With Venezuelan Cupboards Bare, Some Blame Price Controls

[Zorro]

By 6:30 a.m., a full hour and a half before the store would open, about two dozen people were already in line. They waited patiently, not for the latest iPhone, but for something far more basic: groceries.

“Whatever I can get,” said Katherine Huga, 23, a mother of two, describing her shopping list. She gave a shrug of resignation. “You buy what they have.”

Venezuela is one of the world’s top oil producers at a time of soaring energy prices, yet shortages of staples like milk, meat and toilet paper are a chronic part of life here, often turning grocery shopping into a hit or miss proposition.

Some residents arrange their calendars around the once-a-week deliveries made to government-subsidized stores like this one, lining up before dawn to buy a single frozen chicken before the stock runs out. Or a couple of bags of flour. Or a bottle of cooking oil.

More at: http://www.nytimes.com/2012/04/21/world/americas/venezuela-faces-shortages-in-grocery-staples.html?src=mv&ref=world

[Mojorabbit]

1. I have read several articles over the years

that state after the govt took over the companies, the production fell. I would love to see some concrete proof of this. I don't doubt that it could happen esp at first, but it would seem over time that production should reach a base line to where it was before the takeover.

[COLGATE4]

2. Production can hardly return to the baseline

before expropriation when the prices are set so low as to make production unprofitable.

[parkia00]

3. State Owned Enterprise Seldom Can Be Competitive

Unfortunately it has been proven time and time again from ex-Soviet factories after the break up of the USSR to China after they opened up to foreign investment in the 80's. Taking over companies is not a guaranteed win for any country's economy and population especially if it was not thought out properly and especially if such activities were done quickly in order to gain political points and give the illusion that the government was doing something about the evil capitalist. Zimbabwe did the same thing with white owned farms and the country changed from a food exporter to a food importer. When the ownership of the farms were forcibly changes, the new landlords many of whom had less farming skills, access to equipment, access to farming consumable like fertilizers and pesticides mostly due to the lack of funds and you have a recipe for disaster. Of course the trickle down effects from such activities will only be felt years down the road. It's not so straight forward as some people would like to believe.