Energy

Venezuela Threatens To Seize Control Of All Bakeries

Venezuela is threatening to seize control of bakeries in the country’s capital of Caracas, unless they comply with numerous new regulations.

The country’s socialist government is setting strict new regulations on the city’s 709 bakeries, which includes forcing them to sell goods at far-below market prices and preventing them from selling anything but bread.

“The government monopolized the importation of all food products and everything that monopolizes the government ends up being characterized by inefficiency and corruption that is paid for by the Venezuelan consumer and ultimately collapses the companies,” Víctor Maldonado, executive director of the Caracas Chamber of Commerce, told PanamPost. “Once the government sets the price unilaterally, freezing prices in an inflationary economy, the effect is that the product disappears. And the bakeries have opted for producing other products in order to be able to survive economically.”

Bakeries in the country are already plagued by strict price controls, currency controls and the government monopoly on imported raw materials.

Three-quarters of Venezuela’s population lost at least 19 pounds amid serious food shortages last year. A 2016 living conditions survey called “Encovi” conducted on 6,500 Venezuelan families found that 32.5 percent eat only once or twice a day. That’s about three times higher than the 11.3 percent answering the same question just a year ago, the survey found. Encovi estimates 82 percent of Venezuelan households live in poverty.

Venezuela isn’t experiencing a famine, but is living with the consequences of decades of socialist policies. Price controls force businesses to sell food at low prices, encouraging farmers to sell on the black market or outside the country. For example, Venezuela requires cornmeal to sell for about 16 cents a bag, but the same cornmeal can sell for $3 dollars on the black market.

Cash-strapped Venezuela can’t pay for food imports after years of mismanagement, heavy spending on poorly-run government programs, and lack of investment on its oil fields. The government rejected food assistance from Amnesty International and the United Nations.

Meanwhile, Venezuela’s inflation rate is expected to top 1,640 percent in 2017, according to the International Monetary Fund. The country may have the world’s highest murder rate.

Venezuela also has some of the world’s largest petroleum reserves, but the collapse in crude oil prices is cutting into state coffers. The country can’t afford to pump oil at current prices, and as recently as February was forced to accept shipments of U.S. crude oil.

The nation formerly run by the late Hugo Chavez also suffers from rolling blackouts that can last for days.

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