distribution centers.
El Presidente's efforts to transform his country into a Cuban-style socialist state are sputtering. With its vast oil wealth, Venezuela shouldn't suffer from shortages, yet inefficient farms, government takeovers of supermarkets, and a 50% currency devaluation in January have thrown the food supply into disarray. That's bad news for Chávez, whose anti-capitalist message and ceaseless drive to undermine U.S. influence in Latin America have made him Washington's biggest headache in the region. Chávez's approval rating among Venezuelans has dropped to about 45% from 70% three years ago.
Supplying low-cost food to the poor has been a centerpiece of Chávez's presidency. He has expropriated food processors, stores, and more than 6 million acres of farms and ranches, convinced that the government can feed Venezuela better than the private sector does. Under state ownership, though, production has suffered. From 1999 to 2008, per capita, sugar cane was off by 8%, fruit declined by 25%, and beef production dropped by 38%, according to Carlos Machado, an expert in agriculture at the Institute of Higher Administrative Studies, a business school in Caracas. "The cooperatives have failed and our cattle ranching has been decimated," Machado says.
While Chávez was flush with oil profits, it was easy to take up the slack with purchases of chicken from Brazil, beef from Argentina, and powdered milk from New Zealand. Food imports jumped from $1.3 billion in 1999, when Chávez took office, to $7.5 billion in 2008—about 70% of what Venezuelans eat. But falling crude oil prices and last year's 3.3% contraction of the economy left Chávez with less money to buy food abroad, or to prop up poorly run state farms and food processors. Government officials "think they know how to run businesses, but they just run them into the ground, just like they're running the country into the ground," says 47-year-old homemaker Antonia Rangel, one of the shoppers who managed to get a bag of sugar at the Cada store.
A new consumer protection law, which went into effect on Feb. 1, allows Chávez to expropriate virtually any company if he deems it to be in the national interest. Exito's alleged misdeed: raising food prices following the January devaluation (though two months later, on Mar. 9, the government authorized stores to boost prices on some basic goods by as much as 35%). Chávez wants to transform the chain's outlets into what he calls "socialist megastores" that sell food, appliances, and clothing with virtually no markup. "The measure is one further step in the Venezuelan state's policy of transforming capitalism into socialism," Chávez declared on his weekly Hello President TV show. Exito's parent and the government haven't disclosed any details on compensation.
The supermarket seizures have alarmed grocers, but few are willing to speak publicly for fear of more harassment. "This is one of the worst times we've ever lived through," says the CEO of a major supermarket chain. "We live in constant fear that we could be shut down or taken over by the government."
Chávez has been skirmishing with supermarkets for years. In 2002, big food producers and distributors participated in a two-month nationwide work stoppage that nearly brought the economy to its knees. In response, Chávez opened a rival network of government-run grocery stores, where more than a quarter of Venezuelans now shop.
The biggest state-owned chain, Mercal, has 16,600 outlets, ranging from street-corner shops to huge warehouse stores. They employ 85,000 workers selling basic products such as rice, sugar, and beans at prices as much as 40% below those the government sets for private stores. Mercal also has a fleet of trucks that serve street markets, and it offers free lunches and afternoon snacks at 6,000 soup kitchens. "Mercal is a very noble mission that contributes to a higher quality of life for Venezuelan families," says Carlos Alonzo Sánchez, manager of a busy Mercal store near El Junquito, a vast hillside shantytown on the outskirts of Caracas.
Joelis Muñoz recently carted 9 pounds of sugar, 7 pounds of rice, and 4 1/2 pounds of corn flour home from Sánchez's Mercal outlet. Her bill was $4.88, half what it would have been at a private supermarket. "Since the government opened these stores, my family hardly ever goes to regular supermarkets anymore," says the 21-year-old single mother.
The state-run stores serve as a platform for Chávez's revolutionary message. In the middle-class California Norte neighborhood of Caracas, an outlet of a second government-controlled chain called PDVAL (owned by state oil company Petróleos de Venezuela, or PDVSA) offers frequent reminders about the source of the bounty. At the entrance, a banner proclaims: "Food Sovereignty! All power to the people!" A few feet down the first aisle, a placard reminds shoppers that the "government is fighting for your food security." Says Luis Pedro España, a sociologist at Andrés Bello Catholic University in Caracas: "It's quite clear to anyone who shops at state-run stores that they owe it all to the President, who brought cheap chicken to the people."
Sometimes, however, there aren't any cheap chickens to sell. The PDVAL store offers tomato sauce from Spain, nutritional drink mixes, and cans of tuna at regulated—but not subsidized—prices. On a recent Friday, though, there's no chicken, beef, or sugar. To fill empty shelves, the store has stocked an entire aisle with nearly 1,000 bottles of cooking oil made by a company the government took over two years ago. Another aisle is filled with hundreds of bags of corn flour. A third is jammed with industrial quantities of dried oregano and curry powder.
When scarce products do arrive, word spreads fast and long lines form. "I can only let one or two people in at a time so things don't get out of control," says Omar Gálvez, manager of a small Mercal outlet in Petare, a rough Caracas slum.
Supplying Venezuelans with cheap chicken isn't cheap. Félix Osorio, Chávez's Food Minister, oversees Mercal from a spacious office filled with paintings, handicrafts, and other gifts from constituents. Osorio, a 40-year-old Army lieutenant colonel, says the government will spend $605 million this year on food subsidies, plus $1.8 billion to run the Mercal system. "Food is a basic necessity, and not mere merchandise," Osorio says, munching on a midnight snack of white cheese and fried beef empanadas after a long day in the field. "The capitalists," he says, "don't see it that way."
Even so, the government knows it can learn something from the people it frequently calls "squalid capitalists." Taking control of the Exito and Cada supermarkets makes sense, Osorio says, because the government needs more expertise in large-scale retailing. The authorities are negotiating with Groupe Casino and may allow the French company to stay on as a minority partner to help keep the chain running smoothly. Casino declined to comment.


The capitalists, though, face constant oversight. Members of Cuba-inspired "community councils," or neighborhood watch groups, can make unannounced inspections to look for signs of hoarding. One executive from a nationwide chain grouses about constant visits from tax authorities, the consumer protection agency (to check prices), workplace safety inspectors, and even the National Guard, which monitors store hours to make sure they don't stay open too long and use too much electricity at a time of widespread blackouts. Even when no infractions are found, the executive sighs, "The inspector can say, 'It doesn't matter, I have orders to shut you down for 24 hours,' and he does it—just like that."
Supermarket managers estimate that the government regulates prices on about 20% of the items they sell, but these products account for up to 40% of volume. "We make zero profit on most of the regulated foods, so we have to make up for it by charging more for other goods," says Carlos Hernández, manager of Los Campitos, a small grocery in Caracas' upscale El Rosal neighborhood. And at Exito and Coda stores, says one executive, the government seems intent on eliminating any possibility of turning a profit. "How are they going to replace freezers and forklifts as they wear out?" he asks.
Supermarket owners are watching how the government manages Exito, renamed Bicentenario in honor of this year's 200th anniversary of Venezuela's independence from Spain. Since the takeover, sales have sagged, according to Sintesis Financiera, an economics consultancy. Now suppliers concerned over delays in payment appear to be slowing deliveries, prompting Chávez to warn 60 companies that they may be expropriated if they fail to double deliveries to the chain.
With legislative elections scheduled for September, the fiery President is likely to continue cracking down on food retailers. Although he doesn't face another presidential vote until 2012, he's determined to hold onto his party's majority in the National Assembly. Chávez has won the loyalty of poor Venezuelans with his food subsidies, but as inflation erodes spending power, that support is flagging. After climbing by more than 15% annually from 2004 to 2009, consumption has started to fall, Central Bank data show.
As supermarket owners fret about further expropriations, Venezuelans increasingly say socialism isn't the right path. In a poll by researcher DATOS taken two weeks after the Exito seizure, 58% of respondents said they disapprove of Chávez's takeover of stores. Another DATOS survey found that 86% don't think Cuba is an appropriate model for Venezuela. Chávez "is moving in the opposite direction from what people say they want for their country," says DATOS director Joseph Saade. "People look at everything the government has taken over and they're seeing that the companies have become dysfunctional."

Also See:
A Better Way? Barter System vs. National Currency!
26 December 2009
Food Shortage, Then Anarchy!
25 July 2012
What to Expect when the Economic Collapse Occurs!
17 May 2013
Disasters Happen! Be Prepared!
(Part 1)
31 March 2011
(Part 2)
30 August 2012
The Collapse of the Entire World’s Economic System has Begun!
18 March 2013
Economic Collapse! How Did We Get Here?
27 February 2013
Are We Facing a Global Financial Crisis?
31 May 2011
Financial Crunch! Economic Collapse! (Part 1)
31 July 2008
(Part 2)
20 November 2008
(Part 3)
25 January 2009
(Part 4)
17 April 2009
(Part 5)
23 June 2009
(Part 6)
23 August 2009
(Part 7)
30 November 2009
(Part 8)
23 February 2010
(Part 9)
28 August 2010
(Part 10)
13 January 2011
(Part 11)
29 April 2011
(Part 12)
28 July 2011
(Part 13)
04 April 2012
(Part 15)
02 November 2012
Recession? ... Depression? ... What is Going On?
(Part 1)
06 October 2008
(Part 2)
02 February 2009
(Part 3)
19 April 2009
(Part 4)
02 August 2009
(Part 5)
17 September 2010
(Part 6)
17 September 2010
Jobs, Jobs, Where are the Jobs?
(Part 1)
20 April 2010
Chavez, Venezuela, & Socialism
02 June 2009
Are Suspicious 'Suicides' Really Government Murders?
(Part 2)
25 March 2013
Are there Changes in Store for Venezuela?
08 March 2013