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Few in Venezuela Want Bolívars, But No One Can Spare a Dime - The New York Times
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10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
http://www.nytimes.com/2015/10/19/world/americas/fewinvenezuelawantbolivarsbutnoonecanspareadime.html?hp&action=click&pgtype=Homepage… 1/6
http://nyti.ms/1NOoG9F
AMERICAS
Few in Venezuela Want Bolívars, but NoOne Can Spare a DimeBy WILLIAM NEUMAN and PATRICIA TORRES OCT. 18, 2015
CARACAS, Venezuela — Pity the bolívar, Venezuela’s currency, named after itsindependence hero, Simón Bolívar. Even some thieves don’t want it anymore.
When robbers carjacked Pedro Venero, an engineer, earlier this year, heexpected they would drive him to his bank to cash his check for a hefty sum inbolívars — the sort of thing that crimeweary Venezuelans have long sincegotten used to. But the robbers, armed with rifles and a grenade, sure that hewould have a stash of dollars at home, wanted nothing to do with the bolívarsin his bank account.
“They told me straight up, ‘Don’t worry about that,’ ” Mr. Venero said. “‘Forget about it.’ ”
The eagerness to dump bolívars or avoid them completely shows theextent to which Venezuelans have lost faith in their economy and in the abilityof their government to find a way out of the mess.
A year ago, one dollar bought about 100 bolívars on the black market.These days, it often fetches more than 700 bolívars, a sign of how thoroughlydomestic confidence in the economy has crashed.
The International Monetary Fund has predicted that inflation in
10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
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Venezuela will hit 159 percent this year (though President Nicolás Maduro hassaid it would be half that), and that the economy would shrink 10 percent, theworst projected performance in the world (though there was no estimate forwartorn Syria).
That would be a disastrous drive off the cliff for a country that sits on theworld’s largest estimated oil reserves and has long considered itself rich incontrast to many of its neighbors.
Yet the real story goes beyond numbers, revealed in the absurdities of lifein a country where the government has refused for months to release basiceconomic data like the inflation rate or the gross domestic product.
Even as the country’s income has shrunk with the collapsing price of oil —Venezuela’s only significant export — and the black market for dollars hassoared, the government has insisted on keeping the country’s principalexchange rate frozen at 6.3 bolívars to the dollar.
That astonishing disparity makes for a stickershock economy in which itcan be hard to be sure what anything is really worth, and in which the blackmarket dollar increasingly dictates prices.
A movie ticket costs about 380 bolívars. Calculated at the governmentrate, that is $60. At the blackmarket rate, it is just $0.54. Want a largepopcorn and soda with that? Depending on how you calculate it, that is either$1.15 or $128.
The minimum wage is 7,421 bolívars a month. That is either a decent$1,178 a month or a miserable $10.60.
Either way, it does not go far enough. According to the Center forDocumentation and Social Analysis of the Venezuelan Federation of Teachers,a month’s worth of food for a family of five cost 50,625 bolívars in August,more than six times the minimum monthly wage and more than three times
10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
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what it cost in the same month a year earlier.
Dinner for two at one of this city’s better restaurants can cost 30,000bolívars. That is $42.85 at the blackmarket rate or $4,762 at the officialexchange rate.
Inflation has gotten so bad that auto insurance companies havethreatened to issue policies that expire after six months, to minimize the riskfrom the soaring cost of car parts.
A gallon of white paint cost almost 6,000 bolívars on a recent Tuesday. Atthe same store on the following Friday, it cost more than 12,000 bolívars.
With crucial legislative elections scheduled in December, the governmenthas begun to make refrigerators, airconditioners and household appliancesavailable to government workers and the party faithful at rockbottom prices.One government worker said he had bought a Chinesemade 48inch plasmatelevision for 11,000 bolívars, or just $15.71 at the blackmarket exchange rate.
Mr. Maduro blames an “economic war” waged by his enemies, foreign anddomestic, for the country’s problems. But most economists say the problemsare caused by the fall in oil prices and by the government’s policies, includingstrict controls on prices and foreign exchange for imports.
As the crisis has unfolded, Mr. Maduro has been hesitant to make changesthat even top officials say are needed, like raising the price of gasoline, whichis so heavily subsidized that it is virtually free — perhaps because he is fearfulof a backlash before the elections.
Things get stranger by the day.
Need a new car battery? Bring a pillow, because you will have to sleepovernight in your car outside the battery shop. On a recent night, more than80 cars were lined up.
10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
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Want a new career? Plenty of Venezuelans have quit their jobs to sell basicgoods like disposable diapers or corn flour on the black market, tripling orquadrupling their salary in the process.
Need cash? O.K., but not too much. Some A.T.M.s limit withdrawals tothe blackmarket equivalent of about 50 cents.
Given the chronic shortages of basic goods, supermarkets and pharmaciesfill long rows of shelves with a single product. One store recently had bothsides of an aisle lined with packages of salt. Another did the same thing withvinegar. A pharmacy had row after row of cotton swabs.
But among all the shortages here, one of the most notable is a shortage ofpaper money, especially the coffeecolored 100bolívar notes that are thelargest in general circulation (blackmarket value, about $0.14) and feature aportrait of Simón Bolívar.
“You want to understand why there’s a lot of money and there’s nomoney?” Ruth de Krivoy, a former Central Bank president, asked with a ruefullaugh. She said the main problem was that the government had failed torespond to rapidly rising prices by issuing largerdenomination bills, like a1,000 or 10,000bolívar note. So people need many more bills to buy thesame goods they bought a year ago.
Also, as people resort to the black market to buy more goods that cannotbe found in stores, transactions that could once be made with debit or creditcards are now conducted with cash. That creates logistical problems, as banksmust move around huge amounts of paper money and A.T.M.s empty outmore quickly.
Mr. Maduro is certainly aware of the symbolic impact of issuing largerbills with more zeros — and the inevitable comparison it would strike with hispredecessor and mentor, Hugo Chávez. In 2008, Mr. Chávez issued new billsand knocked off three zeros from a currency that had long suffered from
10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
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devaluation and inflation, renaming it the strong bolívar.
Today, the bolívar is anything but strong.
The other day, Jaime Bello, an airline mechanic, visited his bank, thegovernmentrun Banco del Tesoro, only to find that its three cash machineswere out of money. He recalled an earlier visit when he went to withdraw2,000 bolívars and stood listening to the whirring sound as the machine spitout a great stack of 5bolívar notes, each worth less than an American penny.He pulled out the stack of 200 bills and then waited while the machinecounted out 200 more.
“It’s crazy,” he said. “We’re living a nightmare. There’s nothing to buy,and the money isn’t worth anything.”
The crisis has also meant opportunity for those willing to stand in longlines to buy cheap governmentregulated goods that they can resell at a profit.
“I said to myself, ‘I can make more doing this,’ and I quit my job at thehair salon,” said Geraldine Cassiani, who left her job as a manicurist inFebruary for a career on the black market. She said she now earned four to fivetimes what she had before.
On a recent trip to the supermarket, she used contacts at the store to skipthe line outside and bought four packages of disposable diapers, even thoughshoppers were supposed to be limited to two each. Ms. Cassiani already had a“client” lined up to buy the diapers for almost three times what she paid: anurse who could not take time off to stand in line.
Mr. Maduro regularly goes on television to denounce black marketeersand to blame them for shortages and high prices.
“Partly, I think that what I’m doing is bad,” Ms. Cassiani said, adding thatshe did not raise prices as much as some black marketeers. A single mother,she said she had to provide for her child.
10/18/2015 Few in Venezuela Want Bolívars, but No One Can Spare a Dime The New York Times
http://www.nytimes.com/2015/10/19/world/americas/fewinvenezuelawantbolivarsbutnoonecanspareadime.html?hp&action=click&pgtype=Homepage… 6/6
“Necessity has a dog’s face,” she said.
María Eugenia Díaz contributed reporting.
© 2015 The New York Times Company