Published On: Mon, Feb 9th, 2015

Rich In oil, Venezuela is now poor in most everything else

venezuela-economy_customCARACAS - Simon Nobile, 72, runs the Capri pasta factory in the capital Caracas, which was founded by his Italian-born father in 1940. Capri’s two plants crank out 11 million pounds of pasta per month.

They could produce nearly twice that much. However, Nobile says a government policy designed to help the poor forces him to sell half of his inventory for just five cents a pound.

“There is no incentive because price controls mean that you lose money. So the more you produce, the more money you lose,” he says.

Another headache is securing the grain to make pasta, says Angie Mendible who works in Capri’s import department. Venezuela does not produce wheat.

Even so, Mendible says that each time the company wants to buy a shipment from the U.S. or Canada, it must first apply for a government certificate stating that … Venezuela does not produce wheat.

“It takes 35 days to get this certificate,” Mendible says. “Then we have to apply for permission to buy U.S. dollars. That can take another 90 days.

Venezuela is facing a major economic crisis that continues to worsen. The country is hugely dependent on oil exports, and prices are now less than half of what they were last summer.

The good news is that subsidized gasoline in Venezuela costs less than two cents a gallon, the cheapest in the world.

The bad news is that almost every other part of the economy is in trouble. There are shortages of many basic goods and supermarket shelves are often empty. Imports have been slashed. There’s no official inflation rate, but most estimates put it 50 percent a year or higher.

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