FOREWORD: My Venezuela plans changed completely upon arrival to its capital city, Caracas. What at first was going to be a mad dash to safety, a quick bus transfer to avoid my imminent assassination, turned into a fascinating week of insight into how social complexities play out in a city with some of the worst wealth distribution and highest homicide rates in the world. So how does it play out? For me, my days were filled with laughter, home-cooked meals, and friends I hope to maintain well into the future. More than anything it reinforced my belief that people are people, no matter where they live. However, after my travel high faded I also realized the hardships Venezuelans deal with on a daily basis were very, very real.
I was in love. Hook, line, and sinker. Her name was Caracas. Blindly, I daydreamed a future together, me with a professional job, lunchtime espressos at sidewalk tables, maybe even a dog (anything but a poodle) to walk down swanky Altamira district’s wide boulevards after work before retiring to my furnished apartment, feet up, tea kettle on. Somehow in my daydreams there was always food on the table, elaborate dinners which in reality I couldn’t cook to save my life.
It was easy to let my thoughts wander this way: my dollars were powerful. On the black market I could exchange dollars for almost three times as much as the official government rate. Black market exchange rate: US $1 = 6,500 Bolivares; the official rate: US $1 = 2,500. Imagine walking through a store where everything is on sale, where the sloppily painted “Everything Must Go” windows actually fulfill their snake oil promises. Caracas was my playground.
Then I awoke. My dollars ran out, and it was legally impossible to withdraw more from ATMs.
President Chavez’s Venezuelan United Socialist Party (PUSV) has currency controls in place to keep capital from flowing out of the country. Many of the extremely wealthy, the perpetual oligarchies, business owners, and bankers fear Chavez’s socialism will redistribute their wealth, or flat out rob them of it. These fears are understandable—stealing on both sides has been a part of life since independence in 1811. By limiting access to dollars and keeping the exchange rate fixed the government has made it difficult for the wealthy to send their money abroad, to harbor their capital outside of socialism’s looming reach.
Taking people’s liberties away is never the best option. However, the contrasts of shopping malls against shanty towns, barefoot beggars next to Lamborghini stores intrinsically told me something needs to be done to bridge the inequality gap. Is currency control the best option, the only option? The truth is the whole situation confuses me. The current Venezuelan system goes against everything I’ve learned in both business school and growing up in the United States. The rules however are not the same in Venezuela, the economic markets have never been in balance, the playing field never level.
The political blowback meant I now had to pay three times as much for things I previously bought at bargain. A cocktail at a bar: US $20. Taxi ride home once the metro closed: US $25. A burger from a street vendor: US $11. A liter of milk at the grocery store: US $4. A can of Coke: US $2.
The higher prices seemed outrageous, unfair, unjust, discriminatory.
Then I realized that I had been living in a bubble. The higher prices I cursed were the same ones on which single mothers raise children, the same ones families manage to make ends meet, the same ones college students deal with during their studies, the same ones the elderly battle to receive proper medical care into old age.
The average monthly GDP for an educated Venezuelan: US $1,072. The uneducated earn much, much, much less. The math doesn’t work out, the inflation is too steep, the speculation too rampant, the cost of living too high. A common theme I heard from both those who oppose and support Chavez’s social experiment: a drastic change is in the air. For the sake of my new friends, I hope it’s for the best.