From the Editors of VenEconomy

The main purpose of a state is to provide the population with the maximum well-being possible.

This well-being is intrinsically linked to meeting the basic needs of employment, housing, health, security, education, and optimum quality in the infrastructure of public facilities and in the provision of services.

For that reason, it is extremely difficult to believe that a government is fulfilling this key purpose when it has spent most of its time in office in flagrantly siphoning off money from the public treasury to “purchase” companies that were fully productive and generating wealth, high quality products and services, employment, and well-being.

It is obvious that the country’s money thus invested is money down the drain. These funds would have yielded more for the population if they had been invested in building a bridge, a school, a hospital or housing to cover the growing housing deficit.

This policy of expropriation does not fulfill this objective either, when those companies join the long list of badly managed, inefficient, unproductive, highly politicized state-owned companies that only generate state bureaucracy; companies that, moreover, end up, in most cases, providing poor services or expensive, poor quality products, provided they manage to start up operations.

The most recent example of this policy that is impoverishing the country by leaps and bounds is the announcement that two coffee roasting plants will be expropriated with the totally illogical argument that they are contributing to the smuggling of green coffee out of the country.

Even though these companies demonstrated, beyond a shadow of a doubt, that the accusation was false and that they had nothing squirreled away, Food Minister Félix Osorio confirmed that Café Fama de América, despite having operated in the country for more than 100 years, will be completely expropriated, while Café Madrid will become a mixed enterprise with the government holding the majority of shares and its administration being handed over to the workers’ councils.

It is worth noting that, together, these companies were processing 2,170 tons of coffee a month, approximately 50% of the country’s monthly consumption (5,000 tons). The other 50% is being covered by small and medium coffee roasting plants.

In this new wave of expropriations, the Executive, boasted Minister Osorio, will also grab two sugar mills: Cafta in Táchira and Venezuela in Zulia.

Unfortunately, the scant resources of the public treasury are, once again, being wasted. These companies, until now productive, will go into a kind of limbo along with the other state-owned companies that still hope to be awakened from their deep sleep to, once again, become the engines of development they once were.

The sad thing is that the real losers in this story are the Venezuelans, who will have to get used to drinking bad domestic coffee or pay more for an imported brand; an irreparable loss.