Economic Crisis in Venezuela Leads to a Black Market Among Travelers

Economic Crisis in Venezuela Leads to a Black Market Among Travelers /
Ivan Garcia
Posted on December 28, 2014

It is 7:30 PM in a commercial shopping district in San Diego,
Califormia. Four Venezuelan tourists approach Spanish-speaking customers
browsing among tablets, smart phones, flat-screen TVs and laptops with a
business proposition.

"If you are going to buy something with cash, please let me pay for it
with my credit card and you can give me the money instead. The thing is
that in my country, Venezuela, getting hard currency is very
complicated," says a young woman in a slow, deliberate voice.

Venezuelans can find such "swiping-the-card" transactions difficult in a
country like the United States where people rarely make large purchases
with cash. But on this particular warm autumn night, one Venezuelan is
lucky.

A group of Latin American journalists who were attending a workshop in
San Diego did some bartering. To understand the official exchange rates
and the black market for US dollars in Venezuela requires a quick
doctorate in economics.

According to these Venezuelan tourists there are three different
exchange rates. The official one is for necessities but varies when it
comes to dollars for travel or for purchasing raw materials used in
products the government considers luxuries.

In the treacherous streets of Caracas the US dollar trades at a
different rate of exchange on the black market. These different types of
exchange have contributed to runaway inflation of almost 61% and an
uncontrollable rise in prices for staple foods such as powdered milk
powder and cornmeal.

Venezuelan tourists describe how an Apple laptop is two and a half times
more expensive in Venezuela than in any other country in the world due
to the devaluation of the national currency, the bolivar.

Because of the economic crisis, business seizures and rules governing
fixed prices, many people — especially those in the middle class — have
been forced to turn to the informal economy to weather the storm.

The young Venezuelan woman, a mother with a young daughter, told me that
despite having both an undergraduate and a graduate degree, she takes
advantage of trips abroad to "swipe the card," or to buy merchandise on
credit to resell in Caracas.

"We're becoming nothing more than peddlers thanks to Maduro and the way
he blindly copies Cuba's inefficient socioeconomic system and its
controls," she says.

Another Venezuelan bought two Sony Play Station 3 video games. "One is
for my kids; the other is to sell. I have to take advantage of the
$1,800 I got at the official exchange rate. If I can lay my hands on a
few hundred dollars, I can exchange them for 110 "bolos" (bolivars) when
I get back to Venezuela. And with the money from the sale of the video
game, I'll probably be able to have decent Christmas dinner."

Whether it be California, Florida or Havana, the unstoppable economic
crisis has turned many Venezuelans into brokers. In central Havana's
Carlos III shopping mall Venezuelans can often be seen "swiping the card."

Transactions involve buying a freezer, television or furniture for a
client and paying for the purchase with a credit card. Later the client
reimburses the credit card holder with cash in the form of convertible
pesos.

They often have an angle. Joel (not his real name), a medical student,
notes that "for purchases of several hundred CUCs (convertible pesos),
we offer a 15% to 20% discount. Cubans, who are nobody's fools, agree to
this. Then with those convertible pesos, we buy dollars on the black
market at 95 or 96 cents per CUC. Back in Venezuela, those dollars we
got through transactions or the official currency exchange, we sell on
the black market. It is a windfall. This way I can support my family
without any problem."

Maura, a Venezuelan on a visit to Cuba, is getting ready for her wedding
to a Cuban. She wanders the markets where things are priced in Cuban
pesos and buys large quantities of bath soap and detergent.

"In Havana a bar of soap costs five to six Cuban pesos, around twenty
cents to the dollar at the official exchange rate. I have already bought
eighty bars of soap to resell in my country.

Liudmila, a resident of Caracas' violent Petare neighborhood, took
advantage of a training trip to the island to purchase over-the-counter
and prescription medications through a Venezuelan friend who is a
medical student in Cuba.

"It's the only way I have to get medications for my relatives," she
says. "For me it's profitable because I get dollars at a favorable
exchange rate since I am here on an official visit. Life is hard for
everyone."

Iván García

http://translatingcuba.com/economic-crisis-in-venezuela-leads-to-a-black-market-among-travelers-ivan-garcia/