Economic meltdown in Venezuela

This article fails to point out that the US Congress has passed legislation to impose economic sanctions on Venezuela. See - Venezuela leader praises US rejection of sanctions

Caracas Goes Thirsty as Taps Run Dry and Bottles Vanish

Residents of the Venezuelan capital of Caracas, who already struggle to find toilet paper and deodorant, are facing a new shortage -- drinking water.

Bloomberg

31 May, 2014

The rationing of tap water amid a drought and a shortage of bottles because of currency controls are forcing people to form long lines at grocery stores and bottle shops as soon as deliveries are made. Truck drivers spend much of their day outside water dispatch centers as they try to meet demand.

“I used to have to wait an hour to refill the truck, but now I have to wait six,” said Carlos Miliani from his truck outside the Alpina dispatch center in eastern Caracas. “More trucks are lining up here because of the shortage of plastic containers and the fact that plants that bottle mineral water have shut down.”

Miliani, who was waiting behind 15 trucks at 11 a.m. to fill up with 5-gallon (19-liter) jugs, said that a government-mandated water rationing plan in Caracas and hot weather are fueling demand as supply shrinks.

“I haven’t been able to find 5-liter bottles of water in the supermarket for the past two weeks, and there haven’t been half-liter bottles this week,” Maria Hernandez, a 36-year-old secretary, said in an interview in Caracas today. “I have four at home, but I’m afraid that they’ll run out and that I won’t be able to find more. They ration water at my house on Wednesdays.”

Rationing

State water utility Hidrocapital this month started rationing water in the capital. Some areas of the city receive water service only three days a week, with most neighborhoods going without water at least one day a week. When water does flow, few residents dare to drink it because of contamination.

It costs 30 bolivars ($4.80 at the official exchange rate) for a five-gallon jug of filtered water that comes in a reusable plastic container.

“With the rationing and the heat, the people that used to buy one jug now want two,” Miliani said. “I’ll only sell them a new jug if they return an empty one. I’ve got 12 broken ones that I can’t replace because of the shortage of plastic containers.”

No Bottles

Regulated prices for bottled water have not been raised since November 2011, industry association Anber said in a May 19 statement. Since then, consumer prices have risen 110 percent, according to central bank data, while the bolivar has lost 87 percent of its value on the black market, according to dolartoday.com, a website that tracks the value on the Colombian border.

“Production costs have risen with labor and transport,” Anber said. “The cost of producing and distributing bottled water has more than doubled in the past two and a half years.”

Economy Vice President Rafael Ramirez said today that the government is working to restore the supply of containers and that the currency board had approved dollar payments to small companies in priority sectors.

“There is a problem with the supply of plastic used to make the bottle caps, so we’re bringing it in ourselves,” Ramirez told reporters in Caracas. “Mineral water is a government issue, as companies need permission to bottle it. If they leave us without water, we’ll look into it.”

Inflation Spiral

Annual inflation in Venezuela hit 59 percent in March after the government carried out the biggest devaluation since currency controls were instituted in 2003. The central bank hasn’t provided data on product scarcity since January, when it said 28 percent of basic goods were out of stock at any given time.

Shortages of everything from car parts to flour have spurred almost four months of protests against the government of President Nicolas Maduro, leaving 42 people dead.

“I have to pay for repairs that are much more expensive now every time that I have to do maintenance on the truck,” Miliani said. “I have to increase the salaries for the five employees that I have. Water may start free, but the price of everything else goes up.