has anyone ever heard of this? if so what do you think can be done to solve this?

Question

CARACAS, VENEZUELA — Police swooped down last week on a grimy central market district, forced open a warehouse and seized 7 tons of a white substance. It wasn't cocaine. The contraband was sugar, and the seizure of at least 184 tons nationwide showed how President Hugo Chavez's efforts to remake the economy are fraying at the edges.

Chavez has imposed price controls on a variety of goods, such as 29 basic food items produced in Venezuela including beans, cooking oil, meat and chicken. He also has imported such goods as Uruguayan pasta and Brazilian pork that are resold to the poor at greatly reduced costs, thanks to government subsidies.

But mismanagement, rampant corruption and scarcities have cut into Mercal's operations. At the same time, low prices set by the government have caused manufacturers and other suppliers either to cut production or divert output to an enormous black market.

At the same time, the flood of cash washing over Venezuela from oil sales has caused demand for all goods — watches and whiskey, detergent and SUVs — to climb, adding inflationary pressure.

The reigniting of inflation threatens the poor constituency Chavez is trying to help, economists say.

Meat disappeared for several days after slaughterhouses shut down, saying they couldn't afford to process meat at the prices set by the government.

A sugar industry source said production had fallen because prices the industry received were lower than farmers' cost of production and because the government-sponsored takeover of sugar cane plantations had cut productivity

In the poor Caracas suburb of Catia on Saturday, sugar and chicken were being rationed at a Mercal shop for the first time in a week. "I came in the morning and waited two hours for milk. Now I'm back in line waiting for chicken, one to a family," said Marietta Abreu, as she stood with 100 other customers.

In the Quinta Crespo market and in the informal stalls that surround it, sugar and tuna were being sold under the table for three times the government-mandated prices, eggs and meat for twice the prescribed prices.

"The government wants all the power, but they can't control how we think. This is a free country," said a street vendor who was selling black beans at twice the regulated price of 45 cents a half-kilo.

Answer 1

They have brought this upon themselves. The best solution is to let them suffer the consequences of their actions. The mobs in that country have elected a dictator that has promised to loot the corporations and share the loot with the mob. So far he's living up to his end of the bargain.

The economic laws of supply and demand are no more repealable than the law of gravity. Everytime a government tries to control prices it creates an unsustainable imbalance between supply and demand, and diverts goods from the government regulated economy into the "black market" where prices are set by the laws of supply and demand.

It's why the soviet union didn't work, Cuba is a basket case, people are starving in Korea and Zimbabwe, and its not going to work for Chavez. Eventually he'll be dragged into the street and killed by the mob that put him in power to start with. The more the government regulates a sector of the economy the further out of balance supply, demand and price become. Just look at the heavily regulated health care industry in the U.S.

Answer 2

When price don't clear markets, then some other mechanism takes over. Price ceilings can create large shortages. Shortages tend to lead to black market activity.

If the government charges $1 for a pound of sugar, but only a quarter of the people wanting to buy sugar receive it. There are people who would by sugar for $5 a pound. If you can get sugar to those people at the higher price, you can make a large profit. This is how the black market forms. (All prices are fictional for this example)

Anyway, this is normal and predicted by economic theory.

Answer 3

Looks like they have gone the American way, except with more noble reasons. Not like the American Sugar-beet lobby. So what part of it do you see that needs solving? It sounds like an economy trying to keep jobs at the expense of prices. Sound familiar? Except they have less worldly clout to throw around and things are becoming more globalized. To solve, work WITH the world markets and look to where you can improve. See where you are competitive, and make yourself more competitive there, and if you aren't competitive in sugar, let that industry die. Better a quicker death than making it long and painful.

Answer 4

Take a look at the history of Cuba, Haiti, Jamaica, and just about every African country over the past 20 years. Venezuela's future does not look good.

Answer 5

The mysterious loss of life of Leroy Jackson, a Navajo environmentalist. He were lacking for 8 days in 1993 while the police have been given an nameless tip that they could desire to verify right into a van parked up interior the mountains. they got here upon Mr. Jackson's physique. on the time of his disappearance, he became on his thank you to Washington D.C. to 'confront' the Clinton administration on the planned logging of a mountain sacred to the Navajo human beings and that on the mountain lived owls that have been on the Endangered Species record. He never made his trip spot and not in any respect spoke of as his spouse as to the place he became at. He were receiving threats and left out them. His spouse claimed the case became never investigated precise and his loss of life became spoke of as an over-dose of drugs which his acquaintances and relatives and any of his linked brushed off.

Answer 6

another attempt an "equal society" ... where everybody is equally poor