Comments due by Nov. 6, 2015
Pity the bolívar, Venezuela’s currency, named after its independence hero, Simón Bolívar. Even some thieves don’t want it anymore.
When robbers carjacked Pedro Venero, an engineer, he expected they would drive him to his bank to cash his check for a hefty sum in bolívars — the sort of thing that crime-weary Venezuelans have long since gotten used to. But the ruffians, armed with rifles and a hand grenade, were sure he would have a stash of dollars at home and wanted nothing to do with the bolívars in 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 the extent to which Venezuelans have lost faith in their economy and in the ability of the country’s 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 thoroughly domestic confidence in the economy has crashed.
The International Monetary Fund has predicted that inflation in Venezuela will hit 159 percent this year (though President Nicolás Maduro has said it will be half that), and that the economy will shrink 10 percent, the worst projected performance in the world (though there was no estimate for war-torn Syria).
That would be a disastrous drive off the cliff for a country that sits on the world’s largest estimated oil reserves and has long considered itself rich in contrast to many of its neighbors.
But the real story goes beyond numbers, revealed in the absurdities of life in a country where the government has refused for months to release basic economic 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 has soared, the government has insisted on keeping the country’s principal exchange rate frozen at 6.3 bolívars to the dollar.
That astonishing disparity makes for a sticker-shock economy in which it can be hard to be sure what anything is really worth, and in which the black-market dollar increasingly dictates prices.
A movie ticket costs about 380 bolívars. Calculated at the government rate, that is $60. At the black-market rate, it is just $0.54. Want a large popcorn 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 for Documentation 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 what it cost in the same month a year earlier.
Dinner for two at one of this city’s better restaurants can cost 30,000 bolívars. That is $42.85 at the black-market rate or $4,762 at the official exchange rate.
Inflation has gotten so bad that auto insurance companies have threatened to issue policies that expire after six months, to minimize the risk from the soaring cost of car parts.
A gallon of white paint cost almost 6,000 bolívars on a recent Tuesday. At the same store on the following Friday, it cost more than 12,000 bolívars.
With crucial legislative elections scheduled in December, the government has begun to make refrigerators, air-conditioners and household electronics available to government workers and the party faithful at rock-bottom prices. One government worker said he had bought a Chinese-made 48-inch plasma television for 11,000 bolívars, or just $15.71 at the black-market exchange rate.
Mr. Maduro blames an “economic war” waged by his enemies, foreign and domestic, for the country’s problems. But most economists say the problems are caused by the fall in oil prices and by the government’s policies, including strict controls on prices and foreign exchange for imports.
A recent filing by the Venezuelan government to the Securities and Exchange Commission in the United States indicated that imports last year were barely half of what they were in 2012. That means fewer products on store shelves, less medicine in hospitals and fewer materials for manufacturers to produce goods here — all leading to widespread shortages and higher prices.
But as the crisis has unfolded, Mr. Maduro has been hesitant to make changes that even top officials say are needed, like raising the price of gasoline, which is so heavily subsidized by the government that it is virtually free to consumers — perhaps because he is fearful of a backlash before the elections.
Meanwhile, things are getting stranger by the day.
Need a new car battery? Bring a pillow, because you will have to sleep overnight in your car outside the battery shop. On a recent night, more than 80 cars were lined up.
Want a new career? Plenty of Venezuelans have quit their jobs to sell basic goods like disposable diapers or corn flour on the black market, tripling or quadrupling their salary in the process.
Need cash? O.K., but not too much. Some A.T.M.s limit withdrawals to the black-market equivalent of about $0.57.
Given the chronic shortages of basic goods, supermarkets and pharmacies often fill long rows of shelves with a single product. One store recently had both sides of an aisle filled with packages of salt. Another did the same thing with vinegar. A pharmacy had row after row of cotton swabs.
But among all the shortages here, one of the most notable is a shortage of paper money, especially the coffee-colored 100-bolívar notes that are the largest in general circulation (black-market value, about $0.14) and feature a portrait of Simón Bolívar.
This shortage is surprising, because the government has been printing money at a phenomenal clip to finance its operations and pay its employees. Central Bank of Venezuela data show that the bills and coins in circulation more than doubled during the 12 months ending in July, which economists say is one of several forces driving inflation.
“You want to understand why there’s a lot of money and there’s no money?” Ruth de Krivoy, a former Central Bank president, asked with a rueful laugh. She said the main problem was that the government had failed to respond to rapidly rising prices by issuing larger-denomination bills, such as a 1,000- or 10,000-bolívar note. So people need many more bills to buy the same goods they bought a year ago.
Also, as people resort to the black market to buy more goods that cannot be found in stores, transactions that could once be made with debit or credit cards are now being made with cash. That creates logistical problems, as banks must move around huge amounts of paper money and A.T.M.s empty out more quickly.
“There is a myth that by printing larger notes, they would acknowledge or validate inflation and higher prices,” Ms. de Krivoy said.
Mr. Maduro is certainly aware of the symbolic impact of issuing larger bills with more zeros — and the inevitable comparison it would strike with his predecessor and mentor, Hugo Chávez, who was president for 14 years. In 2008, Mr. Chávez issued new bills and knocked off three zeros from a currency that had long suffered from devaluation and inflation, renaming it the strong bolívar.
Today, the bolívar is anything but strong.
Different banks have different rules, but most limit individual A.T.M. withdrawals to 2,000 bolívars, or $2.86 at the black-market rate. They also set a daily maximum withdrawal that is generally two or three times that, so customers frequently make multiple withdrawals, one after the next, leading to long lines at the machines.
There are even stricter limits on withdrawals using debit cards from another bank. Some A.T.M.s limit such withdrawals to 400 bolívars, or about $0.57 on the black market, enough to buy a dozen eggs.
The other day, Jaime Bello, an airline mechanic, visited his bank, the government-run Banco del Tesoro, only to find that its three cash machines were out of money. He recalled an earlier visit when he went to withdraw 2,000 bolívars and stood listening to the whirring sound as the machine counted out the bills. To his astonishment, it spit out a great stack of 5-bolívar notes, each worth less than an American penny. He pulled out the stack of 200 bills and then waited while the machine counted 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 cash crunch extends to people who bypass the A.T.M.s and go to the bank teller.
On a recent Friday, Milton Valverde hefted a black New Balance gym bag stuffed with 2,000 pink 20-bolívar notes, worth a total of about $57 at the black-market rate.
Mr. Valverde, a carpenter, said his boss sent him from bank to bank, with two bodyguards, to fill up the bag by cashing checks from clients — all to make the weekly payroll.
The crisis has also meant opportunity for those willing to stand in long lines to buy cheap government-regulated goods that they can resell on the black market.
"I said to myself, 'I can make more doing this,' and I quit my job at the hair salon," said Geraldine Cassiani, who left her job as a manicurist in February to sell goods on the black market. She said she now earned four to five times what she had before.
On a recent trip to the supermarket, she used contacts in the store to skip the line outside and bought four packages of disposable diapers, even though shoppers were supposed to be limited to two each. She already had a "client" lined up to buy the diapers for almost three times what Ms. Cassiani had paid: a nurse who could not take time off from work to stand in line to buy them.
Mr. Maduro regularly goes on television to denounce black marketeers and to blame them for shortages and high prices. Ms. Cassiani acknowledged that she was sensitive to such criticism.
"Partly, I think that what I'm doing is bad," she said, adding that she did not raise prices as much as some black marketeers. A single mother, she said she had to do what she could to provide for her child.
"Necessity has a dog's face," she said.
María Eugenia Díaz contributed reporting.
