Yosmar Sanguino says she struggles to put food on the table for her two daughters and three grandchildren in a low-income neighborhood of Venezuela’s capital.
By AP – Regina García Cano and Juan Pablo Arraez
Aug 11, 2021
She often whips up arepas – traditional flat, round corn patties – with butter and cheese. But it’s hard to afford even those few ingredients.
“There is food, but the money is lacking. Because if you buy one thing, you can’t buy the other,” she said. “If you buy butter, you can’t buy cheese. Or if you buy the cheese, you can’t buy the butter.”
And she’s among the relatively fortunate Venezuelans who have at least some access to dollars – money sent by a son who emigrated to the United States as the the South American nation’s social, political and economic crises worsened.
More than 40% of Venezuelan households receive some remittances from abroad, which last year were expected to reach $4 billion, according to the consultancy firm Econoanalitica, based in Caracas, the capital. The money often flows through a network of third-party foreign bank account holders who charge commissions, digital payment methods such as Zelle or via friends or relatives travelling home with cash.
The country’s socialist government two years ago gave up its long and complicated efforts to restrict transactions in dollars in favor of the local bolivar, whose value has been obliterated by the world’s worst inflation.
That has largely ended shortages that for years left markets with chronically empty shelves. But it means many Venezuelans – paid in bolivars whose value evaporates by the day – can’t afford what’s on those shelves.
The government last week announced it would lop six zeros off the currency — a million-to-1 change – with new bills as of Oct. 1. Currently, the 1 million bolivar note is the largest denomination. It’s worth roughly a U.S. quarter.
But without other measures, that would have little to no effect on the continuing erosion of value. The government already had cut three zeros in 2008 and five more in 2018.
Despite repeated multiplications of the official minimum wage earned by millions of Venezuelans, it still amounts to about $2 – not even enough to buy a kilogram of chicken.
Millions of Venezuelans anxiously wait for the semi-monthly arrival of a heavily subsidized box of goods that costs between 43 cents and 62 cents and usually includes corn flour, rice, oil, sugar, pasta and beans. Many scramble to make ends meet with side jobs – home bakeries, haircuts, car repairs, food deliveries, barter.
And for some, the ends don’t meet at all.
Per capita consumption of protein dropped 60% between 2013, when President Nicolás Maduro took office, and 2019, according to investment firm Torino Capital. Consumption of chicken plunged 82% during that period, while eggs’ fell 66%.
A report from the U.N. Food and Agriculture Organization found that roughly a third of Venezuelans reported they had no food stored up and 11 percent reported sometimes going a day without food. The U.N. World Food Program in 2019 reported that 6.3% of children under 5 years were acutely malnourished, 13.4% were stunted and 30% were anemic. About 24% of women between the ages of 15 and 49 were also anemic.
The value of the bolivar had been collapsing for years despite – or because of – government efforts to control the exchange rate. It rapidly expanded the money supply even as there was less to spend it on, with an economy that was producing fewer goods and eventually exporting less oil.
But massive blackouts in 2019 began to change the dynamic, said Dagnelly Duarte, an economist for Torino Capital, which has a special focus on Venezuela.
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Read More: AP – Hyperinflation, US dollars pricing out Venezuelan consumers
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