Rory Carroll reports from Venezuela where, in an effort to sustain food production based on government-subsidised stores and restaurants, Hugo Chávez is criminalising shopkeepers who want to set their own prices. Great video from the Guardian UK!
You could call Omar Cedeño many things: a class traitor; a tool of international capitalism; a criminal suspect; even an enemy of Hugo Chávez’s socialist revolution. You could also call Cedeño, who sells meat from a cramped shop, a butcher. He has been a fixture in the Candelaria district of Caracas, Venezuela’s capital, for 20 years, flapping in and out of his shop in a grubby white coat, arranging cuts of beef, pork and chicken in a display case, joshing customers.
There are fewer jokes these days. Military police recently seized Cedeño and dozens of other butchers on suspicion of overpricing. Cedeño was handcuffed, stripped, interrogated at an army base and charged with speculation. If convicted he faces up to six years in jail. ”I’m not a capitalist or a socialist, I’m just a worker. People are being arrested for doing their job,” said the 47-year-old, now back at his shop but obliged to report to a tribunal every 15 days until the trial.
Cedeño’s alleged crime: selling beef for £4 a kilo, well above the regulated price of £2.58. He does not deny it – prices are marked on a white board behind the counter. “I’ve got to cover my costs. What business doesn’t? Yet eight officials came here to arrest me. It’s an abuse of power.”
Most economists attribute Venezuela’s soaring inflation to loose monetary policy, exchange controls, devaluation and anaemic domestic production, dynamics that show no sign of abating. ”The government has boxed itself in with a misguided policy mix of rampant spending and price and foreign exchange controls that has resulted in a growing output gap and galloping inflation,” said Patrick Esteruelas, of Eurasia Group political consultancy. He added that the government, unwilling to risk austerity measures in the run-up to September’s congressional elections, was deflecting blame. “It has found it highly convenient to persecute private food retailers.”
Venezuela’s authorities disagree. They say private firms are cheating customers with unjustified price rises that are driving 30% inflation, Latin America’s highest. Food prices are rising even faster, at 40%. According to Chávez, it is part of a plot by US-backed “fascist oligarchs” to destabilise his leftist experiment.
“Do you know why capitalist prices are so high? Because they are thieves, stealing from the people. Don’t let them trick you,” said the president during a TV broadcast last week. He promised to crush speculators and lower prices in what he termed an “economic war”.
The stakes are high. After 11 years in power the former tank commander’s ratings have slumped amid a recession, leaving his petro-state mired in stagflation, while the rest of South America booms. With legislative elections due in September, the president is offering socialism as an economic cure.
The strategy is to boost state-backed food production and sell output at subsidised prices, while curbing the private sector and capping its prices for staples such as milk, beef and coffee. “They know where we are headed, we are going to take from the Venezuela bourgeoisie,” the president told cheering supporters.
But problems are mounting. In the name of “nutritional sovereignty” the government seized 6m hectares (about 15m acres) of farmland, expanded cultivation and set up socialist co-operatives. Results are poor: beef, sugar, coffee and fruit production plunged. Grain and rice output initially rose, but fell last year.
Food imports soared to $7.5bn (about £5bn) last year, by some measures a sixfold increase since Chávez took office. Partly that was because an oil boom and anti-poverty policies increased people’s spending power, but mainly it was for want of domestic production, according to Cavidea, the food industry body.
Record oil revenues funded a government chain of subsidised grocery stores and markets, a pillar of Chávez’s popularity. At an open-air stall, shopper Maria Clemente, 60, said: “I’ve just stocked up on rice, sugar, corn, milk, all at rock-bottom prices.” The government also opened a chain of fast-food restaurants selling arepas – cornbread sandwiches – at bargain prices. Quotes from leftist thinkers line the walls and red stars adorn toilet doors. Recently in Parque Central’s restaurant, three TV screens showed Chávez, broadcasting live from another location, tucking into an arepa. “Mmmmm, this is Fidel’s favourite,” he said, referring to his Cuban ally.
But critics are exercised by another odour: that of 80,000 tonnes of imported food discovered rotting in government warehouses, a scandal that prompted the arrest of senior officials. Some government-run stores are showing strain: bare shelves and scarce meat. “No chicken, and they make you buy tomato sauce with everything,” grumbled one shopper, Elvira Sierra, 54.
Undeterred, the government has pressed ahead with the takeover of farms, processing plants and supermarkets and threatened to nationalise Polar, Venezuela’s leading beer and food company. Troops have seized company land, impounded “illegally stored” food and made hundreds of inspections. It is a risky target given that Polar is to Venezuelans what Cadbury, Hovis and Carling are to Britons. The company declined interview requests.
The authorities also continue to prosecute smaller fry for selling above regulated prices. “It’s becoming impossible,” said Cedeño. “I’m supposed to sell meat at what it costs me to buy. How do they expect me to cover costs and stay in business?