The Ripping-The-BandAid-Off-Sloooooowly School of Devaluation

pulling-bandaidsToday, International Air Travel was “switched to the SICAD II rate” – a wonderfully euphemistic way of saying the bolivar was aggressively devalued in the international air travel sector. In for-dummies terms, the cost of airline tickets for bolivar holders just went up about five-fold. And, just like that, one of the most cherished chavista era giveaways to the middle class went up in a puff of smoke.

It. Stings.

This, in case you were wondering, was the whole point of SICAD II all along: it’s a clever institutional mechanism to allow for devaluation to happen in a stepwise, sector-by-sector fashion. It makes sense, coming from people who made careers, a generation ago, our of attacking Carlos Andrés Pérez for eschewing “gradualism” in economic adjustment.

Time to get used to the alternative. It’s not actually any less painful. It just stretches the pain out over time. Like ripping a BandAid off sloooooowly instead of doing it all at once. Which, everyone realizes, is the best way to rip off a BandAid.

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