When I first came to the United States, I was very surprised at the fact that very few people knew what was going on in my country: Venezuela. The few people who actually knew we were in some kind of economic crisis, was because their economics teacher talked about it in class. Yet, no one really knows is how critical the situation really is.
To give you a brief overview, here is what you must know:
In the year 2015, the inflation rate was 165 percent, and this year alone the inflation has already been about 270 percent. Why is this happening? This is happening because the government lacks the resources to import goods, therefore creating scarcity nationwide. When you walk into a store in Venezuela you can’t buy basic products like flour, rice, milk, eggs, etc. You might be wondering why we don’t produce basic goods ourselves, but the thing is: we can’t. Companies have not only been expropriated and shut down by the government, but they also lack the resources to produce goods.
When you have a scarcity like Venezuela, and you combine it with a minimum salary of 24,853 Bolivares Fuertes (a month), you get what we call bachaqueros. These are simply people who line up in stores for hours at a time in order to get the few products that came in, only to resell them at a higher price. For example, a bag of sugar is sold for 16 bs.F at the store, and then resold by bachaqueros at 585 bs.F. This means it is 36.5 times more expensive than it should be.
This whole bachaquero situation has become a pressing social issue because people have gotten into physical fights over who gets the product. Not only that, but lower income families cannot afford to pay for a bag of sugar at 585 bs.F, or a pack of toilet paper for 6,000 bs.F. People are frustrated, angry, and desperate because they cannot feed their families.
Now let’s talk about the devaluation. The actual price of the dollar should be 308 Bs.F, but since the Central Bank claims to have no dollars, people have to buy them in the black market for a price of 1,142 Bs.F. Which means companies who import goods have to buy products at the 1,142 Bs.F, and then sell them at the prices dictated by the government, which are too low, causing supermarkets and stores to be at a loss of profit.
You would think that a salary of 24,853 bs.F is pretty decent, but what if I told you it is equivalent to 21.7 dollars? You would think that should be enough to get a person through the month okay, but that is not the case. With 24,000 bs.F you can get what you could get with $22 dollars, which is not much. Try feeding a family with $22.
The thing is, it should not be like this. Venezuela is the country with the second biggest reserves of oil, it is home to one of the most diverse landscapes (beautiful beaches, rainforests, deserts…) and it counts with large reserves of natural resources like: diamonds, gold, iron ore and natural gas. The whole problem is the government is neglecting the situation, and pretending everything is fine, when the country is actually falling apart.
