How to bring a country down … and run it dry

Funny that a socialist like Venezuela’s president Nicolas Maduro should think like a French queen. Reportedly, Marie Antoinette said when told that there was a bread shortage: “let them [the French] eat cake.” Well, we know how things worked out for her: she was beheaded in 1793.

A former bus driver, President Maduro probably thought: if they can’t have beer, let them guzzle soft drinks. In early May 2016, Venezuela’s largest beer and soft drinks company Empresas Polar, which produces four in five beers consumed, was still bottling soft drinks, thanks to there being some sugar left, but had to shut down its four breweries, blaming the government, which hasn’t allocated the dollars the company needs to pay for imported raw materials such as malted barley.

Venezuela’s two major brewers have had to contend with declining beer output. It has dropped from 22 million hl in 2013 to 19.7 million hl in 2015. Because of the plant closures, workers are hit too. About 10,000 of Polar’s workers had to be sent home.

The country’s 30 million people have withstood shortages of food and medicine, their daily lives punctuated by rolling power blackouts. Now, beer is disappearing from the shelves.

Mr Maduro, who frequently accuses the privately owned Polar of waging an economic war against his government, warned that closed factories could face seizure by the state. According to media reports, this isn’t an idle threat. Reportedly, the government has already taken over 1,200 companies.

“Plant closed, plant reclaimed, a plant that we’ll put into production, with the law in our hands,” Mr Maduro said in a televised speech recently.

True to his words, on 2 May 2016 government inspectors, accompanied by National Guard troops, arrived at two of Polar’s plants to determine if there really was no malted barley to brew, as the company asserted when it closed them. The visit had a menacing air as some of the soldiers carried standard-issue long guns, media say.

As a consequence of forex drying up, Polar said its foreign suppliers are owed more than USD 380 million, with many having awaited payment for as long as three years. Boortmalt, a Belgian maltster, is among the suppliers that couldn’t wait any longer.

Yvan Schaepman, Boortmalt chief executive, was quoted as saying that his company hasn’t been paid the millions of dollars it is owed, and has stopped supplying Polar.

Venezuela has one of the world’s largest reserves of oil and its economy is heavily dependent on energy exports. The country has, therefore, been rocked by sagging international oil prices. Observers say that there could be a change in government … provided there is no rise in oil prices.