Bolívar Distorted: The Effects of Exchange Controls on the ...

company Sadia to import 3,500 tonnes <strong>of</strong> chicken at a price <strong>of</strong> $3,150,000 US. 70 Sadia is one <strong>of</strong>
the largest producers <strong>of</strong> chicken in the Americas, but the fact that raised eyebrows was that until
2002, the president <strong>of</strong> Sadia was Luíz Fernando Furlan, Lula’s current Minister <strong>of</strong> Development,
Industry and Foreign Commerce. Furlan is one <strong>of</strong> the many heirs <strong>of</strong> Sadia, and although he no
longer serves on the executive board, he maintains his familial and monetary links to the
company. As mentioned before, the opposition looked upon this as a Chávez ploy to ingratiate
himself with the current Brazilian administration.
<strong>The</strong> CANTV Dollar and the Parallel Market
With foreign exchange literally impossible to obtain through legal means, many
individuals have turned to the parallel market, buying dollars from incoming tourists, from
people paid in dollars, or from those who have decided to make a living smuggling dollars. Most
<strong>of</strong> these transactions that take place on the street are small, $200-$300, and do very little to help
businesses make a dent in the $1 billion worth <strong>of</strong> goods per month that was imported before the
exchange controls were enacted.
Individuals with large sums <strong>of</strong> money to convert and businesses needing more substantial
amounts have turned to the stock market, a legal loophole in the laws that created CADIVI and
enacted the exchange controls. <strong>The</strong> Venezuelan stock market has traditionally been a small
enterprise. A few <strong>of</strong> the larger Venezuelan corporations, such as CANTV, the
telecommunications giant, are traded in New York and can be exchanged for Bolivar- or Dollar-
denominated stocks, but the petrostate model has done little to foment local businesses and thus
the creation <strong>of</strong> viable national market.
70
Vladimir Hernández Lavado. Venezuela recibirá esta semana 3.500 toneladas de pollo brasileño” El Nacional.
June 16, 2003.
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