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Venezuela's largest brewer shuts down

Chase WinterApril 30, 2016

Venezuela's largest brewer has closed its last factory due to supply shortages, in the latest in a string of bad news for Latin America's main oil producing economy. There is also food rationing and spiraling inflation.

Venezuela Bier Polar
Image: picture-alliance/AP Photo/F. Llano

Electricity blackouts, food rations, the world's highest inflation, and now no beer - Venezuela's downward economic spiral knows no limits.

The country's largest brewer on Friday closed down the last of its four factories because of a shortage of imported barley. Cerveceria Polar, a unit of the country's largest food enterprise, Empresas Polar, produces nearly 80 percent of Venezuela's beer.

As a result of falling oil prices, external debt and government exchange policies, importing even the most basic of goods has become a challenge for the cash-strapped socialist government.

Citizens already have to wait in long lines to acquire dwindling supplies of anything. Even toilet paper is running out.

Adding to the oil-rich country's woes is an electricity shortage, which has forced the government to implement rolling blackouts and shorten the work week in a desperate bid to conserve power.

Skipping meals: Venezuela’s economic crisis

The situation has become so dire President Nicolas Maduro has called on women to not use hair dryers.

"I always think a woman looks better when she just runs her fingers through her hair and lets it dry naturally. It's just an idea I have," he said in early April in a televised address to the nation.

Shops, industry and hotels were also asked to reduce electricity consumption. Last week, the government ordered the country to put its clocks forward by 30 minutes to save power.

The blackouts have helped to further tank the economy and fuel supply shortages in a country which actually has some of the largest oil reserves in the world.

El Nino or mismanagement?

Maduro's government blames the power shortage on a drought caused by the El Nino weather phenomenon. The drought has led to a drop in water behind the Guri Dam, which produces 70 percent of the country's electricity.

Critics point to a lack of investment and maintenance in energy infrastructure alongside electricity subsidies that give consumers little incentive to conserve power.

Venezuela's basket-case economy has some observers worried the country could descend into political violence. Government supporters on Friday attacked Jesus Torrealba, a senior leader of the opposition MUD coalition, as he was demonstrating against the power cuts, according to a video posted on YouTube.

Venezuela Caracas Krise
The MUD opposition coalition secretary-general, Jesus Torrealba, was reportedly attacked by government supporters during a protest against electricity shortages.Image: picture-alliance/dpa/Mud Press Office

The opposition is moving to oust Maduro through a referendum. His United Socialist Party lost control of the parliament to the opposition in December.

Earlier this week street clashes and looting erupted in Maracaibo, Venezuela's second-biggest city. The country is already one of the most violent in the world, according to the UN.

(AFP, AP, dpa)