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Venezuela: Inside the Economic Crisis Affecting Millions Outside the Caracas Bubble

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For this article, El American gathered the testimony of more than fifteen Venezuelans in Venezuela.

May 10. Gisela, 52, woke up at 4 am. She got dressed, started the car, and drove to a gas station in Ejido, a town near the Andean city of Merida, located more than 600 kilometers southwest of Caracas. She did not take her youngest son to school that day because she was not going to be able to. Gisela had to wait almost 12 hours in line to refill her car’s tank.

“This is the third time this month that I have had to stand in line for so many hours to get gas. This is unbelievable… An oil country like this and you have to wait in line for gas,” Gisela tells El American.

Due to the ruinous state of the oil industry — once one of the largest and most modern in the world — Venezuela, the country with the largest oil reserves, has been suffering from a severe gasoline shortage for months. Corruption, combined with disinvestment, has had a lethal impact on the industry. But it is not felt the same in the rest of the country.

“Here in Caracas there were some hard days, but otherwise we haven’t had the shortages that there are in other states,” Pedro, a 58-year-old family father and engineer, tells El American. “You pay at international or subsidized prices, and you can get it very easily.”

In general, this contrast is found in all sectors, not only in terms of gasoline. Due to different factors, a dystopian and completely absurd bubble has been created in Caracas, which sells the sensation that Venezuela is a buoyant country.

“But far from reality,” says Gisela. “Here in Merida, we are worse off than six years ago, when Caracas was experiencing the worst years of the crisis. Here the crisis continues and has worsened.”

While in Caracas casinos or restaurants are opening, in Mérida businesses are closing due to the deterioration of public services. “Unfortunately, we had to say goodbye to our dream of having a restaurant,” María Helena, 38, told El American. “We never had electricity. On one occasion we went 3 days without light and everything got damaged. Customers were not coming, because here people are not going out to eat like in Caracas or Valencia. Here people don’t have money to go out to eat. Our restaurant lasted two years, but we couldn’t continue anymore.”

And Mérida is a big city. In smaller towns like Calabozo, in the state of Guárico, 280 kilometers south of Caracas, the reality is much more dramatic. Juan, a 23-year-old student, says that the city “looks like a ghost town.”

“When there is no water, there is no light; when there is light, there is no water. Everything is closed and everything is very expensive. You have to stand in line all the time to get gasoline; and you can feel the corruption. Here the owners are the military, who do whatever they want,” says Juan.

AME2728. PUERTO ORDAZ (VENEZUELA), 04/21/2022.- People line up inside their vehicles while waiting for their turn to fill up at a gas station, on March 31, in Puerto Ordaz, Bolivar state, Venezuela. EFE/ Rayner Peña R.

Caracas’ fiction, a product of crime

Walking today through Las Mercedes (the Caracas neighborhood where nightlife is mostly concentrated) is very different from what it was four years ago. Then, everything seemed in ruins. Nightclubs were closed and restaurants were empty. Nobody walked the streets after 8:00 p.m. Everything closed early. Today it is very different. Illuminated canopies reflect on luxury cars parked outside newly opened restaurants that are bursting at the seams. Porsche’s, Audi’s, or Maserati’s line the sidewalks every weekend. This little postcard contrasts with the idea that still exists of Venezuela; however, everything is fantasy.

“There has been some improvement,” Óscar Meza, director of the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers (CENDAS), tells El American. “Dollarization and the easing of price controls meant no more shortages. The government had to let things go. But this is normal. In the face of the dramatic crisis we had, there has been a rebound.”

This is a de facto dollarization, which has been imposed gradually and is subtly endorsed by the regime of Nicolás Maduro. Currently, in Venezuela’s main cities, most transactions are made in dollars. Mechanisms such as the money remittance options of American banks, Zelle, have become the main tool for current payments.

However, university professor and consultant María Verónica Torres clarifies: “The only favored have been the upper class, irregular groups and some middle-class entrepreneurs.”

In the end, certain privileged economic zones have been created. Reverse ghettos of people who managed to dollarize their trade and have managed with the inertia of a kind of economic anomia. But it is a precise and very limited phenomenon. “Caracas has become a display case,” says Oscar Meza.

AME9794. CARACAS (VENEZUELA), 05/16/2022.- A barber attends to a customer in a street barbershop on May 12, 2022, in Caracas (Venezuela). EFE/ Ronald Peña

The luxury cars serve as props in a set that a criminal economy has prepared appropriately for the privileged few. Most of those consulted by El American agree: it is the money from organized crime and corruption, basically, that has built that fiction of prosperity.

“The criminal element plays a very important role, but it is very difficult to know the extent of it. Probably, many of the corruption funds are invested in Venezuela, given the impossibility for these people to invest in other countries. Most of them have legal proceedings in countries such as Spain or the United States,” says the director of CENDAS.

The European Union or countries like the United States have sanctioned dozens of individuals linked to the regime of Nicolás Maduro and corruption in Venezuela. These are people with billions of dollars that they cannot spend outside the borders of Venezuela and countries friends of the Chavista regime. Money that today could be flowing in Caracas or other Venezuelan cities.

“It’s hard to pinpoint, but Caracas is today a giant money-laundering machine. Every day one sees a new restaurant, luxurious cars on the streets. Fancy offices and buildings under construction,” university professor and economist Alberto Gómez tells El American.

“Nicolás Maduro’s regime has been accused of putting together one of the largest drug trafficking structures in the region. Many of the regime’s officials have been sanctioned and accused of drug trafficking. There is no industry that produces more money than the drug trafficking one. Where do you think that money is going?” adds Gómez.

For Oscar Meza, “as long as we have this regime, it is very difficult to know precisely how much money of uncertain origin is being invested.”

José, a 27-year-old medical student living in Mérida, believes the same: “The crisis has evolved. The sanctions on Maduro’s regime, on his thugs, have made them have to invest in Venezuela. And they have gone from being in the role of thieves to having an active role in the Venezuelan economy. They have set up their businesses and neither the price control nor the exchange control is convenient for them. That is why the crisis evolved.”

According to Transparency International’s Corruption Perception Index, Venezuela is one of the most corrupt countries in the world. For the year 2021, Venezuela ranks 177 out of 180 countries on the list. Paradoxically, today these levels of corruption could have an impact on the fiction of improvement that has risen in Caracas and other major cities. But the humanitarian crisis remains intact, as consultant María Verónica Torres tells El American. The drama afflicts millions of families, who could not sneak into the bubble of privilege of some neighborhoods in Caracas or Valencia.

The reality outside Caracas

In the hospital of San Juan de los Morros, Guárico state, two hours from Caracas, Gabriel, in his seventies, spends his days. He was abandoned and lives on the support of a couple of local residents. For a week, those who went to visit Gabriel stopped going. When they returned, they found a dramatic image: the old man, skin and bones, completely malnourished and dehydrated. He did not eat anything during the time he was not visited, “because there is no food in the hospital,” one of the two neighbors helping Gabriel told El American.

Because he was lying in bed, not moving, Gabriel is now full of wounds and scars. The hospital completely neglects its patients and the old man is about to starve to death. “Nobody took care of that man. Today we went to see him and he had worms in his back wounds. We are asking for help to cure him, but they are waiting for him to die.”

Gabriel does not eat. Only misery surrounds him. Poverty. No one cares. There are no authorities. Like Gabriel, there are hundreds. It is not only the hospital of San Juan de los Morros. It is almost all the hospitals in Venezuela’s interior.

“There is no water in any hospital in the state of Guárico,” says Carmen Gómez, a pediatrician in San Juan de los Morros. “There is never light. There are no supplies. There is almost no medication. Protective equipment for us is scarce. If we have it, it is because different organizations have donated it to us.”

Gómez says that a couple of years ago the roof of a hospital in the state of Guárico fell on a patient. At another time, while a patient was entering the hospital elevator, it came off. “The elevator didn’t fall completely because it got stuck with the patient’s stretcher.”

If doctors are going to operate on a patient they must bring all the supplies. There are none in the hospital. Each doctor must carry the necessary tools for any operation. And, for all this, a doctor is paid less than $100 a month. Wages, in general, are miserable.

According to a Living Conditions Survey, in a study published at the end of 2021 by the Andrés Bello Catholic University of Caracas, 94.5% of the population is below the poverty line. And, as for extreme poverty (i.e., people who have incomes below 1.2 dollars a day), it is 76.6 % of those living in Venezuela.

In other words, 3 out of every 4 Venezuelans live in poverty. That is the reality portrayed by stories like Gabriel, Gisela and María Helena. That is what Carmen Gómez tells. And it is not a situation that is reversing. In fact, according to the work of the Catholic University, extreme poverty increased almost ten points in one year.

Regardless of the phenomenon experienced in Caracas, Óscar Meza of CENDAS says that “the real problem, which cannot be easily solved, is the deterioration of purchasing power.”

“At the end of the day, the main result of a hyperinflation, such as the one Venezuela is experiencing, is the destruction of the currency and purchasing power. In February we still had a salary that was equivalent to one dollar and fifty cents. This barely amounts to about 28 dollars the minimum wage, as we currently are. That is insufficient for a market basket that is around 500 dollars,” says Meza.

CARACAS (VENEZUELA), 05/01/2022.- Demonstrators participate in a protest march to demand better wages and benefits during International Labor Day today, in Caracas (Venezuela). EFE/ Ronald Peña

“I just want to practice my profession”

“I can tell you so many things…,” Lisbeth Padilla, 53, a professor graduated from Rómulo Gallegos University, tells me. “For example, I could tell you about how students started to stop attending classes, but not because of early pregnancy, as it used to be, but because of hunger.”

Lisbeth lives in the state of Guárico, and, from being a teacher for more than fifteen years in schools and universities, today she is a service employee in family homes and, sometimes, does delivery service.

“I work in homes cleaning or doing garden maintenance. I also do home deliveries. Or I do any other kind of work that comes my way, but I am no longer a teacher, which is what I have always done.”

Dollarization has also encouraged Venezuelans who are still in the country to leave their jobs and work in other trades. It was normal to hear these testimonies from Venezuelans who emigrated. Engineers, doctors or architects who in Ecuador, Panama or Ireland did home services, washed dishes in a restaurant or cleaned in family homes. But now it is happening in Venezuela, especially in the interior of the country. Their trades are not as well paid, in dollars, as other jobs.

“And I don’t earn much either,” Lisbeth says. “Currently, I earn about $100 a month. I can’t cover my basic needs with that. Even today I don’t eat well. I mainly eat carbohydrates, because everything is so expensive.”

Lisbeth laughs at those who say that “Venezuela is getting comfortable.” Her testimony coincides with what Oscar Meza points out: the main problem is the purchasing power. Dollarization has also caused all prices to increase and correspond to a market dissociated from the reality of the majority of Venezuelans.

I ask Lisbeth what affects her the most and, without hesitation, she says: “The psychological.” She pauses, sighs, and her voice breaks.

“Around where I live the houses are getting lonely. The elderly are left alone. Children left in the company of other family members. Dogs are abandoned or left to starve. It is sad. It is very sad for me. Sometimes I get depressed. I feel very affected psychologically. Especially because one studies a profession, with love and effort, and now I’m like thi at this point in my life.”

“It is very sad,” Lisbeth insists. “One studied to practice one’s profession, not for other tasks. It’s not that I’m ashamed of what I do, but I am a teacher. I want to work in a school that is properly endowed, with good salaries.”

She emphasizes: “I would like to practice my profession from a classroom and not from a family home, cleaning it.”

AME374. CARACAS (VENEZUELA), 05/18/2022.- A woman today holds a banner with the faces of political prisoners during a demonstration to demand their release, in front of the headquarters of the United Nations Development Program (UNDP) in Caracas (Venezuela). EFE/ Ronald Peña

It is 5:5 in the evening. It is May 15th. Gisela is at a wake. Her nephew, Miguel, 23, was murdered the day before. He had gone out fill it up his car with gasoline in the early morning, to avoid running into a line that was too long.

“Until when?” asks Gisela. “We can’t live like this, this is unbearable.” And she knows that nothing will change soon. That everything stays the same and that everything, if anything, is going to get worse. That even if they inaugurate a restaurant here or there, nothing hides what millions of Venezuelans are going through.

“The regime continues, it is true. The legal framework is still in force. There is no rule of law,” says Meza. There is, therefore, uncertainty. There is still no freedom of expression and hundreds are still in the dungeons of the dictatorship. There is less and less political freedom; persecution remains unabated and organized crime operates without consequences. In Venezuela, more than 90% of crimes go unpunished, according to the Observatorio Venezolano de Violencia (Venezuelan Violence Observatory.)

“Because of the lack of certainty, I have not started, I have not done anything. Today there may be some opportunities; but for how much longer? We do not know what is going to happen tomorrow. The reality is that today the same people who destroyed this country are in power,” says Juan, 23 years old. Every day he thinks about crossing the border and living in another country.

Orlando Avendaño is the co-editor-in-chief of El American. He is a Venezuelan journalist and has studies in the History of Venezuela. He is the author of the book Days of submission // Orlando Avendaño es el co-editor en Jefe de El American. Es periodista venezolano y cuenta con estudios en Historia de Venezuela. Es autor del libro Días de sumisión.

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