Venezuelans queued on Friday to register for an electronic card system designed to end food shortages that have plagued the country – but which some fear may be the thin end of the rationing wedge.
The ID card, introduced this week, will limit Venezuelans to once-a-week shopping and will set off an alarm to halt any transaction if a purchaser breaks the rules. The government wants to prevent individual shoppers from “over-buying” in a country hit by acute shortages of basic items including milk, sugar and toilet paper. Critics say it is an admission of failure of economic policy in one of the world’s big oil-producing nations.
“The government needs to control the hoarders. They have made this worse. But if there weren’t shortages there wouldn’t be hoarders. We are trapped,” says Jose Diaz, a 65-year-old construction worker.
By keeping a record of what is purchased and limiting shopping trips, the electronic card is supposed to curb hoarding and prevent speculative shoppers from buying to resell at a profit. But the larger aim is to halt the huge outflow of food to neighbouring Colombia, where it sells for up to 10 times as much. It is estimated that almost 40% of Venezuela‘s food is transported illegally across the border.
According to the food minister, Félix Osorio, registering for the card will not be mandatory and regular users may still shop at the network of subsidised food chains. But as with many customer loyalty programmes, cardholders will benefit from even lower prices, extra offers and even enter a raffle to win one of 500 houses in Venezuela’s largest public housing programme.
The ID card, introduced this week, will limit Venezuelans to once-a-week shopping and will set off an alarm to halt any transaction if a purchaser breaks the rules. The government wants to prevent individual shoppers from “over-buying” in a country hit by acute shortages of basic items including milk, sugar and toilet paper. Critics say it is an admission of failure of economic policy in one of the world’s big oil-producing nations.
“The government needs to control the hoarders. They have made this worse. But if there weren’t shortages there wouldn’t be hoarders. We are trapped,” says Jose Diaz, a 65-year-old construction worker.
By keeping a record of what is purchased and limiting shopping trips, the electronic card is supposed to curb hoarding and prevent speculative shoppers from buying to resell at a profit. But the larger aim is to halt the huge outflow of food to neighbouring Colombia, where it sells for up to 10 times as much. It is estimated that almost 40% of Venezuela‘s food is transported illegally across the border.
According to the food minister, Félix Osorio, registering for the card will not be mandatory and regular users may still shop at the network of subsidised food chains. But as with many customer loyalty programmes, cardholders will benefit from even lower prices, extra offers and even enter a raffle to win one of 500 houses in Venezuela’s largest public housing programme.
Outside the Bicentenario megastore in Plaza Venezuela, a middle-class neighbourhood in the capital, Caracas, the line stretches for several blocks. Some of the people here have come to register for the new system; others simply want to buy food. Most of them have already been waiting for several hours. They are desperate over what they say is a lifetime spent standing in queues. The card, they hope, will put an end to a perverse cycle they say they cannot bear for much longer.
“This card will take the edge, the sense of panic, out of shopping. If we know that we will find rice or milk next time we come we don’t need to stock up and so there will be more to go around,” says Oscar Romero, as he orders a cup of coffee from a street vendor to make the wait more pleasant.
After queuing for almost three hours, Pascual Sandoval is just three blue plastic chairs away from registering for the “card for secure supply” as it is being called. Inside, government employees will ask him for his name, home address, job and salary, and if he owns a home or vehicle. They will even scan his thumbprint. “It is a needed step to stop food contraband and speculators who have bled us dry of food,” says Sandoval, a retired stonemason.
Like Sandoval, Romero blames the shortage of basic shopping items on speculative shoppers who buy milk, sugar and toilet paper at the subsidised store to resell in their street stalls at three times the price.
His fellow queuers share his enthusiasm for the shopping card, but are not as confident that it alone will solve the shortages or the ensuing long lines. For many the root causes run deeper. Critics say the new system will do little to galvanise the productive parts of an economy in which people see no point in producing goods that are then subject to price controls and end up being loss-making.
Asdrúbal Oliveros, an economist, argues that the government should use the new system to slowly lift the price controls while maintaining subsidies for the poorest sectors of society by way of direct cash handouts through debit cards that cover only food purchases.
“The mistake of these price controls is that the subsidy doesn’t go directly to the families and instead it subsidises the product. This breeds scarcity, contraband and the long queues. This appears to be the government’s resistance,” said Oliveros, who is director of Caracas-based consultancy Ecoanalitica.
Fiercer critics say the card is the most blatant sign that Venezuela’s economy has spiralled out of control. For some, the recent move is nothing short of a Cuban-style rationing card that will sooner or later hamper citizens’ economic freedoms.
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