Three years have passed since the death of Hugo Chávez and the Land of Grace, Venezuela, finds itself at a political and social crossroads. In the midst of food shortages, soaring hyperinflation, opposition calls for the removal of president Nicolás Maduro and government bemoaning of a coup against it, the Latin American country of 32 million people is being tormented by economic crisis.
The major problems in Venezuela’s economy occurred firstly as a result of the dramatic drop in global oil prices, as 25 percent of the country’s GDP is made up of oil exports, which in turn represent 90 percent of its total exports. Secondly, the extent of oil dependency has been overwhelming the primary (agriculture) and secondary (industry) sectors of the economy, forcing Venezuela to import a significant portion of the food products and raw materials it needs. In fact, in a bid to make these goods affordable to the people, the government set fixed prices, by installing a complicated exchange system for the national currency (bolivar) at par with the dollar. Currently, import companies in Venezuela can buy cheap dollars for a price of 6 to 7 bolivars, while the currency rate for industrial importers is about 11-12 bolivars. Nevertheless, in the ever-growing black market the dollar may exceed the price of 1,000 bolivars.
But how did the food and other good shortages began – including toilet paper- that led to the occasional looting we witnessed on several international media? Sadly, the existing system allows for lack of transparency in transactions; this is exploited by businesses that tap cheap dollars from the government and hoard it or sell it to the black market, instead of actually using it to complete their import orders. This way they make immediate and much larger profit than what they’d earn if they decided to distribute their products throughout the country’s stores; and that’s how – more or less – shortages are caused.
Caracas has been going through a particularly “hot” summer on the political front. The opposing coalition of Democratic Unity claimed in June there were nearly 400,000 validated signatories supporting a referendum to recall president Nicolás Maduro. The governing socialist party (PSUV) on the other hand has requested to have the procedure halted, challenging the validity of at least 300,000 signatures. Indeed, during the first review, the national election council had found thousands of them to belong to deceased persons.
At the same time, the American factor has persistently sought to increase its influence in Latin America. In late July for instance, more e-mails of the Democratic presidential candidate Hillary Clinton emerged through the conspicuous Wikileaks platform. The documents allegedly reveal that the former US Secretary of State – and probably the next president of the US – systematically undermined Hugo Chávez’s administration.
To deal with the veritably urgent matters, the Venezuelan government has taken some immediate measures. For example, five or more of the largest ports of the country have been placed under the control of the army, so as to oversee the supply flow. Moreover, after proper arrangements with the authorities in Bogotá, the Venezuelan-Colombian borders have intermittently opened, allowing thousands of Venezuelans to pass through and buy much needed provisions, mainly food and medicines.
In the midst of this situation, several demonstrations have taken place in Venezuelan cities, either against president Maduro or inasmuch in favour of him.
But how all these issues, the shortages, the political polarisation and the daily hardship affect the daily lives of simple citizens? The stories of a family man from and two Greeks from Venezuela speak the truth, diffused with their own experiences and strife.
“I have money, but can’t find food to buy”
Crisloy Medina lives in San Felipe, central Venezuela, with his family. He has studied economics and specialises in trade and imports-exports. However, “it’s tought to live on this job. In the past I could fare well, but now it’s not possible. Until recently I worked at a natural juice production company, in Valencia, Puerto Cabello, in quality control. The company is located in the port, where you could see thousands of containers being unloaded. Today these are gone. The port is like an airport! As anticipated, my employment became meaningless… Now, I make some money working on photography, design and social media”.
We ask Cris to describe a typical day in his life: “I wait for hours to get some food. For three months we eat the same thing, because we can’t find anything else: arepa. Arepa, every day”, he responds, referring to the traditional Latin American corn pockets. “Normally, we eat that with different fillings, like cheese, meat etc. But we eat it plain, just to put something in our stomach”.
As an experienced professional in the trade sector, Crisloy offers an illustrative explanation on why shortages occur. “The problem is complicated. To wind up an import, for example, you have to buy exchange from the government. To do that you need to go through red tape, a procedure that can take up to two or three months, in order to get approval. When that happens, the money essentially are transferred directly from the state to your supplier abroad. In several occasions though, there are importers who bring empty containers just to pocket the dollars, which they can sell for 1,000 bolivar each in the black market. The temptation is tragic. On the other hand, cheap dollar is available only to those who have proper access, through the government for example”. Fixed prices are also a significant contributor to the problem: “They once announced sale prices for eggs on TV. The next day there was not a single egg available in the country. Everyone would sell in the black market to have profit”.
As if shortages were not enough, “we have another problem now. The so-called ‘bachaquero’, people who behave like the bachaco red ants, collecting more and more amounts of food. These individuals opt not to work. Instead, they wait in many different queues to buy food in low prices and then they sell them in the black market. Normal people can’t just do that, stay all day in queues. I have to work and take care of my family”, says Cris, adding that “in the end of the day, I will have to buy from the bachaquero”…
All things considered, Cris has thought to emigrate more than once. “Yet I can’t leave my wife and daughter”, he notes. “And I love Venezuela. It’s an incredible country with wonderful people”. On the contrary, Crisloy contemplates another option: “I was never into politics, but now I feel I have to do something, because the situation is getting worse”.
“I’m thinking of leaving for Chile or Panama”
“Your daily concern is always the same thing: how to find money”. This is what most people struggle for in Venezuela, according to the 33 y.o. computer engineer, Anastasis Dedemadis. “The problem is to find a job that provides enough income to buy the basics, many of which can only be found in the black market”, says Tazo, as they call him. These goods include sugar, bread, paper, etc.; they are cheap, but rare to find legally in the stores, since companies choose not to produce and distribute when their profit is too low. “If someone wishes to sell something, they often turn to the black market as well, running the risk of having their stuff confiscated by the police and getting jailed”. Unfortunately, as Tazo explains, it occurs that some people make more money through trading goods in the black market than through a regular job in some business.
We ask him about his occupation… “Up until 2012, I was working in a poultry factory, but stayed no more than a year. The salaries at such jobs are not enough. We are talking about 30 euro per month, if you calculate it based on the black market value”. But using the official exchange rates, this salary appears to be one of the highest in Latin America: 7,000 bolivars equal more than 600 euro.
The reality tends to be different: “The euro and the dollar offered by the state do not practically exist. There are different exchange rate categories for the dollar. There is the dollar used for purchasing food, that costs about 10 bolivars. There is the one used to import secondary sector products, that costs 620 bolivars. And there is the black market dollar, with a price of 1,000 bolivars”.
The future is uncertain for Tazo. “I’m trying to sell my car and at the same time I’m thinking of leaving the country”, he says in a tentative tone. “I wouldn’t go to Greece though; things are bad as well. Friends have suggested Chile. Another option is Panama. A Latin American country whatsoever”.
“We have a European-like life and a Ugandan-like income”
“Until recently, we used to get by very well”, says Ms Roula Karabela, who’s lived over 38 years in Yaracuy, about 300 km east of the Venezuelan capital. “Venezuela is an [organised] state. A rich country, with gold, hydrocarbons, iron, everything. But, unfortunately, life is hard today”. We ask Ms Roula whether things are as dire as we witness them through the international media. “Perhaps worse”, she responds. “The economy is a tragedy, like in Greece, especially during the last four years. The day before, for example, a friend came by and said ‘have a pound of sugar’. Where have we ended up; to being brought sugar from friends to have some coffee. How much does sugar cost in Greece? Not even one euro. Here we buy it for over two and a half euro. The average salary here, compared to the crisis-ridden Greece is unthinkable: no more than 30-35 euro. Who can live with 30 euro per month? This… in a state so rich, with unlimited ores, oil reserves, so much wealth…”.
“We have a European-like life and a Ugandan-like income”, mentions Ms Roula. Along with her husband -now deceased-, she used to run a footwear craft industry. Their factory operated with success for 29 years, but was hit hard by inflation and today has no more than 10 workers. “It’s difficult to find raw material within my budget. For example, I value my product for 5 euro on Monday and till I find my raw material the cost has risen to 6.5 or 7 euro. This is a disaster for us. With this volatility in the market you constantly make one step ahead and three backwards. Hence this war of nerves is unbearable”.
It’s no wonder Ms Roula has discouraged her son, who studied to be an economist in Greece, from coming to Venezuela to take over the business. “‘I’d love to do it’, he tells me, ‘to come and work’. But I reply, to do what son? Venezuela is not what it used to be…”.
We don’t omit to ask her what she thinks the cause is, for all this. “I’m no expert, but I’ve done the university of… life”, she notes, explaining that what happens in Venezuela is the result of changes and crises in the global economy, combined with how the government handles the situation.
“The only thing left to do is to make my papers, close my compañía, sell what I have and go back home, to my children”. She means Greece. Besides, “the dream of every inmigrante, every expat leaving their country, is to go back. We all want to return to our homeland”.
Nevertheless, Ms Roula shows no lack of optimism. “Hope is the last to die. I think things will get better, because Venezuela is important for many countries in Latin America. It’s my second home; I grew up here ever since I was 19. I believe and wish things will get better”.
Published originally in Greek (The Funnel), 14 Aug 2016