Cracking down on street vendors

One year ago, this practice was sort-of tolerated by the authorities. Not anymore.

The central government has launched a new front in the economic war: going after street vendors (buhoneros) who sell groceries and other regulated products, as well as those who engage in the practice of smuggling (bachaqueo).

The latest Official Gazette has a list of 42 products including food, hygiene products, medicines & medical supplies, school supplies, etc., that can no longer be sold by buhoneros. Those who don’t comply with this decision will face the legal sanctions included in the Fair Costs and Prices Law, which includes prison.

A bit of background is necessary here. The chavista administration (this one and the previous one) has been extremely tolerant with street vendors, whom they see as part of their political base. The last fifteen years has basically seen their presence multiply all over our cities. Under the guise of “social justice,” they have allowed the informal economy to flourish without regard to the simple fact that, many times, buhoneros are in a much more precarious situation that their legal commerce counterparts – worse working conditions, less stable incomes, lower wages.

Just last year, the official line reflected this lenient attitude, as in the words of then INDEPABIS (Consumer Protection Agency) head Eduardo Samán:

“Buhoneros are not guilty… why do people insist on attacking them? I’ll say it loud and clear: I’m not going to go after buhoneros, the revolutionary government won’t go after the people. We will talk to them and solve the problem that way…”

But a lot has changed since then. Scarcity is now worse (thanks to the drastic reduction of imports), Samán was laid off, INDEPABIS is no more, and the government’s own E-Rationing program isn’t enough to control the problems caused by Venezuela’s byzantine system of currency and exchange controls. The shelves are empty, and so are the government’s coffers, so there is no choice but to clamp down on street vendors in order to somehow ease the many lines at grocery stores.

Related to this announcement, the Fair Prices Superintendent Andrés Eloy Méndez has singled out foreign street vendors, and has threatened with revoking their residence permits or nationality if they are caught. Sadly, this quote brings to mind the infamous “Andrade doctrine”, as well as the fact that the central government has applied it before.

Another measure comes out of the nostalgia files: the return of the B.C-era (Before Chávez) P.V.P. (Sale Price to the Public), a mandatory regulation requiring all products have a price printed on them. You can imagine the chaos this creates for companies, who must now contend with printing prices on the packages in an environment where monthly inflation is roughly 4%.

But PVP has not been resurrected, there has been a change of one single letter. Meet the P.V.J. (Precio de Venta Justo or Fair Sale Price) which will start on November 1st. Of all the pre-Chávez presidents, Chavismo likes to imitate Jaime Lusinchi quite a lot.

Will these measures work? Highly unlikely. As the old saying goes: the more things change, the more they stay the same.