Venezuela has changed forever… (Hugo Chavez)
“Whoever coined the phrase ‘you don’t know what you got until its gone’ was talking about toilet paper, probably” (Anonymous)
A beautiful country holding the world’s largest oil reserves has now become a source of media jokes and similar puns pertaining to their “crappy economy”. The reason for this unwelcome attention is that Venezuela is running out of toilet paper. A shortage of this most basic necessity is being blamed on “excessive demand” and “anti-Bolivarian conspiracy”. Commerce Minister Alejandro Fleming addressed this crisis by announcing that “ the revolution will bring the country the equivalent of 50 million rolls of toilet paper”. “We are going to saturate the market so that our people calm down.” His strategy is unlikely to work since his numbers are 40 million short of the country’s normal consumption of toilet paper which runs about 125 million rolls.
As urgent as this current crisis may seem, the ongoing situation also involves shortages of food, clothing and other commodities with a bottom line reality that the entire Venezuelan economy is in the tank. Economic policies of the late President Hugo Chavez’s Bolivarian Revolution have been called “unorthodox”. The controversial dictator picked fights with trading partners, mandated his own time zone and enforced strict currency and price controls. These state controlled prices set below market clearing profits always result in shortages. With toilet paper, for example, if the government says a roll should cost 50 cents, but supplies and labor cost 52 cents, local producers simply stop producing, with an always predictable result of scarcity. (Daniel Gross, “The Crappiest Economy”, The Daily Beast, 2013/05/16)
With Chavez successor and marginally elected President Nicolas Maduro, continuing a policy of state controlled prices, the situation is likely to remain volatile. It has been several years now since I have been to Venezuela and I have no immediate plans to return. Should you plan to visit, please be advised that this is not a tourist friendly country and you’d best BYOTP.