Venezuela’s President Maduro Assures Food Shortages Are Due to “Economic Warfare”

Punto Fijo, May 12^th, 2013 (Venezuelanalysis.com) – During a speech on Saturday, Venezuelan President Nicolas Maduro blamed food shortages on an “economic war” from the Venezuelan private sector, and assured the government is taking measures to resolve the issue.

Shortages of basic food items have been felt across the country in recent months, with Venezuela’s Central Bank reporting for the month of April the highest level of shortages since 2009.

Economists cite a lack of foreign exchange, price controls, and a fiscal deficit as the primary causes for the shortages, while the government cites high levels of consumption and economic sabotage from Venezuela’s private sector.

“We have many indicators that [Venezuela’s largest food company] Polar has been reducing their production and hoarding products in order to create scarcity,” said Maduro on Saturday.

Maduro demanded to know why the company has been reducing their production and publically called on the owner of the company, Lorenzo Mendoza, to a meet with him on Tuesday to explain the situation.

“He has to demonstrate that they are producing in line with the law and the constitution, because otherwise we will take firm action,” he said.

The government has sought to resolve some shortages by increasing food imports from Mercosur countries like Brazil.

Food Minister Felix Osorio assured on Saturday that Venezuela would be financing the import of 700,000 tons of food from Mercosur countries in the coming days.

President Maduro’s recent visit to several Mercosur countries included the signing of several agreements to import food from within the trade block, as well as to acquire aid in improving Venezuela’s domestic production.

“Our goal is to produce the food that we consume and transform Venezuela into an exporting powerhouse. To do that we are going to try new models and methods of production with the help of Brazil,” said Maduro while in Brazil on Thursday.

Maduro announced that Brazil would help Venezuela set up various food and fertilizer plants in Venezuela, but in the short term Venezuela will import a greater amount of food from its southern neighbor.

Opposition representatives assure the shortages are due to a lack of foreign exchange, a product of excessive spending in 2012 that left the government without enough dollars to meet the growing demand for imports.

But the government claims that the dollars that are approved for food imports are being stolen by private sector speculation.

“The government has to be very careful and evaluate how many millions of dollars are being given to the private sector to import food because we are confronting an economic war,” said Maduro.

“It is painful to give the country’s foreign exchange to a group of shameless companies that steal people’s money,” he said.

Government officials said that there would be dialogue with the Venezuelan private sector in order to combat the problem.

Representatives from the private sector point to government price controls and the bureaucracy that surrounds currency exchange controls as the root of the problem.

The government has said it is working to speed up the process for companies to access the foreign exchange they need to import goods.

“We are going to discuss the problem of foreign exchange and price controls this week and we hope to give a report to President Maduro on the measures needed to resolve this problem,” said Food Minister Felix Osorio.

The Venezuelan government maintains price controls on a range of basic goods in order to assure the poorest sectors can afford them.

Many of these prices have not been adjusted for more than a year, creating complaints from the private sector that claim it is increasingly unfeasible to produce the regulated goods.

The price controls in Venezuela also have created a problem of smuggling food into neighboring Colombia where it can fetch higher prices.

Minister Osorio assured, however, that the problem would be solved in the coming months.

“We will be resolving the problem in less than 60 days. A dialogue has been opened with the private sector,” he said.