El Nacional published an article today in which it notes that Maduro has implemented at least seven measures to curb the scarcity crisis, all of which have failed. The article points out that all of the measures focused on buyers, while economists argue that the solution can only come from a fundamental shift in the country’s strict price and exchange controls, as well as by cooperating closely with private business leaders instead of antagonizing them.
The article begins by explaining that two weeks into Maduro’s latest attempt – declaring a state of exception in 10 municipalities in Tachira state and closing the border with Colombia there – and the smuggling and bachaqueo (reselling regulated products on the street at a premium) continue unabated in San Cristobal, and shoppers are still forced to line up for hours in the hopes of finding basic necessities in the country’s supermarkets. On the latter issue, El Nacional observed a five-block long line up outside a San Cristobal supermarket on Thursday. Teresa Useche, a woman in line, told the newspaper:
We’re still lining up the same way. If the supermarkets were full of the products that the bachaqueros aren’t sending to Colombia anymore, this line wouldn’t be here. It’s simple logic.
The article also points out the fact that bachaqueo outside the zones of exception in Tachira is even less affected by these latest measures. At the Petare Roundabout in Caracas, “nothing is lacking”. The newspaper found that virtually every scarce necessity – baby formula, soap, milk, butter, and coffee, for example – are found, either in plain sight or hidden, “depending on the police pressure” at the time. There, a re-seller gave her opinion on how to solve the scarcity:
The way is not to persecute the bachaquero; it’s to supply and stop running over the people.
While the article refers to a Datanalisis poll that found that 65% of people in supermarket lines are bachaqueros, it also mentions that ordinary shoppers are often reluctant to alert the authorities out of a fear of causing trouble for themselves. This reluctance hinders a government initiative based on “social intelligence” to denounce suspected bachaqueros. The head of the Econometrica firm Henkel Garcia disagrees with the initiative:
It has neither positive effects nor mass application, because in a good number of cases, the bachaquero is actually a neighbour.
Bachaqueros Argue They’re Just Trying to Survive
At the heart of the focus on the bachaquero is their insistence that they are simply trying to make a living in an increasingly desperate Venezuela. In a country where the monthly minimum wage is a mere Bs. 7,421.67, reselling regulated items can be an extremely appealing line of work. El Nacional points out that a 1 kg bag of beans sells for Bs. 55 at supermarkets, but goes for Bs. 600 in the streets of Caracas.
When I found myself unemployed, I saw this as a way to make money. I go to supermarkets where they don’t ask for I.D. and I line up two or three times, depending on how long the lines are.
“J” said that he never jumps ahead in line, that he works alone and that the most questionable thing he’s done while bachaqueando is given a security guard Bs. 150 to let him in to a supermarket. He said that he can make Bs. 1,000 a day, with the added bonus of also having access to the food he needs to feed his family.
Despite this fact, “J” believes his days as a bachaquero are numbered. Paradoxically, “J” sees the very same scarcity crisis that gave rise to his profession as the thing to end it:
I don’t think I’ll last much longer doing this. You can’t re-sell anymore because you can’t find things. Whatever I can find I take home. Last week I made Bs. 3,000, and I’ve already spent it because I had to go to bachaqueros to buy food.
NGO Questions Definition of Bachaquero
An NGO called Transparencia Venezuela questions the term bachaquero, which it claims is a blanket word used by the government that can potentially include every shopper in Venezuela. The group’s director, Mercedes De Freitas, points out that since Venezuelans do not expect the crisis to subside any time soon, even ordinary shoppers will try to hoard whatever meager quantity of items they’re lucky enough to find in supermarkets. De Freitas said:
Who’s a bachaquero? Whoever buys for themselves, or re-sells items? Sometimes, it looks as if the government refers to both groups without distinction. Why should people go to jail for having 10 kg of sugar stocked in their house?
Economists Blame Strict Price, Exchange Controls
The re-seller looks for prices that are regulated at below the market value. They take advantage of the difference that exists between the regulated price and whatever the consumer is willing to pay. If this difference didn’t exist, there would be no bachaqueo or smuggling. The existence of these very low prices stimulates demand and destroys supply.
Luis Vicence Leon, the head of the Datanalisis firm, pointed out that targeting those who engage in re-selling has been tried before by other governments in similar situations to no avail:
The Russians would sent people who dealt through the black market to jail. There have been governments that have even executed people who participated in the black market, and they weren’t able to stop it. The issue can be resolved by either having product or adjusting the prices to market levels.
Domingo Sifontes, an economist, told the newspaper that the only solution to what is an inherently economic problem is an economic one:
The problem can be resolved by taking real economic measures. The model has been changed so that the economy will work. We also have to look at currency exchange and make it more flexible, and come to agreements with national businesses so that they can produce.
The article points out that the price regulations in place now since 2003 are not the first time Venezuela has implemented the idea. President Rafael Caldera also introduced price controls in 1994, a measure that lasted two years. Before that, President Jaime Lusinchi applied a set of price controls to help stop runaway inflation between 1984 to 1989, which jumped from 15.7% in 1984 to 103% in 1989. Henkel Garcia pointed out:
This is history repeating itself. The Caracazo happened in 1989 when [President] Carlos Andres Perez was putting measures in place to remove the price regulations Lusinchi had imposed. There were shortages and scarcity back then, too, and the people were really beat up by the government regulations.
Despite the similarities, Luis Vicente Leon argues that the situation Venezuela is in today is worse than what happened in the 1980s:
In those cases, we broke inflation records in Venezuela, but we never reached a situation such as this one because the controls were never has absurd and they never lasted for so long.
The article argues that the economists believe the first step Maduro must take to ease the scarcity crisis is to do away with the Bs. 6.30 exchange rate, and to help national industry produce.
Marco Coello Seeking Asylum in US
Marco Coello, one of the co-accused in the Leopoldo Lopez trial, is seeking political asylum in the United States. Hiw mother, Dorys Morillo said that she has not been able to contact her son, but that she understands that he is working with people in the United States who are helping him file the required paperwork.
Coello’s lawyer, Carlos Garcia, said that Coello had been pushed to the breaking point by the trial, and that he had been abused by authorities:
He broke during the last two [court] sessions. He was really nervous, even though he was undergoing psychological treatment for post-traumatic stress. Let us not forget that when he was detained on February 12 and until the time he appeared in court two days after, Marco Aurelio was tortured by CICPC officers: they hit him in the back with a fire extinguisher and doused him in gasoline.
Garcia also said that as far as the law is concerned, Coello did not commit a crime by traveling to Miami because his bail conditions did not prohibit leaving the country. Garcia said:
He wasn’t under arrest, and there was no travel restriction. In other words, he did not escape, and there has been no crime. He’s only in violation of the order to appear in court… but he has not committed a new crime [for which he can be charged in addition]. In fact, he was able to enter the United States on a tourist visa.
Minister of Defense Seen in Cuba
Minister of Defense Vladimir Padrino Lopez has appeared after weeks of speculation over his apparent disappearance. Rumors circulated social media that Lopez was undergoing cancer treatment, and that he had traveled to Cuba to seek medical care. The latter point has been confirmed, as pictures of Lopez surfaced through Twitter alongside Fidel Castro:
There is still no official word from the government to explain Padrino Lopez’s continued absence from his post as Minister of Defense.
Questions/Comments? E-mail me: firstname.lastname@example.org