Venezuela announces measures to tackle food crisis
In an attempt to tackle the ongoing food crisis in the country, the Venezuelan Government has imported thousands of tons of basic foodstuff and would begin distributing them through communal councils. Food Minister, Rodolfo Marco Torres, stated that 70% of the country's food would be supplied in this way. The Government has purchased 115,000 tons of basic goods including rice, sugar and grains.
Venezuela and inflation
Venezuela's inflation began in 1983 when the US artificially collapsed the world oil prices. This became possible after the CIA Director Bill Casey cut a deal with Saudi Arabia. The deal resulted in an influx of cheap oil from Saudi Arabia. Oil exporting countries like Venezuela were adversely affected by this as their economy collapsed and the inflation skyrocketed.
Hugo Chavez tries to bring down Venezuela's inflation
Hugo Chavez took on as Venezuela's President and reduced inflation by imposing control mechanism on 'capital flight'. Capital flight meant people transferring their money out of the country in order to protect their finances against taxes. As a result of the capital flight, the exchange rate got even worse and it took a toll on Venezuela's currency though the inflation reduced by 20%.
The 'inflation depreciation spiral' in Venezuela
Chavez has set up CADIVI, a state-run bureau that granted the citizens a limited number of American dollars at low rates. However, the dollars could only be bought when travelling or to pay-off foreign debts. This led to a large exploitation of the system and the black-marketing of the dollars. The economic bubble led to smuggling and the 'inflation depriciation spiral'.
Maduro inherits Venezuela's crisis as legacy
In 2013, Nicolas Maduro inherited the Venezuelan Presidency from Hugo Chavez, who died of cancer. Since 2014 he faced a number of anti-government protests which he dismissed as US conspiracy to overthrow him.
Loop within the economic bubble leading to shortage
The shortage of commodities was because of the high exploitation of CADIVI. A major portion of Venezuela's goods were exported, smuggled to countries like Columbia. The goods were then sold for American dollars. The smugglers then exchanged the US dollars in the Venezuelan black market at a tenfold profit. The number of smuggled goods was so high that it created a shortage in Venezuela.
Venezuela's President Maduro declares emergency
On 13 May, a state of emergency was declared in Venezuela by President Nicolás Maduro. The state of affairs looked sombre as the Government was unable to import basic food items "like milk, flour and eggs, leaving many supermarkets with empty shelves." Tomas Guanipa of the opposition party said the measure was taken by Maduro because he was scared of being 'recalled'.
Venezuela announces measures to tackle food crisis
In an attempt to tackle the ongoing food crisis in the country, the Venezuelan Government has imported thousands of tons of basic foodstuff and would begin distributing them through communal councils. Food Minister, Rodolfo Marco Torres, stated that 70% of the country's food would be supplied in this way. The Government has purchased 115,000 tons of basic goods including rice, sugar and grains.
Venezuela: Army to control food production and distribution
The Venezuelan Government under Nicolas Maduro has ordered the army to oversee food production units and processing plants to co-ordinate food supplies in the country. The army has already taken over 5 major ports in the country in order to manage food imports and distribution networks. The Defence Minister would head the operations under the Government's newly announced Great Mission of Sovereign Supplying policy.
Venezuelans flock to Colombia to buy food, medicines
Venezuelan and Colombian officials opened their national borders so that thousands of Venezuelans could go to Colombia to buy essential supplies including food and medicines. Colombia's Defence Minister Luis Carlos Villegas said Colombia "made a great effort to have sufficient supplies" for the Venezuelans. Colombia's foreign ministry stated that 35,000 Venezuelans entered "in an orderly manner, under conditions of security."
