Venezuela Scrambles for Food Despite Oil Boom

Venezuelan President Hugo Chávez has gained both prestige and notoriety for his use of oil diplomacy throughout Latin America. An oil boom combined with Chávez’s socialist policies has had two consequences: a surge of imported luxury goods and a shortage of food staples. According to the research group Datanalisis, as much as a quarter of the supply of food staples is “disrupted,” and any stock must be rationed. Critics point to Chávez’s price controls as creating disincentives for producers who cannot make profits and fear government seizures. The government, meanwhile, claims the media overstates the problem and defends its policies as increasing the purchasing power of the poor. Meanwhile, Chávez’s constituents are expected to pass a referendum that will eliminate the presidency’s term limit. Mass food shortages have the potential to undermine Chávez’s goal of “21st century socialism,” writes Rory Carroll for the Guardian. Many in the world – including Chávez’s aid recipients in South America and critics in the US – watch closely as an economics lesson unfolds in Venezuela. – YaleGlobal