Where have all the dollars gone?
Reading the Venezuelan press, it’s easy to forget this is a petro-state, and that the barrel of oil is selling at prices close to its historic high.
Just today, we found out that
- airlines can say goodbye to repatriating their profits at the agreed-upon rate, as expected;
- scarcity of basic staples has shot up to 60%, as expected;
- the government had to raise the prices of regulated food items in government stores, sometimes as much as 60%, also as expected;
To put it all in perspective, Últimas Noticias has an excellent story about the day-to-day struggle of poor Venezuelans to find the things they need. One of several money quotes:
“Approximately a year ago, María Rodríguez and her husband stopped selling basic staples from their little shop, located in a small terrace in Mamera, a poor neighborhood up the hill from the Antímano boulevard, in western Caracas. “Everything has gotten really difficult [to obtain]. It’s not even worth it to go to wholesalers in Quinta Crespo or the La Yaguara Makro because, besides having to stand in line and pay for transportation, they don’t let you buy wholesale, you can only take two or four packages per person. That is only good for us, but not for reselling. Now, we just get by through selling junk food such as candy and chocolates (which we get from a local wholesaler), root beer, and soda, which distributors continue bringing us.”
The same story also repeats the much-vaunted line about how Venezuelans are consuming more calories than ever before. Of course, if you can’t buy chicken or flour, and instead you have to consume Torontos and Maltín Polar, you caloric intake is going to go up – way up! But is that a good thing? It’s no wonder there is one ranking where we are doing exceedingly well – obesity rankings.
This confirms the anecdotes we have been hearing about: in the first few months of the year, the supply of currency in the economy dried up almost completely. We were even hearing about how activity in our major ports was down to a trickle. Scarcity is simply the end product of a decision made by someone, somewhere, to simply shut down the supply of dollars.
Typically we try to explain this several ways: it’s the Cuban subsidies, or the boligarchs that are stealing the country’s money, or the fire in Amuay that is forcing us to import everything, or the sales in advance to China.
Me? I think it’s all of this, and then some. And while some people think the worse may be over, I have my doubts.