Let them eat bolivars: as a referendum looms, Venezuelan importers wonder if they'll ever see another dollar.

Molino Hidalgo flourmill, on the coast of Venezuela, sits silent, most employees on a forced vacation. The mill does not lack capital, suppliers or markets in this pasta-crazy nation. Molino Hidalgo has simply run out of flour. Government exchange controls won't allow the owners to change their bolivars into dollars to buy wheat from abroad, managers say.

"We've had to stop until they give us the dollars," says General Manager Hector Hidalgo. "No one wants to export [to Venezuela] until they're paid."

That's because Venezuela's strict exchange-control system now requires all foreign currency be purchased through the government exchange agency Comision de Administracion de Divisas (Cadivi). While choking off imports of everything from newsprint to food, medicine and spare parts, the move has strengthened foreign exchange reserves--a key government goal to protect the bolivar. At press time, reserves were $16.6 billion. Nevertheless, the LATIN TRADE Consensus Forecast predicts reserves will fall to $12.6 billion in 2003.

The short-term cost to business has been overwhelming. Exchange controls were imposed in mid-January, but it was only in mid-May that Cadivi began selling a trickle of dollars to finance Venezuela's $12.28 billion worth of imported goods annually. By early June, only $500 million had been approved. "The net result is that it's paralyzing Venezuela's economy, and the government will not be able to make up the difference," says Tony Herrera, vice president of the Venezuelan-American Chamber of Commerce, whose members average of $4 million in debts with overseas suppliers.

Applicants complain that Cadivi requires them to fulfill a complex and frequently changing process of bureaucratic requirements. Manuel Aponte, a financial manager for a chemical company, was making his 50th visit to Cadivi in his company's 103 days of trying to buy $2.8 million dollars. "We've given them everything," he says. "The only thing they haven't asked for is a death certificate. And at the rate we're going, we're going to have give them that, too."

Out of order. In theory, the dollar application process is carried out through a Cadivi Web site. In practice, businesses face long lists of requirements to fulfill before they can even register with Cadivi. Tax records must be in order, too. In an oil-rich nation where many have long seen paying taxes as optional, that's a daunting task.

If approved, the importer tells its overseas exporter to ship the product. When the goods arrive, Cadivi officials confirm that the imported products match the request. Finally, the importer is allowed to purchase dollars with bolivars at the low official rate, which the Central Bank transfers directly to the foreign exporter. The Venezuelan importer never touches a dollar.

The government's response to the crisis--importing foods, in some cases with help from Cuban state importing company Alimport--has only escalated opposition cries that President Hugo Chavez's goal is to install Cuban communism in Venezuela. There are already many Cubans here, teaching everything from urban gardening to sports, and Chavez's recent announcement that he would bring in Cuban literacy instructors, despite high unemployment among Venezuela's own teachers, raised protests that the Cubans are here solely to indoctrinate poor Venezuelans. A referendum on Chavez's rule could take place as of Aug. 19.

Ingrid del Rio, 47, walks from pharmacy to pharmacy around Caracas carrying an empty bottle of her husband's respiratory medicine. She had already visited five drug stores in vain, searching for a refill. "My husband takes it every night before going to sleep," she says. "There are similar [medicines], but one wants the right one."

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MIKE CEASER * CARACAS