Thursday, February 21, 2008

Chavismo corruption and incompetence in a single number

Tal Cual offers us today an article about the chicken production in Venezuela and the forecast if prices are not increased from their fixed value. It also says that chicken is pretty much sold everywhere above 50% its fixed value and no one cares, only too happy that they are finding chicken when so many other things are missing. Still, unless government does not allows a realistic price, within 6 months chicken will join the growing list of chronic food shortages.

But I digress, the real number of this article that will interest the readers of this blog is the freight cost of a ton of goods that goes through Puerto Cabello, the main harbor of the country, the one through which more than half of the imports of the country come through. Well, the cost for importers to go through Puerto Cabello is 150 USD, whereas the Colombian importer that goes through Cartagena pays only 40 USD. That is right, it costs you three times more to import through Puerto Cabello than to import though a Colombian harbor, geographically equivalent to Venezuelan harbors.


Very simple and I can vouch personally for that: corruption and inefficiency.

There are so many lame permits required, so many controls to verify CADIVI so as to pay the bills later, so many opportunities to get a fast buck by so many corrupt officials that getting your stuff out of Puerto Cabello is an ordeal. And Tal Cual does not quantify the direct cost of corruption; the numbers reported are those who come from unnecessary permits and the delays that dramatically increase the storage costs that you have to pay. If you add corruption costs (usually included in the bill of your custom agent who handles discretely these delicate matters, it is all a big mafia) the costs per metric ton could easily double the already high 150 USD. Of that I can vouch personally. I cannot tell you how often we had merchandise stuck in Puerto Cabello for months, with all permits in hand, when in normal times it took no more than two weeks to clear customs. The excuses range from “the inspector did not come this week” meaning a nice present might make him hurry up, to “I want to see all the originals” which means that if your business is, say, 4 hours form Puerto Cabello you have to waste at least one to two days of your time to carry all the originals whose permits appear anyway in official computer pages.

Now, if you are importing a ton of flat screen TV, you can easily absorb the cost. But when you import a ton of corn for animal feed?

So, guess what? Who pays the final costs? The silly chavista (and anti Chavez) consumer who either must buy above the price or face an empty shelf. There is no mystery on why there are food shortages in Venezuela. And there is no mystery on why the situation will become worse and worse unless chavismo polices in favor of corruption and against private business do not change dramatically. No fat chance of this happening any time soon.

Thus you have it here, in a single number an accurate representation of the cost of incompetence and corruption. And I am not even talking about these costs once your merchandise has left Puerto Cabello.

-The end-

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