In Oil-Bust Venezuela, Buying Diapers on the Black Market

by Scott Tong, Market Place:

In the petroleum state of Venezuela, the oil price crash has worsened what’s already an economic emergency. Food and medicine are scarce. So residents are asking for help from anyone they can, including public radio reporters visiting from America.

Yesman Utrera is the fabulous translator I hired in Venezuela. Often we call these short-term colleagues “fixers.” They set up interviews, arrange travel, keep us alive (which matters in Latin America’s most dangerous place). Yesman is the best. Before I went, he delivered this selfie via WhatsApp so I’d recognize him at the Caracas airport.

After landing, I handed over the one package Yesman asked me to schlep from America: a sack of diapers, size infant large. For his five-month old daughter, Issa.

Even nappies are in short supply in Venezuela, along with flour, rice, milk, cooking oil, condoms, bug spray. You name it. The problem is, the country only makes oil. That’s it. Virtually everything else is imported.

“And with the drop in the oil prices, now we have less money to import food in the supermarkets,” Yesman said. “So scarcity will get worse.”

It doesn’t appear Venezuela makes any diapers at home. Domestic producers struggle to stay afloat for several reasons: Under the regime of price controls, the state sets ultra-low selling prices. The strong currency (fixed by the government) makes exports expensive overseas, rendering them uncompetitive globally. And the government has taken over — or expropriated – a good portion of private-sector firms.

In Yesman’s slum and across Venezuela, everyone suffers from shortages. The answer: the black market, for those who can afford it.

Yesman does. He takes me to the slum where his old friend Nazareth lives. She’s his diaper dealer, a professional re-seller. Scalper. Every morning, she lines up outside state supermarkets before dawn, and when they open she buys whatever is available. It turns out Nazareth contributes to a fairly sophisticated diaper (and food and medicine) supply chain that relies on bartering.

“We have a network of re-sellers,” Nazareth said. “We talk about what our clients need. If I need 10 bags of diapers, my colleagues will give me diapers and I’ll trade them rice or flour.”

The black market network features a kind of honor code, Yesman explains. If, under the government price, two small sacks of corn flour equal one bag of coffee, the same ratio applies when bartering. Typically, buyers find sellers through friends, or through chat groups on Facebook or WhatsApp.

The pricing structure is fluid, Nazareth said, based on scarcity and urgency. Right now she sells coffee at 10 times the normal price. Corn flour: 25 times.

“Sugar, coffee, corn flour and rice are really hard to find,” Nazareth said. “And people know it. So we’re savvy enough to ask for good money.”

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