Author: Jerry Barnes
With Venezuelan Food Shortages, Some Blame Price Controls
Venezuela is one of the worlds top oil producers at a time of soaring
energy prices, yet shortages of staples like milk, meat and toilet paper
are a chronic part of life here, often turning grocery shopping into a hit
or miss proposition.
At the heart of the debate is President Hugo Chávezs socialist-inspired
government, which imposes strict price controls that are intended to make a
range of foods and other goods more affordable for the poor. They are often
the very products that are the hardest to find.
Venezuela was long one of the most prosperous countries in the region, with
sophisticated manufacturing, vibrant agriculture and strong businesses,
making it hard for many residents to accept such widespread scarcities. But
amid the prosperity, the gap between rich and poor was extreme, a problem
that Mr. Chávez and his ministers say they are trying to eliminate.
They blame unfettered capitalism for the countrys economic ills and argue
that controls are needed to keep prices in check in a country where
inflation rose to 27.6 percent last year, one of the highest rates in the
world. They say companies cause shortages on purpose, holding products off
the market to push up prices. This month, the government required price
cuts on fruit juice, toothpaste, disposable diapers and more than a dozen
But many economists call it a classic case of a government causing a
problem rather than solving it. Prices are set so low, they say, that
companies and producers cannot make a profit. So farmers grow less food,
manufacturers cut back production and retailers stock less inventory.
Moreover, some of the shortages are in industries, like dairy and coffee,
where the government has seized private companies and is now running them,
saying it is in the national interest.
Wow. Who would have thunk it?
Ninety percent of politicians give the other ten percent a bad reputation.
- Henry Kissinger
Politicians are people who, when they see light at the end of the tunnel,
go out and buy some more tunnel. - John