The Americas: Venezuelans dance on a volcano of economic and social ills
CARACAS, Venezuela -- With just moments to go before my flight departs, I dash through the airport, suitcase and camera bag dangling from my arms. Like all those leaving Venezuela these days, I scurry from gift store to souvenir shop trying to unload a fistful of bolivars, the colorful local currency. Venezuelan banks gladly convert U.S. dollars (or any other hard currency). But due to strict government controls on exchange rates and capital outflows, they are only required to repurchase 30% of what one originally cashes in. Eventually, I'm stuck with 5,620 bolivars (about $33) that I cannot trade in for greenbacks. With no desire for duty-free whiskey and no need for perfume, I hustle onto a 727 and pray that I can sell my bolivars during my layover in Puerto Rico.</br></br>While visitors find Venezuela's exchange controls vexing, harder hit are the Venezuelans themselves. President Rafael Caldera's suspension of certain constitutional rights has caused some individuals to consider seeking their fortunes elsewhere. However, severe limits on taking one's own money out of the country keep most frustrated Venezuelans at home.</br></br>"My credit cards are void outside of Venezuela," says one Caracas executive, referring to yet another state-sponsored means of exchange control. "I don't have any plans to leave the country . . . I don't want to go to the currency control office and beg to travel abroad so they can tell me, `Here's $2,000 to spend overseas for the whole year.'"</br></br>In another example of the market distortions that these restrictions inspire, President Caldera and his agriculture minister, Ciro Anez Fonseca, met at Miraflores Palace last month to ensure the supply and low cost of a Christmas delicacy called hallacas -- a sort of tamale that is to the Venezuelan yuletide what turkeys are to Thanksgiving Day in the U.S. The dish contains about 20 ingredients that must be imported. Under exchange controls, the government grants (or denies) companies access to hard currency with which to import such items. Apparently, such permission has been given and the prices of the necessary supplies are being controlled to keep this treat cheap. "It would be very embarrassing to the government if there were no hallacas this Christmas," says Vladimir Chelminski, executive director of the Caracas Chamber of Commerce.</br></br>While managing the supply of hallacas may seem amusing, the situation is far more chilling for Venezuela's publishers and broadcasters who survive on such things as imported newsprint and satellite dishes. "The owners of media companies are afraid that if they strongly attack the government they could lose their access to foreign exchange," says Rafael Palacio, a talk-radio host and reporter for the Caracas daily, El Nacional. "A newspaper without newsprint or a radio station without supplies is condemned to failure."