How Venezuela is fast becoming a cashless society – Stephen Gibbs

Publicado en The Times

Poor Venezuelans have turned to barter as the currency collapses and banknotes run out, but the rich keep getting richer

Por: Stephen Gibbs

There is a memorable moment in Ian Fleming’s novel Thunderball, when Ernst Blofeld reveals where he deposits his ill-gotten gains. He avoids the pound and the dollar. The two “hardest currencies” in the world, he says, are the Swiss franc and the Venezuelan bolivar.

In booming postwar oil-rich Venezuela, he was probably right, but had he stuck with the bolivar until now Blofeld would have gone bust. Since Nicolás Maduro took over from Hugo Chávez as president in 2013 it has easily been the worst performer in the world. On the black market it has lost 99.81 per cent of its value against the dollar.

The consequences of that, and inflation approaching 1,000 per cent, can be seen everywhere in Caracas. The latest twist is that cash, fistfuls of which are needed to buy anything, is disappearing.

The Maduro government, ever optimistic that there is light at the end of the dark tunnel of its economic crisis, has failed to order enough banknotes to meet demand.

So the country is fast becoming cashless. In some of the poorer barrios around Caracas, where many people do not have bank accounts, residents are getting by with a mix of barter and complicated IOUs. “People are desperate, but so far, also understanding. We are all in the same boat,” says Joel, a taxi driver.

Elsewhere Venezuelans are getting used to paying for even the smallest purchases with a debit card. Signs declaring “Hay punto”, meaning, “We have a machine that takes cards”, have become a form of advertising from hot dog salesmen to beach vendors.

But Venezuelans, or at least the country’s bureaucracy, have not forgotten the days when the currency had power. At the VIP branch of the BBVA Provincial bank in Caracas, customers, many in business attire, queue patiently to cash cheques. The daily limit is 25,000 bolivars. Not that long ago it was a substantial amount. Now it is about 80p.

Before any money is handed over you need to show ID and have your fingerprints and photo taken. The crisp bank notes, each worth less than 10p each, are diligently counted out — twice.

Who Wants to be a Millionaire? was broadcast on Venezuelan TV until recently. The million-bolivar jackpot in the last series was worth about £50. Did it make the programme any less gripping, or the competitors seem any less ecstatic when they won? Oddly it seemed to make no difference.

President Maduro has pledged to defend the poor by repeatedly raising the minimum salary. He has done so five times this year

The most serious consequence of a crashing currency is that the income divide between those that do have access to dollars, versus those who do not, becomes ever more obscene. The super-rich are made up of those who have savings abroad and anyone with government connections who can use the official exchange rate — reserved supposedly for essential businesses — which remains at the ludicrous level of ten to the dollar. A licence to turn those worthless bolivars into fortunes.

Outside the better restaurants of Caracas on a Friday evening, the absurdity of it all is in full view. After a lavish and boozy steak dinner, perhaps costing £8, customers pompously hand the parking valet a tip of 2,000 bolivars (5p) as they step into their $100,000 (1.9 trillion bolivars) armoured Toyota 4Runners.

President Maduro has pledged to defend the poor by repeatedly raising the minimum salary. He has done so five times this year. His boast is that that is a “record”, in comparison to previous Venezuelan governments. The latest rise brought the base salary to a pre-benefits total of £7 a month.

After the announcement, made live on TV, Mr Maduro boomed that such generosity was possible “only in revolution”. The studio audience burst into applause.


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