10/18/2015

FewinVenezuelaWantBolvars,butNoOneCanSpareaDimeTheNewYorkTimes

http://nyti.ms/1NOoG9F

AMERICAS

FewinVenezuelaWantBolvars,butNo
OneCanSpareaDime
ByWILLIAMNEUMANandPATRICIATORRES

OCT.18,2015

CARACAS,VenezuelaPitythebolvar,Venezuelascurrency,namedafterits
independencehero,SimnBolvar.Evensomethievesdontwantitanymore.
WhenrobberscarjackedPedroVenero,anengineer,earlierthisyear,he
expectedtheywoulddrivehimtohisbanktocashhischeckforaheftysumin
bolvarsthesortofthingthatcrimewearyVenezuelanshavelongsince
gottenusedto.Buttherobbers,armedwithriflesandagrenade,surethathe
wouldhaveastashofdollarsathome,wantednothingtodowiththebolvars
inhisbankaccount.
Theytoldmestraightup,Dontworryaboutthat,Mr.Venerosaid.
Forgetaboutit.
Theeagernesstodumpbolvarsoravoidthemcompletelyshowsthe
extenttowhichVenezuelanshavelostfaithintheireconomyandintheability
oftheirgovernmenttofindawayoutofthemess.
Ayearago,onedollarboughtabout100bolvarsontheblackmarket.
Thesedays,itoftenfetchesmorethan700bolvars,asignofhowthoroughly
domesticconfidenceintheeconomyhascrashed.
TheInternationalMonetaryFundhaspredictedthatinflationin

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Venezuelawillhit159percentthisyear(thoughPresidentNicolsMadurohas
saiditwouldbehalfthat),andthattheeconomywouldshrink10percent,the
worstprojectedperformanceintheworld(thoughtherewasnoestimatefor
wartornSyria).
Thatwouldbeadisastrousdriveoffthecliffforacountrythatsitsonthe
worldslargestestimatedoilreservesandhaslongconsidereditselfrichin
contrasttomanyofitsneighbors.
Yettherealstorygoesbeyondnumbers,revealedintheabsurditiesoflife
inacountrywherethegovernmenthasrefusedformonthstoreleasebasic
economicdataliketheinflationrateorthegrossdomesticproduct.
Evenasthecountrysincomehasshrunkwiththecollapsingpriceofoil
Venezuelasonlysignificantexportandtheblackmarketfordollarshas
soared,thegovernmenthasinsistedonkeepingthecountrysprincipal
exchangeratefrozenat6.3bolvarstothedollar.
Thatastonishingdisparitymakesforastickershockeconomyinwhichit
canbehardtobesurewhatanythingisreallyworth,andinwhichtheblack
marketdollarincreasinglydictatesprices.
Amovieticketcostsabout380bolvars.Calculatedatthegovernment
rate,thatis$60.Attheblackmarketrate,itisjust$0.54.Wantalarge
popcornandsodawiththat?Dependingonhowyoucalculateit,thatiseither
$1.15or$128.
Theminimumwageis7,421bolvarsamonth.Thatiseitheradecent
$1,178amonthoramiserable$10.60.
Eitherway,itdoesnotgofarenough.AccordingtotheCenterfor
DocumentationandSocialAnalysisoftheVenezuelanFederationofTeachers,
amonthsworthoffoodforafamilyoffivecost50,625bolvarsinAugust,
morethansixtimestheminimummonthlywageandmorethanthreetimes

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whatitcostinthesamemonthayearearlier.
Dinnerfortwoatoneofthiscitysbetterrestaurantscancost30,000
bolvars.Thatis$42.85attheblackmarketrateor$4,762attheofficial
exchangerate.
Inflationhasgottensobadthatautoinsurancecompanieshave
threatenedtoissuepoliciesthatexpireaftersixmonths,tominimizetherisk
fromthesoaringcostofcarparts.
Agallonofwhitepaintcostalmost6,000bolvarsonarecentTuesday.At
thesamestoreonthefollowingFriday,itcostmorethan12,000bolvars.
WithcruciallegislativeelectionsscheduledinDecember,thegovernment
hasbeguntomakerefrigerators,airconditionersandhouseholdappliances
availabletogovernmentworkersandthepartyfaithfulatrockbottomprices.
OnegovernmentworkersaidhehadboughtaChinesemade48inchplasma
televisionfor11,000bolvars,orjust$15.71attheblackmarketexchangerate.
Mr.Maduroblamesaneconomicwarwagedbyhisenemies,foreignand
domestic,forthecountrysproblems.Butmosteconomistssaytheproblems
arecausedbythefallinoilpricesandbythegovernmentspolicies,including
strictcontrolsonpricesandforeignexchangeforimports.
Asthecrisishasunfolded,Mr.Madurohasbeenhesitanttomakechanges
thateventopofficialssayareneeded,likeraisingthepriceofgasoline,which
issoheavilysubsidizedthatitisvirtuallyfreeperhapsbecauseheisfearful
ofabacklashbeforetheelections.
Thingsgetstrangerbytheday.
Needanewcarbattery?Bringapillow,becauseyouwillhavetosleep
overnightinyourcaroutsidethebatteryshop.Onarecentnight,morethan
80carswerelinedup.

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FewinVenezuelaWantBolvars,butNoOneCanSpareaDimeTheNewYorkTimes

Wantanewcareer?PlentyofVenezuelanshavequittheirjobstosellbasic
goodslikedisposablediapersorcornflourontheblackmarket,triplingor
quadruplingtheirsalaryintheprocess.
Needcash?O.K.,butnottoomuch.SomeA.T.M.slimitwithdrawalsto
theblackmarketequivalentofabout50cents.
Giventhechronicshortagesofbasicgoods,supermarketsandpharmacies
filllongrowsofshelveswithasingleproduct.Onestorerecentlyhadboth
sidesofanaislelinedwithpackagesofsalt.Anotherdidthesamethingwith
vinegar.Apharmacyhadrowafterrowofcottonswabs.
Butamongalltheshortageshere,oneofthemostnotableisashortageof
papermoney,especiallythecoffeecolored100bolvarnotesthatarethe
largestingeneralcirculation(blackmarketvalue,about$0.14)andfeaturea
portraitofSimnBolvar.
Youwanttounderstandwhytheresalotofmoneyandtheresno
money?RuthdeKrivoy,aformerCentralBankpresident,askedwitharueful
laugh.Shesaidthemainproblemwasthatthegovernmenthadfailedto
respondtorapidlyrisingpricesbyissuinglargerdenominationbills,likea
1,000or10,000bolvarnote.Sopeopleneedmanymorebillstobuythe
samegoodstheyboughtayearago.
Also,aspeopleresorttotheblackmarkettobuymoregoodsthatcannot
befoundinstores,transactionsthatcouldoncebemadewithdebitorcredit
cardsarenowconductedwithcash.Thatcreateslogisticalproblems,asbanks
mustmovearoundhugeamountsofpapermoneyandA.T.M.semptyout
morequickly.
Mr.Maduroiscertainlyawareofthesymbolicimpactofissuinglarger
billswithmorezerosandtheinevitablecomparisonitwouldstrikewithhis
predecessorandmentor,HugoChvez.In2008,Mr.Chvezissuednewbills
andknockedoffthreezerosfromacurrencythathadlongsufferedfrom

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devaluationandinflation,renamingitthestrongbolvar.
Today,thebolvarisanythingbutstrong.
Theotherday,JaimeBello,anairlinemechanic,visitedhisbank,the
governmentrunBancodelTesoro,onlytofindthatitsthreecashmachines
wereoutofmoney.Herecalledanearliervisitwhenhewenttowithdraw
2,000bolvarsandstoodlisteningtothewhirringsoundasthemachinespit
outagreatstackof5bolvarnotes,eachworthlessthananAmericanpenny.
Hepulledoutthestackof200billsandthenwaitedwhilethemachine
countedout200more.
Itscrazy,hesaid.Werelivinganightmare.Theresnothingtobuy,
andthemoneyisntworthanything.
Thecrisishasalsomeantopportunityforthosewillingtostandinlong
linestobuycheapgovernmentregulatedgoodsthattheycanresellataprofit.
Isaidtomyself,Icanmakemoredoingthis,andIquitmyjobatthe
hairsalon,saidGeraldineCassiani,wholeftherjobasamanicuristin
Februaryforacareerontheblackmarket.Shesaidshenowearnedfourtofive
timeswhatshehadbefore.
Onarecenttriptothesupermarket,sheusedcontactsatthestoretoskip
thelineoutsideandboughtfourpackagesofdisposablediapers,eventhough
shoppersweresupposedtobelimitedtotwoeach.Ms.Cassianialreadyhada
clientlineduptobuythediapersforalmostthreetimeswhatshepaid:a
nursewhocouldnottaketimeofftostandinline.
Mr.Maduroregularlygoesontelevisiontodenounceblackmarketeers
andtoblamethemforshortagesandhighprices.
Partly,IthinkthatwhatImdoingisbad,Ms.Cassianisaid,addingthat
shedidnotraisepricesasmuchassomeblackmarketeers.Asinglemother,
shesaidshehadtoprovideforherchild.

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FewinVenezuelaWantBolvars,butNoOneCanSpareaDimeTheNewYorkTimes

Necessityhasadogsface,shesaid.
MaraEugeniaDazcontributedreporting.

2015TheNewYorkTimesCompany

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