World Economy

Venezuela’s Vicissitudes

Venezuela’s Vicissitudes  Venezuela’s Vicissitudes

Sorcery is alive and well in Venezuela, once the richest country in South America, now an economic disaster. Hand over $100 and–hey presto!–you get a wad of notes the size of two house bricks: 100,000 bolivars.

But that’s an all-too-simple trick on the black market. Shopping for chicken, rice, toothpaste, soap, flour and toilet rolls has been turned into a vanishing act. The government’s fixed prices for staples are at such low values shops lose money if they sell them–so they don’t, BBC reported.

Pop-up queues appear when rumors swirl that a supermarket might have a batch of staples at the fixed price. That people in the country with the biggest oil reserves in the world queue for food is black magic indeed.

Four soldiers in flamboyant uniforms–black shakos, red feathers, gold brocade–guard the shaman responsible. Hugo Chavez lies in his tomb, a hero to his supporters, to his enemies the founder of a political cult. The mausoleum smacks of a shrine to a god suffering, like his country, from devaluation.

Alive, Chavez - “El Comandante” - at least had charisma. The sorcerer’s apprentice, President Nicolas Maduro, used to drive a bus. The bad news for Chavismo–the movement or cult Chavez created–is that wheels on the Maduro bus are falling off.

Under Maduro the bolivar is currently suffering from inflation of 141%, according to the government’s own figures. The IMF predicts it will hit 720% later this year.

One number is that the country is $120 billion in the red, with oil revenue–responsible for nine-tenths of the state’s export revenue–collapsing. Without the oil money, the country can’t feed itself.


There are $10 billion in debt payments due later this year and Venezuela can’t borrow easily because the international market suspects it will default. Investors are already spooked because it has expropriated billions of dollars worth of foreign-owned companies.

Governing party MP Ramon Lobo told Newsnight: “The economic war has become even more vicious. It’s an attack on the real economy. The oligarchs who still dominate food production are looking for a way to hang us by cutting production on purpose.”

Murder numbers are notoriously dodgy in South America, but Caracas, by some estimates, suffered nearly 4,000 murders last year, making it one of the most dangerous cities in the world.

Petrol here is the cheapest in the world–an absurdity that Maduro dare not address lest he trigger riots, like the “Caracazo” chaos in 1989 in which hundreds died.

Financial meltdown, political stalemate: it might not come to it but some people fear this could lead to violence and even a military coup.