Don’t expect a Coke and a smile in Venezuela

It is hard to give someone a Coke and a smile in Venezuela. The cola manufacturer halted its operations in the country. Economist Tom Standage discussed the issue with NPR Host Rachel Martin in a recent interview.
The Coca-Cola company does not fear the growing political unrest in the country, according to Corporation Wiki. It is simply not able to obtain sugar or even high fructose corn syrup at reasonable prices. Although the official exchange rate is 10 Bolivars for one dollar, Venezuelan black markets offer an exchange rate of 100 bolivars for one dollar. Sugar growers like Norka cannot sell their product profitably through the country’s official channels.

Standage blames the policies and the corruption of the Chavez administration for the poor exchange rate. Chavez believed that giving lots of money to the poor would ease their situation. The idea worked as long as oil prices remained high. When prices fell, inflation rose. Officials from former and current administrations continued to help themselves to the country’s funds as well.

During the interview, Standage referred to Coca-Cola as the closest thing to capitalism in a bottle. It is available in all but three countries currently. Coca-Cola is not sold in Cuba and North Korea because of trade embargoes. It is not sold in Venezuela because of the lack of access to sugar.