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PostHow Do Venezuelans Survive Day to Day? (José Ignacio Soler, Venezuela, 08/28/19 3:19 pm)
John E. asked me how Venezuelans are coping with the critical economic situation. A complete answer to this question presents somewhat of a paradox.
A few years ago Caracas was a noisy, vibrant and chaotic city of 5 or 6 million people. Nowadays its total population is uncertain but it has reduced significantly. You can notice this reduction in the near-absence of traffic jams, so abundant before, and the empty streets at night. In the suburban neighborhood where we live, there are more than 90 empty or abandoned houses of a total of around 300.
According to recorded emigration data, 5 million Venezuelans have fled the country in the last 2-3 years, which amounts to 20-25% of the total population. This is very significant not only because it represents the largest emigration wave in the history of the continent in contemporary times, but also the global consumption demand of basic products has been reduced in the country. This social drama, together with other economic facts I will mention, now helps to explain how people survive in the present crisis.
I have recently mentioned the government's total loss of control of the economy. Hyper devaluation of the local currency, unregulated dollarized prices, a critical or total reduction of goods and services and a significant reduction of consumption, and so forth, are the main ingredients for the current economic situation.
The paradox is that despite the crisis, it is possible to find supermarkets full of all kinds of imported products, much more than a few months ago because the free importation of products is allowed but at prices far beyond the reach of 80% or 90% of the population. Most of us to go to informal street markets, trucks that transport and sell fruit, vegetables, eggs, meat and other local farm products at cheaper prices, which however increased by an uncontrollable inflation of approximately 10% per day. Processed goods or other packed products are 90% imported and they can be obtained at very high and dollarized prices in formal grocery stores and supermarkets.
A small sector of the population, generally the regime's sympathizers or clearly people opportunistically using this privilege, are beneficiaries of government subsidies in the form of monthly boxes of food and products, called CLAPs, (Comités Locales de Abastecimiento y Producción) at relatively low prices. It seems this form of selective benefit is used for influence-peddling, corruption and political dominance.
The dollarization of trade is so generalized that all kind of products and services are quoted in dollars. For instance, right now we have a gardener cutting the grass in our house charging US$20 for the job, or the maid is paid for her work US$20-30/day. A few days ago I paid US$3 for a wristwatch battery, etc. These amounts might seem perhaps reasonable in other places, but in this country where the monthly minimum salary right now is only US$2 it is outrageous and leaves most of the population on the edge of critical poverty and malnutrition.
The medical service sector and drug supplies face similar dramas. There is now more availability of supplies but at unreachable prices--of course in US$. The risk of a mortal health crisis is perhaps reduced for some selective sectors but continues to be high for most of the population. There are no official public statistics but the number of casualties due to lack of medicines, malnutrition, or various medical problems is notoriously higher.
The other side of the paradoxical situation involves the services sector and gasoline. Electricity, garbage collection, telephone services, etc., are all officially owned by government, so they are artificially low; for instance I pay US$5 dollars/month for electricity, though most people in many poor areas of the city steal power directly from the electricity poles and this illegal action is generally permitted. Other public services are completely different. For instance to request a passport they charge you more than US$100, making it very hard for poor people to obtain this document if they want to emigrate.
But the most incredible and bizarre situation concerns gasoline. Gas is free! Yes, you might think this is unbelievable, but such things happen in this country, and not because gasoline is abundant, on the contrary it is scarce and frequently we must wait in lines for hours, in some areas for days, to get it. The question is that the price is so low (aprox. US$0.00000000000428 per liter, it has not been increased in a year or so) and the local inflation is so high (around 1,000,000% in a year). So gas is virtually free. This fact together with the scarcity of cash, makes practically impossible to pay for it and they let you leave the gas station without having paid anything.
In conclusion, day to day, there is no other way for people than to survive and adapt, with enormous resilience, to abnormal or adverse conditions. This is possible for Venezuelans because their natural humorous and optimistic character, perhaps too optimistic in my view.
JE comments: Nacho, this is a priceless lesson on the Hemisphere's most dysfunctional economy. I'm going to make your post required reading for my students. Gracias for taking the time to share your experiences with WAIS.
I must ask a delicate question that's no doubt on many minds: why do you stay?