FX.co ★ Venezuela running out of food

Long lines for basic grocery, permanent food shortages, a thriving black food market etc. are taking place on contemporary Venezuela, abundant in natural resources. According to the IMF, the country's economy shrank 10% in 2015, the sharpest contraction in the Latin America. For three years in a row, Venezuela has reported the highest inflation rate in the world. A slump in oil prices and weakness of the authoritarian government brought the country on the verge of collapse. The emergency regime is announced nationwide. Hungry riots flared up in the capital city.

Venezuela has been suffering food shortages for two years in a row. Government-run grocery stores such as Mercal, Bicentenario, and Pdval sell food stuff at so-called fair prices. Hungry citizens are forced to wait for 5 hours in lines. They endure the presence of the Venezuelan military, who ensure that they don't buy more than they are allowed.

However, standing for hours in a line does not guarantee that food and basic household items will be bought as the supermarkets cannot provide people what they need. Making things worse, there is little additional commerce in the country. So dealers buy the same products in government-run supermarkets and sell them in the black market at steep prices which are 3-10 times higher.

Oil revenues provide Venezuelawith 95% of its annual budget. So a slump in oil prices came as a blow to the economy. In January 2016 oil sales brought revenues of no more than $77 mln versus $3.3 bln 6 years ago. Venezuela's fiscal revenues plummeted by 4,200% in 6 years. In February 2016, President Nicolas Maduro ordered to raise gasoline prices for the first time in 20 years, and devalued the nation's currency in an attempt to raise revenue. In April, a workweek for public employees was cut. The government restricted electricity supplies to the population due to the energy crisis.

Besides, the country is facing political turmoil as the authorities are not able to tackle thorny problems.

On June 2, hundreds of furious Venezuelans held protests against the worsening economic crisis. The protesters blocked roads in Caracas, they were chanting “We want food!” and were carrying placards with slogans “We are hungry and tired!” and “Maduro away!” The crowd was met by National Guard troops and police who fired teargas at protesters. The massive strike was brought to a halt. However, clashes still occur in city streets at times.

According to the statistics, 87% of Venezuelans have too low income for keeping a family. Things will likely get worse, unless oil prices miraculously skyrocket. By one estimate, the available petrodollars to buy food and medicine will shrink in 2016 by two-thirds.