With even toilet paper scarce, Venezuelan president warms to business

CARACAS Wed May 22, 2013 10:10am EDT

CARACAS May 22 (Reuters) - A Venezuelan supermarket puts a stack of toilet paper on its shop floor, and desperate consumers snatch it up within five minutes. A woman's voice over the loudspeaker reminds shoppers each person can only buy four packages.

Few seemed convinced by the government's promise just days earlier that the oil-rich South American nation would promptly import 50 million rolls.

"It's a sad moment when a rich country like Venezuela reaches this situation," said Yenny Caballero, waiting at a check-out line at a store in an upscale part of the capital. "These are basic products that everyone should be able to buy."

The scramble for toilet paper has become the most distressing example of nagging shortages of everything from meat and chicken to flour and cooking oil in this oil-rich South American nation.

With shortages now affecting close to 20 percent of basic consumer goods, socialist president Nicolas Maduro has agreed to work with Venezuelan business leaders that government for a decade has passed off as right-wing conspirators.

Maduro last week met with billionaire Lorenzo Mendoza, head of Empresas Polar, which is the country's largest food and beer-maker. The government wants Polar to boost production of staples such corn flour used for typical Venezuelan "arepa" pancakes.

In another sign of the rapprochement, the hallways of the finance ministry for the first time in years are filled with businessmen in sharp suits. Many carry folders stuffed with requests for greater flexibility in the currency control system and an easing of price controls.

"We've entered a phase of creating closer ties with the private sector, without ignoring the new socialist economy," said Finance Minister Nelson Merentes, following a meeting with business leaders.

The government says the toilet paper shortages, like others, are the results of panicked buying and unscrupulous merchants hoarding the goods to artificially inflate prices.

Opposition critics say the problem is caused by the currency controls, created a decade ago by late socialist leader Hugo Chavez, and years of nationalizations that weakened private industry and left businesses unwilling to invest.

The government is still struggling to provide sufficient hard currency to businesses that import staple products, meaning the shortages could drag on in the coming months.

Shoppers say their only choice is to buy up household basics as soon as they appear.

"There are some thing that I can go without, but not toilet paper, soap or toothpaste, so I have to run around the city to find them," said Katty de Colina, a housewife in the western city of Paraguana.

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