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Saturday, October 25, 2014

Despite Riches, Venezuela Starts Food Rationing


Despite Riches, Venezuela Starts Food Rationing

 Government Rolls Out Fingerprint Scanners to Limit Purchases of Basic Goods; ‘How Is it Possible We’ve Gotten to This Extreme’

By Sara Schaefer Muñoz in the Wall Street Journal

MARACAIBO, Venezuela—Amid worsening shortages, Venezuela recently reached a milestone of dubious distinction: It has joined the ranks of North Korea and Cuba in rationing food for its citizens.

On a recent, muggy morning, Maria Varge stood in line outside a Centro 99 grocery store, ready to scour the shelves for scarce items like cooking oil and milk. But before entering, Ms. Varge had to scan her fingerprint to ensure she wouldn’t buy more than her share.

Despite its technological twist on the old allotment booklet, Venezuela’s new program of rationing is infuriating consumers who say it creates tiresome waits, doesn’t relieve shortages and overlooks the far-reaching economic overhauls the country needs to resolve the problem.

“These machines make longer lines,” said Ms. Varge, 50, as she was jostled by people in line, “but you get inside, and they still don’t have what you want.”

The government rolled out the system last month across 36 supermarkets in this western border state, Zulia, whose capital is Maracaibo, with a recent expansion into a select number of state-owned markets in Caracas.

Venezuela is turning to rationing because of shortages caused by what economists call a toxic mix of unproductive local industry—hamstrung by nationalizations and government intervention—and a complex currency regime that is unable to provide the dollars importers need to pay for basics.

The tumbling price for Venezuela’s oil, which has fallen by nearly $15 a barrel since September to $77.65 on Friday, is likely to mean even more scarcity in the cash-strapped country, economists say.

Already, only 30% of the normal level of basic, price-controlled goods were available in a select group of Caracas supermarkets, said a recent survey by Venezuelan polling firm Datanalisis.

“The government is the one that lets the problems flourish,” said Eliseo Fermín, an opposition member of Zulia’s state congress. “Now the average citizen bears the brunt.”

Under the system in place here, basic price-controlled items—including milk, rice, coffee, toothpaste, chicken and detergent—are rationed, with the fingerprinting machine used to ensure that a shopper doesn’t return over and over to stock up. It means that consumers are limited to buying up to 2.2 pounds of powdered milk—called “gold” here for its rarity—a week.

Venezuelan officials blame the shortages on smugglers who they say buy price-controlled products here and sell them for a handsome profit in neighboring Colombia.

Though economists estimate that about 10% of Venezuelan consumer merchandise winds up in Colombia, Venezuelan President Nicolás Maduro has said that the figure is 40%. He has closed checkpoints along the whole 1,375-mile border at night to stem the flow, and a crackdown on smugglers has led to the arrests of shoppers that officials believe to be planning to sell what they purchase in Colombia, say border guards.

“It is the responsibility of everyone to unite against contraband,” Zulia Gov. Francisco Arias, a member of Mr. Maduro’s Socialist Party, said on a recent TV show. He and other officials say fingerprinting prevents bulk buying for resale more effectively than requiring shoppers to show their national identity cards, a method that is used to track and limit purchases in some Caracas stores.

Many economists say jettisoning currency and price controls, as well as loosening restrictions on local producers, would alleviate shortages.

Here at Maracaibo’s supermarkets, hot and cranky consumers who were waiting in line recently pointed to the irony of Venezuela, a country with $114 billion in oil sales last year, having to ration toilet paper.

“It sort of makes me want to laugh, but I can’t,” said Nayibi Pineda, a hotel housekeeper. “How is it possible we’ve gotten to this extreme?”

Shoppers said the time waiting in line can stretch to more than five hours, a delay they chalk up to malfunctioning fingerprinting machines.

“I’ve spent hours standing in line, suffering in the sun,” shrieked a tearful Luzmarina Vargas, clad in a bright pink robe typical of the area’s Wayuu Indians.

Salvador González, the Zulia state finance director who oversees machines, said officials were requiring machines to be installed at each checkout point in order to shorten lines. Supermarkets must bear the cost of the machines, around $150 each.“Our objective is to guarantee cheap food,” he said in an interview.

It isn’t just food that’s rationed here. Officials shut off water to homes for up to 108 hours a week, say residents, because of problems with the water delivery system.

In the birthplace of Venezuela’s oil industry—the first well was drilled here in 1914—the sale of gasoline is also tightly controlled. Scanners read bar codes that are required on car windshields to limit drivers from filling up their sedans more than twice a week. The measure is designed to curb the sale of Venezuela’s heavily subsidized gasoline—which costs less than a penny per gallon—in neighboring Colombia, where a gallon goes for $4.50.

“This country is falling apart,” said one driver, Darwin Padilla, as he mopped his face with his shirt while waiting in a line of idling cars for more than an hour to fill up. “And as you can see, I can’t get parts to replace my car’s air conditioning, either.”

But the fingerprinting machines—and the shortages of basics—are irritating consumers, who also must contend with rationed water and gasoline.

“If I can’t find disposable diapers I use cloth ones,” said Rosa Fernandez, mother of an infant, who noted that to buy diapers she has to show the checkout clerk her child’s birth certificate. “Then I can’t find detergent. Then if I get detergent, there’s no water.”

Some items that aren’t priced-controlled, like deodorant, are also hard to come by. Finding them can be like winning the lottery in a region where temperatures are infernal year-round.

“Look what I got!” a woman, waving a scented body spray after leaving a pharmacy, exclaimed to other shoppers. “But don’t go there, it’s all out now.”

 

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