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Venezuela's Largest Pharmacy Chain Execs Jailed For "Provoking The People With Economic War"

Because admitting that the Venezuelan utopia is failing due to the policies of Hugo Chavez' "socialist revolution" would leave the thread by which Venezuelan socialism hangs ready to snap, President Maduro has shifted the blame for hyperinflating-price-based staples shortages and food lines from a cut in oil revenues to the dastardly capitalists. As The BBC reports, Maduro ordered the arrest of executives of one of the country’s largest pharmacy chains for allegedly creating shortages of everything from diapers to heart medicine. A triumphant information minister proclaimed, "we came, we normalized sales, we summoned the owners, we arrested them and they're prisoners for having provoked the people with economic war."

 

And Bloomberg reports,

Venezuelan President Nicolas Maduro ordered the arrest of executives of one of the country’s largest pharmacy chains for allegedly creating shortages of everything from diapers to heart medicine.

 

Price regulators made a surprise inspection at a store on Sunday and opened a case against Caracas-based Farmatodo C.A., which operates almost 200 drug stores across Venezuela and Colombia, the company said in a statement published by Maracaibo-based newspaper Panorama. Police then invited executives of the company to give statements, the company said.

 

Chief Executive Officer Pedro Luis Angarita and two other top managers of the closely held company remain under arrest without access to lawyers, said a personal assistant to one of the executives, who asked not to be named because of the sensitivity of the issue. An Information Ministry spokesman confirmed executives were detained on economic crime charges, without giving details.

 

“We discovered a famous chain of shops conspiring against the people,” Maduro said in a televised address on Feb. 1.

 

...

 

“I’m not sure the government is aware of what it is starting,” Freddy Ceballos, president of the Venezuelan Pharmacy Federation, said today in a telephone interview, adding that Farmatodo had been working with the government to improve distribution. “This is a threat to the private sector, even to those who are working with the government.”

As The BBC added,

Mr Maduro said the owners had reduced the number of employees working on cash tills in order to create queues and "annoy the Venezuelan people".

 

He has accused Venezuela's business elite of boycotting his government.

 

The opposition blames the socialist policies of the past 16 years for the worsening economic crisis.

 

"Yesterday we detected that a famous chain of stores was conspiring, irritating the people," said Mr Maduro.

 

"We came, we normalized sales, we summoned the owners, we arrested them and they're prisoners for having provoked the people with economic war," he said.

And it appears the people are losing patience with nirvana's arrival...

A week ago, thousands of Venezuelans attended an opposition march in Caracas, banging empty pots to highlight what they say is the shortage of many staple foods.

 

Demonstrators also voiced discontent at high inflation, crime and long queues.

 

Many analysts say currency controls that restrict the availability of dollars for imports play a key role in creating a scarcity of many items.

 

But President Maduro is adamant that many businessmen are colluding with the political opposition to oust his government.

 

He accused four supermarket chains of hoarding goods and smuggling items out of the country.

 

"Those who use their stores to hurt the people will pay with time in prison," Mr Maduro told a group of his supporters.

It appears US firms remain at risk...

 

But as we concluded previously, this move today appears yet more escalation by Maduro in his desperation...

For many years, the Venezuelan government was able to mask the failures of Hugo Chavez’ “socialist revolution” somewhat with the help of the country’s oil revenues. However, it should be remembered that shortages of basic goods in Venezuela are nothing new; the first press reports appeared about two years ago, when oil prices were still quite high (see also this late 2013 article of ours: “The Hygienically Challenged Crack-Up Boom”). As we quoted from a press report on that occasion, some Marxists – as long as they are members of the ruling class – seem actually not overly worried about scarcity:

 

“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.”

 

Of course it was easy to make such quips, callous though they may be, back when the hugely popular Hugo Chavez was still around and able to distribute large oil revenues with both hands. The situation is a lot more difficult for Nicolas Maduro, who is probably slowly but surely getting worried about the potential for a counter-revolution (there has already been intermittent unrest in Caracas – and at the time the bolivar’s black market rate was still 85 to the dollar instead of 185).

 

Russia’s economy is likewise suffering from the decline in oil prices , but its government has a lot more breathing room in terms of debt and foreign exchange reserves and would be able to greatly help its economy merely by getting serious about tackling corruption.

 

Maduro has a much bigger problem, as he would essentially be forced to abandon the very ideology he so wholeheartedly supports if he wants to turn the floundering ship around. He does have one advantage over Putin though: he has very little to lose anymore in terms of his approval ratings. He probably must worry about his party comrades though, many of whom will be reluctant to abandon the late and great Hugo Chavez’ “socialist achievements”. It will be interesting to see how things will play out, in light of Maduro lately adopting steps he would never have taken a year ago. Still, given the government’s debt situation and Venezuela’s monetary statistics, a complete loss of confidence in the currency remains a very real possibility. In other words, the thread by which Venezuelan socialism hangs may soon snap.

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