Photo: Correo del Orinoco
In the list of economic measures needed to fix Venezuela, slashing zeros off the currency ranks pretty low. It’s a cosmetic fix, and yet it’s the only measure the Maduro administration is set on applying.
This lame strategy comes right from Chávez’s playbook. Back in 2008, they eliminated three zeros off the currency so it seemed stronger. To drive the rebranding home, they even changed the official name of our currency from “bolivar” to “strong bolivar.”
It’s a cosmetic fix, and yet it’s the only measure the Maduro administration is set on applying.
It was a costly and confusing publicity stunt, but they pulled it off. I was in school back then, and I remember getting a class about it from the BCV promoters. Of course, they had to replace all of the banknotes with new ones, a transition that made us Venezuelans develop the annoying reflex of dividing everything by 1,000. Outsiders are always weirded out by that.
If something costs, say, 32,000 strong bolivars, I convert it to the format I’m used to (32,000,000) to get an idea of how much this really is. Sometimes I do it by accident with things that aren’t even bolivars. Thanks, Chávez.
Ten years later, we have Maduro provoking the highest inflation in our history, trying the same stunt, but in pretty different circumstances. This is like a “reconversión” with the rayo madurizador.
The thing that makes this reconversion the lamest play in the history of everything is that they chose to eliminate five zeros.
Back in March, they announced the elimination of three zeros, and stores were preparing for that. The government made them show the two prices simultaneously. If changing prices every single day is a hassle, just imagine having two prices on every item.
They even showed the new bills, and we made fun of those.
And then, out of nowhere, Maduro comes on TV to make economic announcements.
“You know what? Three zeros is too little,” he says, and I paraphrase, “let’s make it five, let’s eliminate five zeros now.”
Dude, we already made the mental work for you because with three, we knew what we were dealing with. Eliminating five throws us into a confusing bat-country where nobody knows what’s the price of anything.
You know what? Three zeros is too little… let’s make it five, let’s eliminate five zeros now.
People have already assimilated that changing the value of our currency doesn’t do jackshit to fix the economy. At this point, there’s nothing Maduro could say or do to convince the majority that eliminating zeros off the currency will help. We’ve been down that road before.
That alone makes this conversion pointless. The thing about illusions it that they’re either completely convincing, or they’re not.
Then we have the fact that they don’t have enough money to print the new banknotes. Did you know that, right now, cash represents only 1.5% of all the money in circulation?
I guess you could argue that using smaller numbers to pay would make our lives easier, but that’s just temporary. It’s been ten years since the last reconversion, but it won’t take ten more to bring those zeros back. We are in hyperinflation, we’ll be talking about trillion-bolivar empanadas in no time.Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.