Poli-cy Wanting at Caracas

I’ve just been watching the BBC World News channel as I prepare to return to England after a 2 week holiday in Poland. I saw an item about plans to introduce fingerprinting in supermarkets in Venezuela.

The reason for this is that Venezuela subsidizes food and other necessaries to make them cheaper and more affordable. All very laudable no doubt. The problem is Venezuelans are buying these cheaper subsidized goods (about 40% of the total), smuggling them into neighbouring Colombia and there selling them at a much higher, unsubsidized price for a nice profit.

Both the Venezuelan and Colombian governments are displeased with this – hence the fingerprinting and other measures, like tighter policing of the border.

Now, all this fingerprinting seems a bit intrusive for my liking, and expensive as well. The Opposition there says it is like treating all citizens as thieves.

Unfortunately, this whole sorry mess is rather predictable. One clumsy government intervention has caused problems, requiring yet more clumsy government interventions. The problems are not being dealt with, merely moved along elsewhere – rather like squeezing a bulge in a long balloon.

Now, am I heartlessly recommending that the government stop helping poor citizens afford food and let them starve? Of course not.

I agree with the ends of the policy – affordable food. What I disagree with is the means by which the government hopes to meet those ends.

Rather than subsidizing the food – leading to the price difference which enterprising Venezuelans are using to arbitrage – I suggest a different approach. If the problem is that some people are too poor to afford food, deal with the poverty directly by giving cash or food vouchers to poor citizens.

The smuggling would stop, and it would also be a more targeted approach – how many richer Venezuelans take advantage of the subsidized food when they could perfectly afford the full price?

Of course I hope the Venezuelan government takes my advice. Any payment would be gladly appreciated. How about a share in those oil revenues?

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