Archive for July 26th, 2009

When ships arriving carrying sugar becomes the news in Venezuela

July 26, 2009

(Este post está en español aquí)


You know something is wrong in the Venezuelan economy, when the arrival of the ships carrying sugar is not only part of the news, but the Minister of Food feels like he has to make a big deal of it. Such are things under revolutionary Venezuela.

Because the shortages of sugar are essentially the Government’s fault. Recall that sugar was the first area where the revolution found the need to declare a priority. The Government first began bringing to Venezuela the same Cuban technicians who were responsible for the demise of the Cuban sugar industry. As if that was not enough, the Cuban Government sold us, like trinkets to the indians, their outdated sugar processing plants. For Hugo Chavez thsi was one of his first economic fixations, as Fidel took the money for the trinkets, child-Hugo told the world how self-sufficient we would become on sugar production.

But this was not enough, Chavez also had to go and start taking over the land where sugar cane is grown and divide it up and allow families to work small plots. Add to that the corruption surrounding the sugar processing plants (You may be wondering: Whatever happened to the US$ 500 million spent on CAEEZ,? Maybe by the end of the year it will be functional, only 5 years behind schedule) and you get the picture: Venezuela, despite the Chaves-cum-revolution in sugar, still produces only 60% of what we consume. Since by now the Government regulates and corners the importation of sugar, shortages are the norm, not the exception and they have been around since 2007. The reason is simple and it has become a vicious circle: With sugar under price controls, it is not interesting for everyone to compete with the Government in importing it. The Government and PDVSA buy and import it and then there is an over supply for a few months and then, the Government forgets it has to keep the flow coming, or forgets to pay for the last shipment. In a couple of months there are shortages, the Minsiter learns about them and the whole process begins again…

In fact, we are on the “high” on the milk cycle right now. PDVSA imported so much milk over a year ago, that the Government has reneged on contracts with Uruguayan producers and even has forgotten to pay them. The result is that right now nobody is worrying too much about importing milk. Wait a few months…

But the Minister of Food (or Feeding?) hails the arrival of 14,000 Tons of sugar last Wednesday  and says two more ships are coming, which he says proudly “will allow us to take care of possible shortages”

But, of course, it is not the Government’s fault. It’s your fault, or mine, or “the people” who have been hoarding it due to the “strong media campaign”. At least he admits at the end that there was that small matter of the Government not approving the foreign currency for importing sugar and you get the picture. There are shortages because we have all these stupid policies in place that delay and slow down everything. But don’t expect the revolution to admit that it is the bad policies that are to blame for the shoratges.

In the end, as absurd as it may seem, it is better for the Government to buy the stuff outright, than to start another grandiose and corrupt project which will cost the same but take years to generate the first Kilogram of sugar. I am sure somebody is pocketing some money bringing the sugar, but at least it gets here.

Of course, the problem is that this gets replicated in every sector that the Chavez administration wants to put its finger in and the way things are going, this will soon mean everything related to food in Venezuela.

And as the money gets short: Watch out, the arrival of every ship will be hailed not only by the Ministers but by the whole population, which will see each shortage at last over, a la Cuba, for at least a while, when the first sign of the ship is seeing over the horizon.