Page 7 - TTC MAY 26
P. 7
WORLD NEWS A11
Tuesday 26 May 2015
Businesses quietly switch to dollar in socialist Venezuela
HANNAH DREIER bling value of the bolivar, Shoppers queue outside of a supermarket in downtown Cara- held in the country.
Associated Press which has lost more than cas, Venezuela. Venezuelans continue to struggle to find ba- Meanwhile, inflation is rac-
CARACAS, Venezuela (AP) half its value this year, sic goods including detergent and sugar. Most of the shortages ing so fast that ATMs have
— It’s still possible to buy a plunging to 400 per dol- in Venezuela are driven in part by the country’s tight currency failed to keep pace. Many
gleaming Ford truck in Ven- lar on the free market as controls, which make it hard to get dollars at a subsidized rate deliver a maximum of just
ezuela, rent a chic apart- Venezuelans scramble to for imports while creating a thriving black market for currency. $1.50 worth of bolivars per
ment in Caracas, and snag convert their savings into a transaction. Some shop-
an American Airlines flight more stable currency. (AP Photo/Fernando Llano) pers stay away from cash
to Miami. Just not in the It’s a politically uncomfort- altogether, according to
country’s official currency. able situation for President reports in local media,
As the South American na- Nicolas Maduro, who regu- leaning more heavily on
tion spirals into economic larly leads chants of “grin- credit cards so they can
chaos, an increasing num- go go home” and says cur- pay for purchases later,
ber of products are not rency speculation is one of when they’ll cost less in dol-
only figuratively out of the the main tools used by en- lar terms thanks to inflation.
reach of average consum- emies to try to sow chaos Decade-old price controls
ers, but literally cannot be and force him from power. make staple items ridicu-
purchased in Venezuelan It’s not just businesses chas- lously cheap for all Venezu-
bolivars, which fell into a ing greenbacks. Real es- elans.
tailspin on the black mar- tate contracts are still draft-
ket last week. ed in bolivars to satisfy a re- Continued on page 27
Businesses and individuals quirement imposed by late
are turning to dollars even President Hugo Chavez,
as the anti-American rhet- but in upscale neighbor-
oric of the socialist adminis- hoods most owners oper-
tration grows more strident. ate outside the law and
It’s a shift that’s allowing sell and rent in dollars only.
parts of the economy to A group of realtors in tony
limp along despite a cash eastern Caracas has es-
crunch and the world’s tablished a password-pro-
highest inflation. But it could tected website for listings
put some goods further out in dollar prices. Analysts
of reach of the working say the administration likely
class, whose well-being has sees a limited dollarization
been the focal point of the as the only way to prevent
country’s 16-year-old so- multinationals from leaving
cialist revolution. the county altogether, as
The latest sign of an emerg- Clorox did last year, citing
ing dual-currency system problems brought about
came earlier this month by decade-old currency
when Ford Motor Co. union controls, supply shortages
officials announced the and inflation that hit 68 per-
company had reached cent last year, and econo-
a deal with officials to sell mists believe is now well
trucks and sports utility ve- into the triple digits.
hicles in dollars only. Production at Ford has
A few weeks earlier, Ameri- fallen by 90 percent as the
can Airlines said it had company struggles to gain
stopped accepting boli- access to dollars needed
vars for any of its 19 weekly to import parts. Custom-
flights out of Venezuela. ers will now transfer Ford
Customers must now use dollars in advance to pay
a foreign credit card to for the import of the parts
buy the tickets online. Vir- needed to assemble the
tually all other foreign car- cars in Venezuela, accord-
riers have made the same ing to union officials.
switch with the govern- Foreign airlines made their
ment’s consent, according switch to dollars after the
to the Venezuela Airlines government refused to let
Association. them convert and repatri-
Driving the shift is the crum- ate $4 billion in ticket sales
