A Tale of Two Cadivis

I used to love Cadivi, but now I despise it. It is the lynchpin of a failed government: opaque, corrupt and unspeakably negligent.

Back when subsidized dollars allowed many Venezuelans to travel abroad at bargain-basement prices, I was one of the lucky many: I travelled abroad more than a few times. I went to grad school in Bogotá. I wasn’t complaining… much.

When I travelled abroad, making Cadivi folders was a pesky task… but totally worth it: they were pretty cheap dollars. Granted, the whole thing with holding your breath till the credit card passed for the first time and making notes on every penny I spent so I wouldn’t go over my cupo added a couple of mental dollars to the artificially low exchange rate.

My sister and I both went to grad school in Bogotá. While she stayed for the whole year, I traveled back and forth every month so I could keep on working. I could do this because plane tickets were also relatively cheap and payable in bolívares -a close to impossible scenario nowadays.

Of course, the pesky fulanas carpetas were a must: the initial count was 8 folders for my sister (two every trimester) and 4 folders for me (two every semester), but in fact it was way more than that, because we had to redo some of them. They’d famously be rejected even for the most trivial reason, as though Foreign exchange was reserved for OCD sufferers.

We even went through the whole “Cadivi suspends Italcambio (our operador cambiario) soap opera and had to jump through a whole new set of hoops to reapply with a new one. However, all of our folders got eventually approved and we were able to pay for tuition and housing in a close to a timely fashion. It must be said, this was way back in 2011.

This is why I wasn’t complaining… much.

But it was just an illusion. Cadivi was and is now more than ever, a bureaucratic cesspool of corruption. Also, the exchange control didn’t put a stop on capital flight, it actually provided its own runway. According to former minister for planning, Jorge Giordani, between 2004 and 2012  approximately 250 Billion Dollars “left” the country.

Petrodollars allowed for such a scheme for quite a while. But even when we were receiving between US$ 90 and US$ 100 per barrel, in the words of Maduro, “the real truth is that we were spending 120, 130.” Obviously, things turned for the worst when after two consecutive quarters in recession oil prices started to fall and the rest is (very ugly) history.

Cadivi is a love-hate story. The whole process (before and after using of the dollars) was mighty annoying. But in the midst of a more than a decade long exchange control, Cadivi was and still is the main system for assigninf official rate dollars. Even now, CENCOEX – the new, rarely used name for Cadivi – assigns over 90% of the dollars the state has to sell!

Venezuelans have been willing to jump through hoops to get cheap dollars for a long time. I’m not judging anyone… I’ve also jumped through some of those hoops myself.

The thing is, Cadivi is the backbone of our rentier state. When you’re on the receiving end, it feels like a blessing, but it’s really a curse.

Cadivi is Dorian Grey: it shows creates a fake area of well-being around itself, while that Miami-based website shows the real deterioration in a firewalled closet. But low oil prices will push the  Government into accepting that Venezuela can no longer provide such cheaps dollars. The crisis will force Cadivi to take a look at its real self and then… well, who knows.

Cadivi is Dr. Jekyll and Mr. Hyde: we have been rationalizing its existence because we want cheap dollars. Even worse, we really believe we are entitled to them! Both the lover and the hater of Cadivi lives within, but the lover defeated the hater with little to no struggle.

Cadivi is… The Nutty Professor: the Central Government uses a special serum known as black gold to make the exchange rate seem thinner and handsome, but as we run out of juice, it seems like an impossible task to keep such a low and appealing exchange rate.

I used to love Cadivi, but now I despise it. It is the lynchpin of a failed government: opaque, corrupt and unspeakably negligent.

The best of times seem to be a thing of the past and it’s been only the worst of times for a while. Since nothing leads us to believe that the current Government will lift the enormously destructive economic control policies in the short or medium run, it will still probably be the worst of times for at least a while longer.