(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
Venezuela's government is known for its state-must-do-it-all mindset, inherited from late President Hugo Chavez and his radical followers, known as Chavistas. But late last week, the notoriously inefficient government went above and beyond to shine its populist credentials: It stepped right into Venezuelan bathrooms.
On Sept. 20, President Nicolas Maduro and a new economic panel ordered national price regulator Sundecop to "temporarily" seize plants owned by Manufacturas de Papel, or Manpa, the company that supplies 40 percent of the country's demand for toilet paper and personal-care paper goods. Their reasoning? To oversee production, because consumers can't seem to find enough rolls of toilet paper.
It's not just bathroom tissue that's lacking: In recent months, food items such as cooking oil and powdered milk have nearly disappeared from store shelves. But even after a decade of price controls, foreign-exchange restrictions, runaway inflation, currency devaluations, blackouts and takeovers of more than 1,000 companies or their assets, the government still claims the private sector is at fault for the deficiency in consumer staples. The Manpa asset grab came a week after Maduro introduced the new regulatory committee, which will address product hoarding and other abuses that he blames for missing goods.
Vice President Jorge Arreaza spoke the party line in a recent appearance, when he blamed consumer-goods shortages on "an ongoing economic war" orchestrated by Maduro's enemies. Food Minister Felix Osorio chimed in: "There are some incidental production failures." But he added that "an economic coup" was also in motion.
Alert Venezuelans aren't buying this. When Commerce Minister Alejandro Fleming tweeted on Sept. 20 that Maduro had "ordered the Superior Body for the Defense of the Popular Economy to temporarily seize Manpa," Ricardo Sevillano, of Maracay, responded with a key question directed at Fleming and Maduro: "Will you run it into the ground as you've done with all the other companies you have seized?"
In May, Fleming said that while Venezuela's approximately 28.5 million people typically go through 125 million rolls of toilet paper every month, rising demand called for an additional 40 million. That's why the government decided to import 50 million rolls that month, trying to satisfy irate consumers who regularly stand in line outside stores _- which do things like limit purchases to 12 rolls per person. (Lovers of bathroom reading material, take note: A lack of foreign exchange has also prompted paper shortages for books and newspapers.)
Things have gotten so bad that Venezuelan Jose Augusto Montiel developed a crowd-sourced, Google Maps-based Android app and a website, Abasteceme ("Supply Me"), that consumers can use to track down stores carrying toilet paper and other scarce products. Meanwhile, late last week the government announced a supervised sale of 21,140 toilet paper rolls seized from manufacturers or distributors, which the government has often accused of hoarding.
Not everyone thinks these shortages spell bad news. Planning Minister Jorge Giordani, an avowed Marxist, famously quipped in 2009 that "socialism has been built based on scarcity." Elias Eljuri, head of the National Statistics Institute, said in late May that toilet paper scarcity showed "Venezuelans are eating more." He quickly became the — pardon the pun — butt of jokes on Twitter. Comedian Andres Schmucke tweeted a tongue-in-cheek view on May 23: "According to Elias Eljuri the toilet paper shortage happens because people are eating more. Man, us comedians will be out of a job."
A frustrated Foreign Minister Elias Jaua only made things worse when he admitted the government "had work to do" to overcome shortages and asked: "Do you want to have the fatherland or do you want toilet paper?" Critics tweeted their disapproval using a fitting hashtag, #LosChavistasSeLimpianElCuloConLaPatria (#ChavistasWipeTheirBehindsWithTheFatherland), which was already being used by anti-Chavistas.
Potty jokes aside, if history is any guide, Venezuelans are in deep trouble. When Chavistas seize a company in a bid to safeguard the public interest, it is rarely temporary. What's more, the state pays owners no more than book value for their assets, and Venezuela's government oversight often leads to corruption and mismanagement.
Those curious about where the latest takeover will lead should examine Hugo Chavez's nationalization of paper company Venepal eight years ago (renamed Invepal by Chavez). One of the first companies seized by Chavez, Invepal still suffers from production problems, its output numbers remain secret, and it relies on the state to cover its recurring losses. As Venezuelan economist Jose Toro Hardy aptly put it in a Sept. 25 tweet referring to the state's damaging role: "Nothing is more dangerous than mixing incompetence with ideology."
Juan Pablo Perez Alfonso, a famed Venezuelan oil minister and a founder of the Organization of Petroleum Exporting Countries, warned in the 1970s that "oil will bring us ruin," and he famously dubbed crude "the devil's excrement." So much of the devil's excrement and so little toilet paper seems to be Venezuela's latest version of hell.
_ Raul Gallegos is the Latin American correspondent for the World View blog.