It’s September 27, and banks in Mérida are limiting people to Bs.10,000 in withdrawals at the window. ATMs are even more restricted – just a week ago, you had a Bs.20,000 withdrawal limit. At the time of this writing, a dollar buys you Bs.27,051. That means Bs.10,000 is worth about 35 US cents: that’s all you’re allowed to take from your bank account on any given day.
While the story has been explained elsewhere by many economists (including the very entertaining Daniel Urdaneta), it’s worth recalling that last December, President Maduro scared everyone into depositing the highest denomination bill at the time (the 100 bolívares note) into their bank accounts, saying he was going to pull it out of circulation. This was supposed to stop “speculation” (spoiler: it didn’t), with Maduro claiming that shadowy elements were “trying to sabotage Venezuela’s economy at the behest of the U.S. Treasury,” by siphoning out bolivars to warehouses abroad. How this would damage the economy, and why would anyone want to stockpile worthless currency, remains unexplained to this day.
Now, a year later, the 100 bolívares note is still in circulation, but Venezuelans no longer have cash stacked up around the house – of course, it’s all in the banks. Their money has been kidnapped by the dictator, and they can only get it out thirty-five cents at a time.
“I need money to go home,” a man in an ATM line tells us. “The jeep to my house charges Bs.1,000 at daytime, Bs.3,000 at night. I have two kids and they already started school. They need money for the bus, for breakfast and maybe they have an emergency. How can I let them outside without money? And this machine will only give me Bs.10,000.”
In Caracas, you have to go out and hit up ATMs one after another, with some of them dry for weeks. Lines at cash machines are sometimes longer than those for bread, and people wait in them so they can stand in other long lines, to get increasingly scarce food. The scarcity rate is somewhere around 80%, which means that eight out of ten items on your shopping list will be missing from the shelves. And so when people stand for hours to get those two items, they only have $.35 to pay with.
The government doesn’t have the money to print money. That’s right, the Bolivarian government is so broke, it can’t pay to have its money printed.
But most Venezuelans might not have more than a few thousand bolívares in the bank, anyway. The man described in this article works as a motorcycle messenger, making the equivalent of $9 a month – and that was back when that story came out (August 23, 2017). Today, his monthly Bs.150,000 is worth about $5.55, depreciating by the minute. Cut nearly in half in a month of Venezuelan inflation.
“I live in Valles del Tuy (suburbs at the west of Caracas), I need money for my ride, and I have to wait in line for two hours here,” a woman tells us inside a bank office. “I went to three banks yesterday. They don’t have enough cash and what they have is in smaller bills. You have to wait for someone to make a deposit.”
Why would a government limit the amount of money you can withdraw daily from the bank? Simple: the government doesn’t have the money to print money. That’s right, the Bolivarian government is so broke, it can’t pay to have its money printed and shipped in as it did last year. Of course, this comes after the mismanagement of a historic oil boom (2004-2014), corruption, graft, embezzlement, and all the other crimes the little Bolivarian mafia engaged in to bleed the country dry.
And that takes us to the only option for cash if you’re desperate: the black market.
There comes the “avance de efectivo” (literal translation: cash advance), which consists in someone giving you money and charging you a percentage after you pay with your debit card. Yes: you pay to get money.
Think it couldn’t get any worse? Think twice.
Certain stores and street kiosks used to have that option, but it has turned shady after the government admitted that it ni lava ni presta la batea. The process today for an avance feels like you’re trying to score crack: after a row of rejections, you will eventually reach someone willing to help, “but not right now”. You wait twenty, thirty minutes, and return when the kiosk is empty. Then you barter with the clerk; say you need Bs.30,000 and he will only give you half, charging you almost as much. The process might be interrupted at any time by other customers who may, or may not, be there to remind you that Big Brother is watching. When you finally get the money, it’s on a corner nearby and passed with a handshake. We’ll phrase this differently: you may be arrested for needing Bs.15,000 right now, and the government will present you like you’re a spoil of war.
Who’d ever have thought that 21st-century socialism would make “savage capitalism” look good?