Crisis in Venezuela: How people live daily with shortages and inflation of 1,000,000%

One of the reasons that the institutional crisis in Venezuela can be understood is related to the economic disaster that led this country to live today with inflation level estimated at 1,000,000% per annum, shortage of basic commodities, almost non-existent private jobs, growth of the economy in black, wages paid weekly for the permanent rise in prices and the growing dependence on money that the 3 million Venezuelans living abroad can send .

The statistics clearly reflect the consequences of the economic collapse of Venezuela, which some economists badociate with the decline in the international price of oil, the main raw material of the country. Between 2003 and 2017 Venezuela's GDP has fallen by 48%. This means that at that time, the total size of the economy had been halved.

In 2010, GDP per capita was $ 12,000, a level similar to that of Argentina or Uruguay. Today, this index shows that the Venezuelan economy has a per capita gross product of $ 2,700, so behind Bolivia and near Hondurasamong the countries with the lowest rates on this continent.

A rise in prices like that which has been occurring for years in Venezuela has distorted the value of its currency, the bolívar. Due to the hyperinflation of recent years, the currency had to change its name several times.

A single example suffices to understand the price dispersion in Venezuela. Naphtha costs pennies on the dollar. But in bolivars, their value is so low that, when bills have been added, there are so many zeros, there is no way to pay. That's why the fuel, in practical terms, ends up giving way. The motorist ends up tipping the beach at the petrol stations as a means of "informal" reloading.

The economist of the consulting firm DinámicaVenezuela Homero Gutiérrez said TN.com.ar: "For us, the forecast of inflation does not reach a million, it is 400 000%, but at these levels, it is no longer relevant if it is one or two million . " He explains that the price update is daily, the payment of wages is already monthly and the increase of the minimum wage is decreed every two months.

Another aspect of everyday life is that uncontrolled inflation destroys public transport. The dollarized entries of the vehicles made it impossible to repair the cars, which were dilapidated. The system has been replaced by private transport, with pickups that transport people and negotiate an offer and demand the price of the ticket.

Many Venezuelans survive thanks to the money that their parents working abroad can transfer. Although the funds sent are in dollars, the government allows Venezuelan citizens to receive this money after converting it to the official exchange rate. Since there is an exchange of money for years, "wait until the last day of the week to make the transfer. If you transfer it on a Monday, if you do not spend money on the same day, you will be able to buy a lot less. It puts a lot of stress on people, it's a race against time, "said Gutierrez.

The lack of inputs and shortages are another feature of Venezuela's economic collapse. Much of the food is imported and the way to finance these purchases, under the Chavez regime, was to use the dollars that the country received for the export of oil. When commodity Its international price fell, foreign exchange entry began to decline and the offer began to become more and more difficult.

Products such as milk powder, flour, meat, chicken, eggs, are some of the products that are more difficult to obtain. "In shops where the working clbad has access to rice, wheat flour does not exist, but if you go to the black market, that's the case. growing growth of the black economy"said Gutiérrez.

The economist considers that currently Venezuelan economy operates "three-speed". On the one hand, in rural areas directly the exchange occurs by barter, without money. The second "speed" is that which affects the bulk of the population: to make transactions in bolivars, with goods related to the price of the dollar. And on the other hand, for a minority, but growing, that's ignore bolívar as currency of exchange and negotiate directly with US notes.