Over the past two weeks, Venezuelans have poured into the streets, but not simply to protest. Throngs are desperately trying to get the officially licensed sticker albums of this year’s FIFA World Cup from Panini.
Every four years, soccer fans the world over buy the officially licensed Panini sticker album in order to get a glimpse of which of their favorite football players will be summoned by each of the 32 national squads, and to find out which stickers are harder to get. But to us economists, Panini also sheds some relevant features about the state of the economy, as our own Gustavo Hernandez has recently written about.
As Gustavo explained, for this year’s Panini World Cup album, an five-sticker envelope costs 50BsFs, roughly 7.93$ if we apply the official (but increasingly rare) exchange rate. Back in 2010, for the Panini album of the tournament that was hosted in South Africa, the same five-sticker envelope had a price of 4.5 BsFs, or almost 1.05$ at the official exchange rate back – a price increase of 1011.1% in BsFs over the past four years, or a staggering 252,78% annual increase in the price (we ain’t Zimbabwe…yet).
Yes, stickers are not included in a fixed and representative basket of goods and services of the household’s consumption bundle, so it’s not a proxy for determining the inflation rate. Still, it’s a simple way of explaining how our purchasing power has been made more feeble after every FIFA World Cup.
Another interesting comparison can be drawn from assessing how much those same stickers cost in other countries, vis-a-vis their price in Venezuela. For instance, in neighbouring Colombia, an envelope of 5 stickers is costing 1,200 Colombian Pesos, or 0.63$. If we embrace the “Law of one Price“, putting aside trade barriers and the cost of transportation, not only are Colombians better off than we are (since they’re buying the same stickers more cheaply in dollar terms), but also our Panini-sticker-equivalent exchange rate would be around 79.37BsF for each greenback (almost the same rate at the black market prior to SICAD II). Will smugglers begin taking advantage of the difference in price between the two countries?
As we anxiously await for the tournament to kick-off on June 12th, let’s hope that by the time Russia 2018 rolls in, the Panini albums confirm that our economic travails are behind us.Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.