Cadivi as Chains

CADIVI wasn't mostly, really, an economic policy. It was really about chaining Venezuela's middle class to the rentier state.

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A vintage ball and chain with an open shackle on an isolated white studio background

About ten years ago, some relatives came to visit. The patriarch of this family was a highly-regarded, well-respected member of the old elite. He was one of the founding fathers of Venezuelan democracy, an eminence grise. Pure IVth Republic royalty.

He was also a kind, decent, and smart man. When they came to Chile to visit, I looked forward to high-minded conversations on politics, history and the like.

It didn’t go quite like that. The first two days were consumed by a never-ending quest to raspar el cupo – extracting every last little drop of petrostate largesse from their Cadivi-enabled credit card. An ATM! Let’s go grocery shopping so we can use our Cadivi card! Do you have anything expensive to buy? Do you know where we can get cash for our cupo?

It was depressing.

Time and again, the story repeated itself. People would show up at my doorstep, and instead of enjoying their trips, they’d be consumed by the quest to find one more way to take advantage of this gimme.

And who can blame them?

Cadivi became the emblem of the slavery of the Venezuelan mind. Once Cadivi was put in place, there was no escaping the Revolution. You could go to Timbuktu, but as long as you had Cadivi, you would always have the Revolution within your sight. Cadivi was the cord that made you Chávez’s puppet.

It was hard to convince my guests how unacceptable this was. It was hard to even open that debate. Everyone who came to my doorstep loved Cadivi – money for nothing and your trips for free! In fact, one of my sisters became so adept at working the ins and outs of the system, we nicknamed her “Cadiva.”

Alas, Cadivi is gone. Its replacement, Cencoex, is only really available to the supremely regime-connected. Yet the damage remains. To this day, Venezuelans find it hard to fathom that, no, not everybody in the world understands what “el cupo” means. And no, when you live in a normal country and you travel, you buy the dollars you need and that’s it. Traveling is not something you make income from, but rather, an expense. Travel leaves you poorer, not richer.

I wonder how long it will take for these lessons to be unlearnt.

 

14 COMMENTS

  1. Juan, what a great post. Some in my family still have this attitude towards CADIVI, and I think I probably would too, had I not started reading CaracasChron like a maniac. I’ll share the bejeesus out of this post for the people that still need it spelled out.

  2. Juan,

    Great post. When I first came to Venezuela, I didn’t really get it for awhile… this obsession with traveling and shopping abroad. As the true insanity of the system became clear, and the opportunities it created for arbitrage understood, I was appalled. When I became a resident, everyone told me I could get CADIVI dollars. I never did. Not once. While I was perfectly willing to exchange in the parallel market and buy things (including plane tickets) cheaply in Venezuela, using those Bolivars to turn around and buy back dollars at discounted prices seemed like it was just wrong. For me, that was a line I would not cross. A lot of Venezuelans told me I was crazy to not take advantage of it, and that as a resident it was my “right”.

    At the time, I was never quite able to explain or put my finger on why I didn’t want to do it. You just explained to me why the concept made me feel so queasy. Accepting “free money” ultimately makes one a slave.

  3. Thanks guys. I think it’s easy to judge people on Cadivi, but I don’t think it’s right. I understand why people got caught up in it – free money, after all. But free money tarnishes the soul, and that is sad.

    Ultimately, the only thing I blame people for is not seeing this disaster looming. If we haven’t learned that exchange controls are a nightmare, then all this suffering has been for nothing.

  4. Recently in Costa Rica a shopkeeper told me how a Venezuelan girl was at his shop, with no money, nowhere to go, begging him to give her US$ for swiping her credit card. “It was very sad” he said.

  5. Before leaving Venezuela in 2009 I worked with expats and I was incredibly angry when I found out that my boss at the time, an American, got a Venezuelan credit card so he could get CADIVI. He felt that it was stupid not to profit from this obviously flawed system. I mean it was bad enough to have Venezuelans indiscriminately using the system for profit but to have this gringo doing it too? It galled me. De paso, like all other expats, he and his family were already living large in Venezuela because they could sell their USDs at the black market rate to pay for a quality of life far above that of regular middle class Venezuelans (or Americans for that matter).

    Later, as my family visited me in Canada I shared their anxiety of whether their Cadivi credit card would work or not. It wasn’t a matter of “raspar el cupo”. Most of the time it was “coño de la madre no se si esta tarjeta de mierda va a pasar o no”. The system seemed arbitrary. It would work for a $300-bill at Wal-mart and then it wouldn’t work for a $50-bill at a restaurant. And of course, my family also had to deal with the trips that didn’t happen because the Venezuelan government would not allow its citizens to do what they wanted or needed with their own money.

  6. I only disagree with you on one thing: Travel, if done for the right reasons, actually makes you richer… wealth is not just about money

  7. M’s story reminds me of what foreing diplomats and officials in Venezuela did (some still do) until not long ago. They used to bring their cars from their country or buy an apartment here, and when their tour was over, they sold those assets in bolivars at market prices. The Venezuelan government would then exchange those bolivars at the official rate. A perfect money machine.

    • Hola Carlos,

      This guy would use his Venezuelan credit card and then pay it off with Bs he got by selling his USDs at the black market rate. This was when the official rate was 2.15 and the black market rate was around 4.

  8. “Travel leaves you poorer, not richer”……depends on the context, but not to quibble, my expectation is that when travelling I should be left “richer” not “poorer” in the spiritual sense, if you get my drift. Otherwise, thanks for sharing. My relatives when visiting managed to balance “raspando el cupo” with enjoying their visit seeing relatives and sights, etc.

  9. Now there’s a new mission while traveling – shopping for hard to find goods to ship and carry back to Venezuela in your two 50 pound luggage each. I barely see my family for the shopping frenzy.

  10. Although I must admit I’ve used Cadivi/Cencoex to travel (and really travel, as in sightseeing, eating local food, visiting landmarks…. literally, the works) – I’ve witnessed the “raspacupo” scene more often than I would’ve wished. Take 2014, for example. I went to Madrid and Amsterdam. I could spot them right away- their Venezuelan flag caps, and harassing people to let them pay for things with their cards to get cash (this happened to a client of mine in Aruba)! Thank God I have double nationality – I was so embarrassed to show my Venezuelan ID/passport when I paid for things because EVEN THE LOCALS in Madrid were hunting for these “cadiveros” to get a commision (sp?). Back when Cadivi applied for private banks, I could show my other nationality ID with said card, and no big deal. Last year I went to Buenos Aires and Santiago – and that Bank of Venezuela card was like a big red scarlet letter for me. I preferred to not even mention where I was from. Or use my other citizenship. These “cadiveros” give real travelers a bad rep.

  11. Totally agree. I experienced same feelings of thinking how effective had the “revolution” been in penetrating people’s minds even when they were away travelling ans spending their “own” money.

    excellent insight Juan.

  12. Dear Juan,

    Thanks for writing a piece that spoke to my moral side. As I left Venezuela in 2009 with a full scholarship, I never requested CADIVI dollars to study, I didn’t need them and it was illegal! I would have had to lie as you weren’t allowed to get preferential student dollars if you were receiving any income. Pretty much anyone that knew I wasn’t cashing in the free money was always making fun of me, telling me what an idiot I was and how “it was right to get cheap dollars”. My argument was always the same: I lived my whole life hating corruption and I wasn’t going to get my hands dirty (even though you can always use free money) because I believe there is more to life than “viveza criolla”, and that hard work and following the rules has to pay off in the long run.

    I am deeply saddened by some of the other post that make it OK to lie, bend rules and use CADIVI for personal profit. It’s part of our culture, “if you don’t do it someone else will” and as proven by the CADIVI diaries someone, in fact a lot of people, did.

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