Monthly Salary of $20 Shows Why Venezuelans Wait in Food Lines
Venezuela, the country known for long food lines and shortages of toilet paper and deodorant, can be a paradox at times.
Specialty food stores in Caracas are well stocked with delicacies including imported lamb chops, smoked salmon and caviar. For those with U.S. dollars, those luxuries are relatively cheap, too. Yet most Venezuelans can't afford the greenback. Residents depend on local salaries paid in bolivars, the national currency which hasdeclined 97 percent in the past three years. At the current black market exchange rate, 100 bolivars, the country's biggest bill, is only worth 36 U.S. cents.
Venezuela has maintained strict currency controls since 2003 and currently has three legal exchange rates. The government sells dollars for 6.3, 12 and 177 bolivars. The first two rates are used for imports of government-authorized priority goods including food, medicine and car parts. The third rate, introduced on Feb. 12, can be used by anyone who doesn't receive authorization to buy dollars at the first two.
On the black market, where people and businesses turn when they can't obtain government approval to purchase dollars at the three legal rates, one dollar currently buys about 280 bolivars. The currency has fallen 38 percent on the black market this year alone, pushing the minimum wage down to about $20 a month. That's on par with Ethiopia and well behind regional peers including Colombia and Brazil, according to WageIndicator.org data.
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