(AFP) — Whether paying for a manicure, an evening gown or a litre of milk, in Venezuela the US dollar can buy anything, so long as you’re discreet.
“Of course we take dollars, we can even try your credit card if it works there’s no problem,” said a restaurant owner in Caracas, keen to be both welcoming and pragmatic, and to remain anonymous.
Given Venezuela’s economic crisis. there’s no question about turning away a customer, at the country’s own currency, the bolivar, has been crippled by hyperinflation.
Back in August, President Nicolas Maduro devalued the bolivar by 96% as one of a raft of economic reforms he hoped would boost an economy in meltdown.
But the bolivar has lost 98% of its value since. A US dollar is now worth around 3,000 bolivars and the rate is changing every day.
It has left the salaries and savings of millions practically worthless.
The International Monetary Fund (IMF) says inflation will hit a mind-boggling 10,000,000% this year — it ended 2018 at 1.3 million percent.
Since 2003, the government has tried to enforce a monopoly on foreign currency reserves.
Its detractors have accused top officials of exploiting the misery of the wider population by acquiring foreign currencies at official rates and then selling them for a huge profit on the black market at a wildly inflated exchange.
“We started doing it under the table,” said the restaurant owner. “We started taking dollars two or three months ago … we’re supposed to declare everything in bolivars.”
Asked if it was illegal, he added with a smile: “I don’t know, but it’s not authorized.”
Madeleine runs a small clothing shop with shiny dresses and sparkling shoes aimed at the middle classes that have some money to burn.
All prices are listed in US dollars. “Of course! And if anyone asks, I calculate (the price) in bolivars at the day’s rate. Otherwise, I lose too much money. I import everything from Los Angeles. I’ve got to keep the business going,” she said, adding that she knows it’s illegal but says she has little choice with the bolivar losing value every day.
Like the restaurant owner, Madeleine doesn’t want to give her true name, nor that of her shop, nor be pictured or filmed.
“I could have done like countless others and left the country, but I preferred to stay and work here. But at any moment, the government could come and close my business,” she said.
It’s not even a luxury store but the dresses she sells cost around US$50, eight times the minimum monthly wage of 18,000 bolivars — around US$6.
Those who earn that much can just about buy two kilograms of rice and as much flour.
Crisis
Venezuela may be facing a humanitarian crisis and rising poverty due to the lack of basic necessities such as food and medicine — meaning people need dollars to survive — but there’s another side to the country.
The United Nations estimates that 2.7 million Venezuelans have left the country since 2015 and support their families back home with remittances.
A recent study by three Caracas universities found that half the country’s households are at risk of food insecurity.
And although the government has shown signs of loosening its foreign currency rules, the US dollar remains king and access to it is fundamental for those merely trying to get by.
