Image: Sofía Jaimes Barreto
A Spanish version of this piece was originally published in Cinco8.
Black Friday in Cucuta, Colombia. Thousands of Venezuelans cross the border from Táchira to exchange their savings into Colombian pesos, buy goods and go back to Venezuela at night. The streets of this border town, normally crowded from Monday to Monday, are now in a frenzy for the sales in Colombia’s cheapest city. The police block cars on the main commercial avenues, happy pickpockets do their worst on the unaware, and aggressive store promoters look like octopi short on arms to attract clients. Around me, a melting pot of dealers, gamblers, prostitutes and more kiosks selling stuffed potatoes than I’d ever seen before.
At the same time, in Caracas, an unforeseen, similar phenomenon: long lines in front of a few stores that dollarized almost their entire stock. It’s a minimalist, endógeno Black Friday, while the FAES set up their checkpoints in the capital.
“Everything that’s happening, apparently, is a consequence of three years of remittance-based commerce,” explains Giorgio Rodríguez, the owner of a currency exchange north of Santander. “This business made so much money that it modified the economy in the region.”
We met at Ventura Plaza, a mall in Cucuta as iconic as Sambil for many Venezuelans. He speaks in a rush, with a tinge of a fake witness on a TV show. Guayabera and khaki pants, rehearsed movements matching his words, and mischief. He explains, calmly, how commercial empires were built over money from abroad.
What’s the Rate?
The bolivar-dollar exchange rate is determined by the black market on the border in the morning, according to the dollar fluctuation in the black market. A small cambista —someone who exchanges daily— can make up to 40 transfers a day, while an established currency exchange needs over 300 clients a month to make a profit. Migrants who want to send money to Venezuela, send foreign currency to the cambista, at an agreed rate; and then the money changer makes a deposit to the recipient’s bank account (in bolivars) as fast as he can, to beat hyperinflation. In the way, the cambista keeps a cut: the difference between the rate at which he bought the dollars from the migrant and the rate he calculated for the recipient’s bolivars.
“The exchange agent keeps the remainder from that transaction and the client doesn’t even find out, because many people don’t understand how it works. It’s more complicated than what it looks like,” says Rodríguez, sipping coffee. “The first important thing here is the rate, which you negotiate throughout the day. Depending on the amount the client wants to transfer, I can offer a different price. We always want to get a point or point and a half in revenue, even two per transfer.” What makes a cambista successful is the trust he can establish with his clients, in a context where fake exchange agents offering the best price abound, and “in the end, they only rob the gullible people who opened their hearts and made it easy for predators.”
The Phantom Business
In this remittance and currency exchange system, every Venezuelan bank account used by a currency exchange on the border must be commercial. Nobody uses personal accounts anymore, because they’re monitored by Venezuelan banks, as ordered by Sudeban, the banking overseer. In the beginning, they used accounts that belonged to existing businesses but time gave way for shell corporations with stores that didn’t sell anything—but still made millions a month and had licenses to import.
Then, the business of renting bank accounts appeared. “Many people who left Venezuela sold or rented their accounts with bankrupted businesses or commercial signatures adrift, accounts we turn into recipients of money coming from abroad,” explains Rodríguez. The person who rents out the account gives his password to the money changer and even the phone number associated with it. Rodríguez has two girls under his employment, he pays them three minimum wages so they handle transactions all day. “I protect myself, dude, the account moving the bolivars isn’t mine, and I’m not the one handling it either. In case anything happens, they won’t track me. Same thing here in Colombia, on this side you can rent an account too, and even if there are less problems to move the pesos, you need several personal and commercial accounts to deposit what’s coming in as the number of clients grows.” For 300,000 pesos ($100) you can rent a bank account.
All Roads Lead to Cucuta
A key factor is the value of the bolivar soberano; even deflated, it was until recently the only currency available for trade, cash scarcity and all. This led to the cashn wholesale business: large amounts of soberanos were generated (bought for cheap inside Venezuela or at the border) to be later sold to cambistas, who make transfers every day. This cash will soon transform into dollars, here on the border. It’s all regulated by its own rates, with stubborn and arbitrary hagglers since, according to the urgency and amounts required, prices may vary.
You don’t have to think long to realize that, in addition to cash hoarders that profit from bolivars, there are also “businessmen” who receive million-dollar credits from the government or licenses to import and don’t actually bring anything in. So yes, according to money changers at the border, wholesalers are frequently aligned with chavismo. They are the cash cows that thousands of cambistas getting remittances from the rest of Latin America depend on.
As with human trafficking, the most important connections between exchanges on the south and these cash suppliers are made from Colombia.
On Black Friday, after sunset, I meet Miguel Giraldo, a young programmer who worked as a money changer in 2017 and 2018, but now is devoted to businesses that don’t require as much time. He’s young, tall and thin, brown hair to his chin, sitting in a lotus flower position inside a tiny office, watching anime on his laptop. He greets me and turns on the fan. “How did it go downtown?” he asks. I answer that it was a disaster and people, my countrymen, weren’t happy with what they found on a Black Friday advertised for almost two months on the radio stations in the nearby Venezuelan Andes.
That afternoon I found the same prices as the rest of the year, insignificant sales, the same mediocre products and Chinese knockoffs. I saw cincomilazos (convenience stores where everything goes at 5,000 pesos) selling tons of disposable stuff, knockoffs they took from street vendors and hawkers selling stolen merchandise. I saw sad, desperate Venezuelans going home empty-handed. “It was false advertising,” says Giraldo, “since by law, here, sales last up to two weeks. People came from Venezuela thinking they’d get a good deal for their cash, but when they wanted to turn it into pesos, Cucuta was already flooded by banknotes. Cambistas were paying half of what they’re worth and wholesalers let it be. Besides, the things that were actually on sale, like TVs or fridges, couldn’t be taken to the other side of the border bridge. You’d have to use the parallel, illegal roads, and give money to paramilitaries. Today was a day everyone, except Venezuelans, won.”
In Miguel’s opinion, built by his frequent exchange with people from the Venezuelan Andes, transfers are no longer a profitable business. He says that anyone thinks they’re a cambista now and the chavista government is allowing commerce with money from abroad. It was a well-structured plan, according to Miguel: the years he made more money with remittances were 2017 and 2018, with the border closed, mass migration and foreign currency control measures that threatened citizens with jail if they had dollars. Now, after killing the private sector, a small caste of businessmen aligned with Maduro is born, looking to replace those who went bankrupt or left, and they hold dollarized bubbles that provide a feeling of social stability.
Miguel’s conclusion is bittersweet: many “businesses” that made a profit during the humanitarian crisis, will eventually become real corporations and tools to preserve the profits made by people close to the Maduro regime. “If people can use dollars, even if it’s slowly, they won’t depend on this system anymore. Colombians won’t even notice. One more business that left as it came.”
Miguel tells me about who taught him how to be a money changer: an evangelical pastor with churches in Colombia and Venezuela. “Seeing how so many of his congregants needed to send money to Venezuela, he started a currency exchange using his congregations’ accounts. Helping his brothers helped him buy an armored SUV that he now drives.”
I have my last meeting with Giorgio Rodríguez to clarify some doubts about his story, and before leaving, I open my wallet to pull out the lone five-dollar bill I left Venezuela with, my lucky charm. “How much is this worth, man?” I ask. “When I got here, everyone gave me different rates and in Merida they wouldn’t even take it.” Giorgio laughs and says that, in Venezuela, bills of low denomination, or scribbled (like mine) are turned down because they’re cheaper at the border. “A dollar is 2,500 pesos, but in that shape I can buy it from you at 1,800. If you give it to me, I can take it to men that wash it off with chemicals and leave it looking as if just minted. That’s what we do with ugly bills, and then sell them for the right amount.”
I shake my head and say goodbye, putting my lucky dollar away, so it doesn’t end up as another prey of the border’s ecosystem.Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.