People all over the world are again laughing at Venezuela Not this time at the ridiculous figure of Hugo Chavez but at the system he left behind. It requires debate in the National Assembly for toilet paper to be purchased. 39 Million rolls are to be bought. The National Assembly then has to debate approval of USD 79 million for import of toothpaste and soap.
Nicolas Maduro, who won a narrow majority in April’s presidential elections, maintains the pathetic rhetoric that the country’s chronic shortages of basic goods are the result of a conspiracy by the opposition and rich sectors of society.
The truth is more prosaic. Government interference has made a complete mess of food distribution and the hasty devaluation of 32% effected earlier this year has made imported prices seem exceptionally high to consumers. The government’s bungled attempts to impose state control on the economy have created huge imbalances that have led to the shortages.
“Price controls, for example, act as a disincentive to local producers, forcing them to cut output,” says the survey organisation Consensus Economics. ”The resulting scarcity forces up inflation, defeating the entire purpose of price controls in the first place.”
Nicolas, there is a solution. It is a very old solution and it works. It is called a shop. Not a government owned shop but a shop owned and run by a citizen or company with no price control. If the shops make a profit, other shops will open and price levels will even out to a market level where both customers and sellers get an acceptable deal. Government will get revenue from sales tax (IVA) and on profits. In fact, Nicolas, it’s the system that your Daddy in Cuba is now depending upon because the old method doesn’t work.
Please stop making Venezuela look like a joke and let the world of commerce deal with toilet paper and soap and toothpaste. As a government, you should have better things to do. Deal with record murder rates, improve infrastructure, ensure continuous electricity supply, repair the flagging oil output figures, provide companies incentives to create real employment, stop sending free oil to other countries and, above all, stop the corruption in your country. Start with your government. You wouldn’t be making such a fool of yourself if PULPACA had been a proper investment and not a complete farce of socialist incompetence and corruption – tell us where the money went!!!!!!!