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Venezuela’s National Nightmare is Over

Via the BBC:  Venezuela aims to end toilet paper shortage

Venezuela’s National Assembly has backed plans to import 39 million rolls of toilet paper, in an effort to relieve a chronic shortage.

Lawmakers voted to approve a $79m credit for the country’s ministry of commerce, which will also be used to buy toothpaste and soap.

The products are currently in short supply in Venezuelan shops.

The oil-rich nation relies on imports, but currency controls have restricted its ability to pay for foreign goods.

May I humbly suggest that sad policy isn’t working too well?

And, further, I don’t figure that the following hypothesis is correct:

President Nicolas Maduro, who won a narrow majority in April’s presidential elections, maintains that the country’s periodic shortages of basic goods are the result of a conspiracy by the opposition and rich sectors of society.

More likely, the problem is more along these lines:

analysts say that the government’s attempts to impose state control on the economy have created huge imbalances that have led to the shortages.

"Price controls, for example, act as a disincentive to local producers, forcing them to cut output," says the survey organisation Consensus Economics.

"The resulting scarcity forces up inflation, defeating the entire purpose of price controls in the first place."

Venezuela’s inflation is the highest in Latin America and is currently running at about 25%.

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About Steven L. Taylor
Steven L. Taylor is Professor and Chair of Political Science at Troy University. His main areas of expertise include parties, elections, and the institutional design of democracies. He is the author of Voting Amid Violence: Electoral Democracy in Colombia and is currently working on a comparative study of the US to 29 other democracies. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging at PoliBlog since 2003. Follow Steven on Twitter

Comments

  1. Brett says:

    Things are going to be ugly down there when PSVDA declines to the point where they simply do not have the revenue to funnel into vital imports without effectively shutting down oil production and losing the revenue stream. The company has been in decline for years.

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