Friday, February 1, 2013

Venezuela Battles Historic Food Shortages

While much of the media attention on Venezuela has focused on the health of President Hugo Chavez and on the constitutionality of Vice President Nicolas Maduro running the administration in his stead, the Venezuelan public has been hit by a more immediate issue in the country: food shortages. As noted in yesterday’s post, the country is seeing the highest levels of food shortages in years.

According to Caracas-based polling firm Datanalisis, its latest survey for the first half of January found that 32.5 percent of markets and stores had limited amounts of basic goods in stock, the highest levels of scarcity recorded by the firm since January 2008, when the figure reached 34 percent.

The most commonly scarce goods were cooking oil, sugar, butter and wheat flour, which have taken a massive toll on bakeries. The AP reports that many bakeries across the country have been simply unable to obtain enough flour to make bread on a large scale. On Tuesday, Venezuela’s federation announced that several of its members had been forced to close temporarily as a result of flour shortages, and called on the government to take immediate action to address the problem.

The government maintains that the shortages are caused by hoarding and price speculation, and have launched a plan to crack down on businesses accused of stockpiling food and selling it at inflated prices. Warehouse raids recovered 17,000 metric tons of allegedly hoarded goods in January, according to officials.

However, the Venezuelan Food Industry Chamber (CAVIDEA) has rejected these claims, saying that current regulations and government-mandated price controls “make hoarding and speculating by any company impossible.”

A more likely culprit is the fact that, since presidential elections in October the government has restricted the amount of dollars available to importers at the fixed exchange rate. This has caused the price of dollars on the black market to spike, worsening Venezuela’s inflation rate and contributing to food shortages.

Though it still publicly blames shortages on price speculators, the government seems to have privately accepted this as the main cause. On Monday officials announced that the state-run PDVSA oil company would turn over more of its profits in dollars to the Central Bank in order to meet the private sector’s demand for the currency to buy imports. Concern that the move would be insufficient persisted, however, and Reuters reports that on Thursday the government announced a new series of reforms intended to streamline access to dollars.

News Briefs
  • An explosion rocked the Mexico City headquarters of state-owned oil company PEMEX yesterday afternoon, killing 25 and injuring at least 101, Excelsior and El Economista report. The cause of the explosion is still unclear. Initial reports suggested that the blast was due to an electrical failure in the office building’s air conditioning system, but President Enrique Peña Nieto released a statement saying that an investigation into the incident is underway, and cautioning against any kind of speculation as to its causes.
  • Mexico has named a new director for its public transparency agency, the Federal Institute of Access to Information and Protection of Data (IFAI), El Universal reports. The new director, Juan Pablo Guerrero, was IFAI’s former commissioner and is well-regarded among transparency advocates in the country. Proceso notes that members of the Institutional Revolutionary Party (Partido Revolucionario Institucional, PRI) in Congress are pushing the agency of wrongdoing and mismanagement, and are pushing to replace its commissioners, all of whom were appointed during the administration of Felipe Calderon. Writing for CNN Mexico, former IFAI head and current commissioner Jacqueline Peschard defends the agency’s recent achievements, noting that it over the past several years it has come to be regarded as a moral authority in the country.
  • El Informador and the AP report that a coalition of community self-defense groups in rural Guerrero state has detained some 50 people accused of participating in drug trafficking. The accused -- some of whom are local police -- are being held in improvised jails.
  • In an op-ed for the Washington Post, Olga Khazan and Nick Miroff analyze three ways in which immigration reform in the United States could affect security and agricultural labor in Mexico.
  • La Silla Vacia profiles Colombia’s new Drug Policy Advisory Commission, which announced at its first meeting Tuesday that it will pressure lawmakers to solidify a June 2012 Supreme Court ruling decriminalizing the possession of small amounts of marijuana and cocaine, as well as widen it to include synthetic drugs like ecstasy. The commission was created by President Juan Manuel Santos, and is headed by former president Cesar Gaviria. Santos, who has voiced increasingly strong support for decriminalization in recent months, renewed his calls for a debate on drug policy at last weekend’s EU-CELAC summit in Chile. But as an op-ed by Chilean analyst Eduardo Vergara in El Mostrador points out, drug laws were not addressed at the summit, which Vergara characterizes as an epically wasted opportunity.
  • El Colombiano reports that the political movement launched by former Colombian President Alvaro Uribe and his supporters, the Democratic Center, convened in Santa Marta yesterday. Semana notes that while many analysts expected Uribe to announce his Senate candidacy at the event, it was much more subdued than anticipated.
  • The US Treasury added the Rastrojos, a Colombian drug gang, to its list of Specially Designated Narcotics Traffickers on Wednesday. InSight Crime suggests that this is a sign that the weakened group may be on its last legs.
  • In response to the release of a video apparently showing jailed ex-president Alberto Fujimori in good health, the former leader sent a letter from prison calling the footage a “trap” designed to hurt his appeal for a presidential pardon on humanitarian grounds, according to Peru21.
  • This week’s issue of the Economist offers an interesting analysis of potential obstacles to Peru’s economic growth, namely “overconfidence and complacency.”
  • Nearly a week after a bloody riot broke out in a prison near the Venezuelan city of Barquisimeto, the Venezuelan Prisons Observatory released a report on violence in the country’s prison system, finding that a total of 591 inmates were killed and 1,132 were injured last year.
  • Investigators in Brazil have found that the main cause of death in last weekend’s nightclub fire that killed more than 230 was inhalation of the fumes being emitted from the sound insulation used in the club after it was ignited, the AFP reports.
  • Argentina on Thursday rejected an invitation by the UK to participate in a meeting to address the Falklands Islands/Malvinas dispute because it would include representatives from the government of the islands. Clarin reports that Argentine officials maintain that only bilateral talks with Britain on the matter would be acceptable.
  • Prior to a Buenos Aires judge’s ruling this week which upheld Argentina’s decision to freeze $19 billion in Chevron’s assets at the request of Ecuador, the oil giant released a signed statement by an Ecuadoran ex-judge which may complicate the country’s case against the company in the future. In the affidavit, which has been posted on Chevron’s website, a former Ecuadoran judge claims that he was offered $500,000 to convict Chevron of polluting the southern Lago Agrio region from 1964 to 1992. Forbes has more on the affidavit, and what it could mean Ecuador’s attempts to seek payment for the damage.
  • Panama’s La Estrella highlights rumors that OAS Secretary General Jose Miguel Insulza is planning on stepping down from his post to run for a Senate position in Chile, where it is “practically confirmed news.”

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