Venezuela says its new grocery loyalty card will stop the toilet paper speculators

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Audio Transcript: Aaron Schachter: I'm Aaron Schachter and this is The World. In Venezuela, the anti-government protests continue and so does the crackdown by security forces. The latest clashes took place last in Caracas. One of the main complaints against the government of President Nicolás Maduro is the mismanagement of the economy. Exhibit A: empty supermarket shelves and soaring prices. Maduro blames the shortages on capitalist speculators and as a solution, he's introducing a grocery store ID card. It's intended to fight smugglers who illegally trade in basic goods, like bread and toilet paper, on the black market. But critics have already called it "the world's creepiest supermarket loyalty card." Andrew Rosati is a freelance journalist based in Caracas and he joins us now. Andrew, explain for us, if you would, what this new loyalty card is. Andrew Rosati: It's kind of strange. It's a cross between what would be a frequent flyer card and something like a Sam's club or CostCo card. the government is using it as a way to conduct a census of who is buying what in certain state-run supermarkets and stores across the country. The main focus is going to be basic consumer goods like milk, flour, toilet paper and even chicken and meat. The big problem they're trying to combat, according to them, is contraband. A lot of smuggling is done across the border to Columbia. However the critics say this is kind of a veiled form of rationing. They say it's the first step toward a Cuban-style rationing system and that they're going to use to eventually limit what the average consumer can buy and when they can buy it. Schachter: So essentially what's happening is the card will know that you're buying 2 rolls of toilet paper vs. 20. What is the point of rationing goods like this? Rosati: The president just announced yesterday he was going to approve it and what was going to be optional - what's interesting about this is he's offering a lot of prizes for frequent consumers. He's offering everything from cars to apartments and tourists packages. They wanted to get an idea of who's buying what. There's long lines often formed when those choice goods finally do get here and it's often that these supermarkets, even private supermarkets, will only let you buy 1 or 2 at a time to kind of avoid disturbances in these supermarkets as fights will often times break out. Also, certain state-run markets have limited down your purchase to once a week, you have to purchase an ID card. What people are criticizing is that they'll get an idea of what you're buying and when and it will eventually be the government that will determine what you can buy and when you can buy it, as they see fit. They haven't said this yet but this is what the hard line critics are saying. Schachter: Do people really believe it will stop the smuggling? Rosati: Venezuela has long had some of the world's cheapest gasoline and people have, for years and years, been taking the gasoline across Colombian borders. With all the new economic distortions that is at the root of these currency controls that were instituted under former President Hugo Chavez, it led way to the smuggling of food and basic consumer goods. People are really skeptic because 2 years ago they introduced a chip system, which is essentially an ID card, for the gasoline and it hasn't stopped smuggling. Schachter: This seems like a "cat chasing its tail" scenario. Prices go up, the government institutes one control or another which drives prices up, which leads to more controls. Where does it end? Rosati: The big thing to keep in mind here is that Venezuela imports almost all of the products consumed here. At the end of the day, what is really important for Venezuela is foreign currency so that they can make these imports possible. One of the big reasons that so many goods are not available now is unavailability of foreign currency to get them, so until the government gets really serious about addressing how they're going to make a currency control system work or to make more dollars available, I would imagine that these shortages are going to continue. Schachter: Andrew Rosati, a journalist based in Caracas. Andrew, thanks a lot. Rosati: Thank you.