Listen: Venezuela, United States, Gabriela discussed on The Indicator from Planet Money
"And one of the biggest economic stories of two thousand nineteen was Venezuela. The year started out with widespread blackouts. There was crippling inflation. Attempted political coups food shortages and one of the worst humanitarian crises in the World Venezuela has not been getting as much attention lately news out of Venezuela has died down in a little bit but we checked back in with Gabriele Saadi. She is an economist in Venezuela from Caracas and we spoke with her at the height of the crisis last year and according to her things are looking up in Venezuela a little bit and the reason she says has everything to do with. How Venezuelans themselves have responded to this crisis? This is the indicator from planet. Money I'm Stacey Bannock Smith today on the show how Venezuelans responded to their economy and country collapsing around them and how they made some changes and innovations nations. That have actually helped the situation now. Gabriella you have been tracking economic indicators in Venezuela since the economic crisis began around two thousand fourteen Thank you by by the way for joining us. Thank you your New York. Actually I brought you something from Venezuela yes please. I very excited. I saw you had a gift bag with a snowman. Open it over Smith. Oh my gosh okay. This is like A. It's like a purse Tom Is this made out of Venezuelan money. Yes it's made out of alliterative. Wow it's beautiful it's like woven yeah Oh my gosh yeah you can see them around the city and people do that because since believe what is worthless now they are making like art out of of it so you can purchased it. I paid like three dollars for that. This person has to have. How many bills do you think this has hundreds? Yes I asked the guy. He didn't know exactly the number but he told me it was above. One Hundred Dot Dawson. I mean you need like forty thousand believers To purchase one dollar. So yeah. This wouldn't even yeah worth one dollar. I mean this is the money you grew up with. I imagine. Yeah how does it feel to see like hundreds hundreds and hundreds of dollars like woven into a purse of boulevard is a boulevard. Sorry Yeah it's I'm an economist so for me. It's I mean on one hand it's interesting but on the other hand it's like I mean you can see how bad the situation is and so I see you much more than just believe. What is you know I think about the people that yeah how desperate you must be but also like how creative Venezuelans are? Because who would have I could. Do you know that you could make this out of believe what is Gabriele says. A lot of people have started making crafts and art out of Boulevard. He's maybe the ultimate indicator of so-called typer inflation so inflation when prices go up there is inflation in healthy economy in the. US inflation is around two percent. A year hyperinflation is what is happening in Venezuela and his way up that is when prices start rising and rising out of control. Hyperinflation reached almost inconceivable levels in Venezuela in two thousand nineteen in March hyperinflation. Inflation was around one million percent a million percent inflation so that means if something cost a dollar at the beginning of the year it will cost around ten thousand dollars by the end of the year her but Gabrielle Says Leader in Twenty Nineteen. The inflation situation did come down and now the year ended and deflation is fifteen thousand percent. Christon that's much better. Yes but still I mean that's still law. It's still a lot and I mean according to some estimates. We won't have hyperinflation next year. I mean well this year. Sorry Twenty Twenty What how did that happen so yeah basically now now we have more dollars circulating in the economy that more? US Dollars Oh we have two point seven billion dollars in the economy now. Oh Oh yeah so. We have our hillary station. The factor now in Venezuela more than half of the transactions that occur in Venezuela are in US dollar. Oh Wow yes yes. It was funny. 'cause before you wouldn't even think of paying in dollars like showing your dollars to someone because he was even illegal to Carrie. US dollars with you but now so risky to show someone dot. Yes so now like I would go to a grocery store and I would pay with my dollars and it. It wasn't a problem they would. They even had changed even coin sometime. Yes like quarters they would have them all those. US dollars helped stabilize allies. The Venezuelan economy. There was a way to pay for things again. Stores could have stable prices. Gabriela says that has been a game changer for Venezuela even Venezuelan President Nicolas Nicolas Maduro who has consistently railed against the US and the US dollar said all the dollar circulating in Venezuela. Were a great thing. He said it in a televised vice speech he actually said. Thank God for dollarisation. Gabriela says when he said that she could not believe it and also all of those. US dollar circulating in the economy has also led to another innovation which is helping to address Venezuela's ongoing food shortage. More on that after the break support for this podcast and the following message come from salesforce a customer relationship management solution committed to helping you deliver the personalized experiences that customers want salesforce bringing companies and customers together visit salesforce dot com uh-huh slash learn. More support also comes from navigator. Say Goodbye to meetings that waste time and low to meetings your team will love navigator Pairs beautiful beautiful agendas with automations for the busy work. Most leaders don't have time for try for free at navigator Dot Com. So you might remember. In the beginning of two thousand nineteen gene Venezuela experienced massive food shortages. So as the economic crisis in the country worsened local farms failed factories closed. Foreign companies left and Venezuela was not making enough food to sustain its population also Venezuela was not big on importing. The country had really really high tariffs in place and that coupled with US US sanctions forbidding most trade within Walea and the crazy hyperinflation meant store. Shelves were often bear Gabriela. Says she could see everyone. Getting skinnier ear and skinnier. After all carton of milk would cost more than most people earned in a month. And even if you had that money a lot of stores would not have any milk to sell. But but that's as Gabriela has changed and that's thanks to another thing that happened in two thousand nineteen the rise of the Bodega. Certainly you start seeing all this this stores we call them. They onus where you can see all these imported goods from the US thing we call them mini Costco's like new well. Well they have no tell us that they bring a New Delhi. Yeah well I know to have the base. Yeah of course Cereal Milk pancakes mix mix. I mean yeah all sorts of things and you start to see them you know for example. I would take my car to this place to get it fixed. I and they would have gone there with all imported goods Even in a salon in a beauty salon they would have a little bullied by some pancake. Mix Yeah I knew. Tell if yes so now Yeah some people call venit Venezuela or they're going to like us a joke so a few things happened that caused the rise of the Bodega. I madero basically stopped policing taxing imports into the country and also the private sector found. A loophole. Gabriela says just the Bodega owner. She's talked to say they're getting most of their stuff from Florida. And that is Venezuelan expats. have set up businesses that by things like pringles and Orioles and cocoa pebbles inbred directly from places like Costco and Walmart in the US and then ship them right to Venezuela and as a result of the influx of imported food into the country and all of the competing bodegas prices of food have dropped in Venezuela in some cases in half and food is now everywhere also says Gabriela the Bodega is typically only take us US dollars or US bank cards and this means the stores mainly cater to wealthy Venezuelans which is not most people about ninety percent of Venezuelans live below the poverty line line. A lot of people have just given up on the country entirely and fled and Gabriela says that is the final change she noticed twenty nineteen. I have many friends in Venezuela like most of my friends were there no have more friends in Spain and the United States in Venezuela like ninety percent of my friends easily have left the country. Look like everyone who could leave. Has Yes exactly Gabriela. Herself left last year. She's currently living in Chicago getting a degree in public policy but most of her family is still in Caracas. They all do spend the holidays apart but she said that is the normal for her Venezuelan friends and family. Yeah those are like Christmas for Venezuelans. Nowadays it's like you're just separated from your family. That's how it is so we are learning to become a diaspora this year. Venezuela is expected to rival Syria as the country with the the worst refugee crisis in the world or then six million Venezuelans are expected to be living outside the country by the end of the year. This episode of the indicator was produced reduced by Darius Raffin editor is Paddy Hirsch. Our intern in fact Checker is Britney Cronin and the indicator is a production of N._p._R..."