The economic chaos and hyperinflation are producing the abrupt acceleration of dollarization in Venezuela. The circumstance since it is not circumstantial and has penetrated the filaments of the economy. In the south american country already charged regularly in u.s. currency queries medical and dental private, insurance, tourism services, appliances and kitchens, the real estate, the accounts of the restaurant, private education. Even the commercial activities of children, such as visits to the barber, shopping at the market and shipments in transport. In many cases, the sales are offered in dollars “or in bolivars, according to the official rate of the day”.
the dollarization of The venezuelan economy divides the country into two types of citizens: those who have dollars and those that do not. The first survives, the second badly. The minimum wage in the Venezuela of Nicolás Maduro is one of the lowest in America: 7,5 dollars a month. The annual rate of inflation to what is going of 2019, is, according to conservative estimates, 1,500%. The people that charge compensation only in bolivars and have to rely on government subsidies.
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The expansion of the dollar as the second currency is tolerated by the Government of Nicolas Maduro, but is in a state of limbo. The administration, broken, and sanctioned internationally, to be thirsty of money and resources, and without political antinflacionaria, has deregulated the most of the exchange transactions and reduced tariffs in order to breathe. Many large and medium sized enterprises already offer total compensation, or matching bonuses, in dollars, and employers can now import products subject to dollars.
This situation has eased in much of the shortage of goods in the country and has made emerge the so-called “still-lifes”, which in Cuba is called diplotiendas, stores of imported products sold at a high value in american currency, that are used by the sectors well-off population. Recently, the Supreme Court of Justice issued a resolution which authorizes the payment of rental in dollars for residences and commercial spaces, a practice that was already widespread. Almost immediately, the Central Bank of Venezuela official dollarization of the credit portfolio of the commercial banks.
“On average, according to the study, the families in venezuela perceive, for remittances or payments, about $ 90 per month,” says Leonardo Vera, an economist and professor at the Central University of Venezuela. “Are 3.4 million families, a total of more than 13 million people.” According to studies by the firm Consultores 21, the 40% of the population has been stated to have an income in dollars. The firm Ecoanalítica has a study with very similar data. In the western zone of the country, the more battered by the collapse of chavez, or in tourist cities like Puerto la Cruz and the islands of Los Roques and Margarita, the average of the dollar goes to 50%.
Asdrubal Oliveros, director of Ecoanalítica, says that the transit to the use of the dollar is a natural resource for the population to defend themselves against hyperinflation, protect heritage, and to simplify the economic transactions, in a context in which “by default”, the Government of Maduro stimulates their presence in order to achieve some stability. “The bolivar loses value every day and as a unit of account is of no use. The dollar has many years working as a reference of protection of cultural heritage in Venezuela”.
The income in dollars do not save anyone from the ravages of hyperinflation, which devour the revenues of the venezuelan, even if they earn in dollars. José Manuel Puente, a professor of the University of Oxford, explains that the dollar “appreciates” all the days, since “the point of real balance” is 35,000 bolivars per unit and in the markets it is located in 20,000. “What has happened is that Maduro resigned to having monetary sovereignty and delegate to the united States,” he says. In January 2019, the $ 100 was an amount of money sufficient to Venezuela for the expenses of a month. Today, $ 100 will barely last for five or six days
“In Venezuela there is a lag exchange rate notorious, a gap between the speed with which prices rise in the domestic market with respect to the speed with which depreciates the dollar,” says Oliveros. “That happens in a dual economy like this, with the productive apparatus destroyed, serious problems of corruption and collapse of services. Is what colloquially people are calling “inflation dollar” ”.
“The Government of Maduro is not as to stop this migration to the dollar to protect themselves,” says the economist Leonardo Vera. “In fact, it’s going to cost you a lot that the country can return to normal monetary and get rid of the influence of the dollar, after completion of the transition to democracy”.