March 8, 2014
Venezuela faces newsprint shortage
Scarcity of dollars leads to difficulties re-stocking inventories and sparks protests in Caracas
CARACAS — About two hundred journalists and journalism students protested yesterday against government delays to the distribution of foreign currency that is making it impossible for newspapers to buy imported paper to run their presses. These delays have already have led to the closure of nine regional papers and pose an increasing threat to the roughly 70 newspapers in Venezuela, including the major national papers in Caracas.
“We are facing an emergency situation that must be resolved immediately,” said the Secretary-General of the National Press Union, Marco Ruíz, while confirming that that some of the major newspapers such as El Nacional, risk closing in the next few weeks.
Miguel Henrique Otero, editor of El Nacional, one of the biggest in Venezuela and distributed nationally, recently announced that the paper only has a stock of newsprint that will allow it to operate until February. Nine regional papers have already ceased operations since August 2013.
Marco Ruíz of the National Pressworker’s Union and President of the National Association of Journalists, Tinedo Guía, met with a representative of National International Trade Centre (CENCOEX) to explain the critical situation facing newspapers and the risk that thousands will be laid off should the papers close.
The CENCOEX is now responsible for the Comisión de Administración de Divisas (CADIVI), which is the administrative body that has regulated the purchase of foreign exchange since 2003. An assistant to CENCOEX director Alejandro Fleming received the delegation and promised a response within two to three days but did not give futher indications of what to expect nor under what terms the petition was being received.
Speaking to the Herald, Juan Carlos Salas, a journalist at regional paper El Impulso of Barquisimeto said that the newspaper currently has enough stock to operate for approximately another 15 days, but that it has already been forced to reduce the number of pages it publishes drastically since September 2013, dropping from 32 pages to 16 pages currently. In the very short term the paper will reduce its publication to eight pages and Salas advised that as a matter of “honour” El Impulso will run single-page editions if it must. El Impulso is Venezuela’s oldest newspaper and has been operating for 110 years.
As Venezuela does not produce its own newsprint, it must be imported from Canadian producers who will only accept payment in US dollars.
As per official regulations established 11 years ago, Venezuelan companies are required to obtain foreign currency from the Venezuelan government through a tightly regulated system. Importers must first acquire import licenses and if their request is approved, the dollars are distributed.
Newspapers are not the only sector to have been affected. Manufacturers and food processing companies have also warned in recent weeks about their inability to pay for imports as their distribution of dollars has not been approved and suppliers have refused to continue their shipments unless debts are cancelled.
Imported food makes up a very large proportion of diets in Venezuela.
El Impulso had received authorization in early January to receive USD for the purchase of paper but the lengthy bureaucratic process ensured that the approval was received once the contained ship from Canada had already set sail. The paper’s request that the existing permit be modified so that the daily could participate in the next shipment was denied, requiring a new application. These processes require between 30 to 45 days and the shipment of paper from Canada to Venezuela also requires a similar time frame, pushing the expected delivery of any paper far past the paper’s anticipated outage date.
The troubles facing El Impulso are, according to Salas, representative of the situation affecting all of Venezuela’s newspapers and as such each paper cannot afford to sell any excess stock of newsprint to its competitors and colleagues in the sector. Given the systematic squeeze, Salas advised that solidarity and professional camaraderie have broken down and that the only solution is the arrival of new supplies of newsprint.
Consulted about the reason why he believed foreign exchange was delayed, Salas said it was due to the fact that there simply aren’t enough dollars in Venezuela and that the government is prioritizing the use of dollars to pay for the importation of food and other basic essentials.
Announcing a series of measures that tightened access to dollars, Energy Minister Rafael Ramírez justified the measures partly by arguing that the government could issue dollars for tourists or for “importing food.”
Salas also did not rule out that the situation was a way for the government to pressure media that he labelled as “critical” of the Maduro government and its policies.
The Media Affairs Commisison of the National Assembly is expected to meet today with members of the press and union representatives to discuss the matter further. Earle Herrera of the ruling United Socialist Party of Venezeul (PSUV) told members of the press yesterday that the government recognizes the situation and that it “is carrying out the necessary steps to resolve it.”
At the same time, Herrera suggested that the problem is a result not of the government’s licensing process but the fact that importers that had received US dollar to import paper later re-sold those dollars at black market rates, leading to the collapse of paper importation. Dollars bought at the CADIVI rate of 6.30 bolívars to the USD can be illicitly sold in the black market at price about 10 times that amount.
Attempts to reach the CADIVI and a government spokesperson by telephone were unsuccesful.
The road ahead
Central to the papers’ protests against the government’s ineffeciency has been the fact that they simply want the government to execute it’s own programme of foreign exchange purchases that previously allowed the purchase of US dollar.
For reasons that are still not clear, this clearly has not been happening. The next few days will be central to determining the reasons for the delays and what steps can or will be taken to guarantee the supply of newsprint so that jobs in the industry and the free circulation of print media throughout Venezuela is guaranteed.