Economics

Price controls and scarcity force Venezuelans to turn to the black market for milk and toilet paper

In Petare, a giant slum overlooking Caracas from the east, hustlers known as buhoneros sell their goods at a busy intersection. “I’ve got milk, toilet paper, coffee, soap…” said 30-year-old Carmen Rodríguez, pointing to her wares by the side of a road busy with honking motorbikes, cars and buses. “Of course they cost more than the government say they should. We have to queue up to get them or buy them from someone who has done. We’re helping people get the basics.”

Yet, many of the poor simply can’t afford Rodríguez’s basics. In a raw and arguably necessary display of capitalism, she sells them for far more than the government’s legally required “fair prices”. It is ironically because of those government-imposed fair prices that the goods often aren’t available at supermarkets at fair prices as it’s simply not profitable to import them. This is thanks to economic policies dating back more than a decade.

Rodríguez sells each of her products for around 100 bolívares. At the black market currency exchange rate, that’s just 30 pence or so. But at that same exchange rate, the minimum wage in Venezuela is around £15 a month.

“I can’t live like this, earning the minimum wage. It’s not enough at all,” said Araceli Belaez, 40, lining up for groceries at a supermarket in the Caracas slum of Catia.

Johan Elizandre is a fruit-seller in 23 de enero, a slum on the other side of Caracas. It overlooks the presidential palace and its walls are adorned with murals of leftist heroes such as Che Guevara, Karl Marx and former Venezuelan president Hugo Chávez. “A kilo of meat costs me 600 bolívares” said Elizandre, who earns 7,000 bolívares a month, around £20 when measured at the black market exchange rate – far more than the minimum wage. “I have sons, aged five and seven. I’d rather give them the food and not eat so much myself.”

The scenes at Petare’s intersection, 23 de enero’s streets and Catia’s supermarkets are manifestations of an economy in tatters: one in which people buy milk, toilet paper and shampoo at inflated prices because supermarkets, with long queues outside, are near empty; in which engineers and lawyers smuggle pasta and petrol across borders to earn many times more than they would carrying out their profession; and in which surgeons complain that people are dying on the operating table because they cannot import medicines and equipment.

Source: The Guardian

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