Saturday, March 29, 2014

THE SCRAPE: LIFE AMONG VENEZUELA’S HAVE-NOTS

Have-Nots even after the resounding success of Communism there?  No way!!

Simultaneously, much more than flour and milk is lacking from shelves. In November, the military occupied a chain of electronics shops called Daka, similar to Best Buy, and forced them to charge “fair” prices that the government deemed appropriate. This approach eventually extended to other products; many shops simply pulled down their shutters rather than sell at a loss, while others remained open but with hardly any inventory. Exacerbating the situation, President Maduro, in January, decreed the Fair Price Law, which set the maximum profit margin for “each actor”—including manufacturers and retailers—at thirty per cent. Retailers say that they struggle to get hold of dollars at the official rate through the government’s byzantine mechanisms and must turn to the black market, which means charging prices the government deems unfair. The government has introduced various exchange policies to try to address the shortage of dollars, but none have managed to meet demand, as manifested in the country’s soaring black-market exchange rate.

People are hit hardest by shortages in San Cristóbal, because of its proximity to the border. Colombians come to the city to buy up price-controlled products with their hard currency, then smuggle them out and then re-sell them back home. This is especially true of gas. Venezuela’s gas prices are the lowest in the world—around six cents a gallon. On the Colombian side of the border, pimpineros, as gas smugglers are known, line the streets for miles with jerricans, often shaded by wooden shacks, to resell the gas at higher rates.

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