Archive for June 29th, 2010

Venezuelan Government regulates street vendors and their prices. Next: The Buhonero Police?

June 29, 2010

The ability of the robolution to amaze and awe is truly remarkable. Bizarre has now become a normal word in Venezuela as the Chavez Government does nothing that could be construed as being normal.

Take the term “informal” workers. They represent the more than half of the Venezuelan population who have casual jobs, selling stuff in the streets and trying to make a living. Nothing organized or regulated about them. Periodically, the Government tries to move them from one place to the other, they are banned from certain places, but somehow they survive, resurfacing somewhere else. Informal workers, called “buhoneros’ in Venezuela, used to be pro-Chavez, but they seem to support him less and less. I tried to depict some of their activities and smarts in the reappearance of Oligarco Burguesito, who met Nero Buho the street vendor to talk about the end of the swap market.

But Nero’s life, if he existed will become rougher starting today, as the Government issued a decree, essentially forbidding that street vendors sell foodstuffs at a price different than the regulated price and as long as they maintain the required hygiene and health standards necessary.

Moreover, these “informal” workers will have 30 days to comply with the decree and those found to be in violation of the decree will have their merchandise confiscated.

Where do I start on this? It has so many weird edges that it is actually quite hard to know the beginning. I have a thousand questions. For example, who the hell is going to supervise this? Will Chavez create the “Buhonero Police” to check it all out?

But even before that, where do you find the street vendors? I mean, these are street vendors, they are all over the place, do they have to register now? Doesn’t that turn them into some sort of “formal” workers? What if they move from one place to the other?

But what happens, for example, if one of these street vendors barters rather than sell one kilo of merchandise for another? Does this apply to fair pricing in barter too?  Didn’t the Government want to promote barter? How do you regulate barter in the end? Isn’t that an essential part of the communal law recently passed by the National Assembly? What differentiates a communal vendor or barterer form an informal worker? Is he regulated by this? Who has to register? Where? How does this all work?

And once you get beyond these nitpicking details, everyone is legit, everyone has registered, do they all become “formal” workers? Does the unemployment rate become negative then? Because if informal employment is more than 50% and unemployment is 7 or 8%, like INE says, then we would have -40% unemployment or something like that.

And in the end, when the poor now formalized, “informal” worker has his stuff confiscated by the buhonero police, can he appeal? Can he get his stuff back? Can the buhonero cops become street vendors too? How many buhonero cops do you need to supervise this? Who will train them? Is this an massive employment program in the end?

Does it apply to trucks that come from the interior to sell their goods in the cities too?

Will buhoneros have to have prices marked on all items? Do they need to get cash registers? Do they have to print official tax office receipts? Collect Value Added Tax? Pay it? Pay income taxes?

In the end, this sounds as bizarre and harebrained as so many other things the robolution has ever created or improvised.

But hey, eleven years running and they are still running things…

Looking at the volumes at the “new”, “new” Venezuelan Central Bank exchange market

June 29, 2010

Well, we were told that the now banned swap market was mostly speculation and the President of the Central Bank said US$ 26 million a day should be sufficient. Well, the graph below shows volume so far:

Thus, with corporations limited to US$ 50,000 a day, individuals with US$ 5,000 a year, banks still putting the system together, volume is already up to US$ 44 million.

Not pretty.

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