Location: Puerto Ordaz, Bolivar State
Occupation: Designer, programmer, editor
Talking about inflation in Venezuela is equivalent to trying to understand why a fan murdered John Lennon. The acts and consequences of this phenomenon that torments us so much cannot be easily explained, to the point that if you ask 20 economists you will get 20 opinions about the causes why Venezuela is submerged in one of the worst crises of all time. However, what we will all agree on is that it has a considerably negative impact on the way of life of Venezuelans.
The purpose of all this is not to delve into the reason of the situation, or when or where we are going. I will not talk about extremely complex concepts of economics, just as I do not intend to explain the situation to you with overly simplistic terms. The reality is that anyone with common sense has the ability to understand how inefficiency and impunity have destroyed our economy.
What is the situation with money in Venezuela really like?
For a host of factors (mostly caused by the unpunished administration of Venezuelan money) we have seen dramatic decreases in the production of all sectors that keep the economy of any country standing, and in particular, this results in an imbalance between the supply and demand of most of the products and services that are carried out. To "diminish" this, the heads of state in conjunction with the Central Bank of Venezuela have done just what should not be done: print money. This of the entrance of inorganic money to the economy of a country is something very difficult to explain; However, I like to make it known with the following sentence: "Every time we have more money, it is worth much less".
For 6 years, we have suffered an increase in the minimum wage, 26 times. Why do I say that we have suffered? Simply by the fact that these "increases" cause an imbalance if factors such as increased production, supply-demand, and a long list of other factors. Although at first glance we see how our salary is 200% higher than before, its equivalent in dollars decreases incessantly. As of today and making calculations as simple as a rule of three, the salary of an average Venezuelan in bolivars is considerably higher than in previous years; however, when we change to the dollar rate, the picture becomes depressing. As of today, as I am writing this for you, the equivalent salary is approximately $5.
How do we manage to live with such poor income?
The million dollar question. The answer is as disappointing as the impact of the harshness of these words: People do not live, they are dying. The vast majority of Venezuelans are in a situation of poverty and with their monthly income they only manage to supply themselves, at the most, for 3 days of food. One month of work to support your family for three days? Well… Yes. This terrible reality has made us turn to administer minimalistically the food we eat. If this is the situation with food, I invite you to reflect on how those with diseases or medical conditions that should be treated do.
Let's talk about numbers and products: What can you buy with a basic salary?
In a country with one of the highest inflations in the world, buying something with $ 5 is an almost impossible task. This "inflationary" effect causes products that normally have a low value to increase considerably. Economists over the years developed a way to explain this phenomenon by means of… Hamburgers: A Big Mac of McDonalds in any country is around 3-5 USD; while in Venezuela it ranges between USD 10-15 (solidarity prices considering everything that costs them to produce or import their ingredients). Concluding this idea, we have the bitter taste of knowing that with 3 months of work we can buy a hamburger, thanks economists.
Despite this there are food alternatives, such as using a diet strictly vegetables and tubers (potatoes and pumpkins, for example); However, buying cheese or eggs are also often the choices of many to extend their weekly, or even monthly, diet. Those who manage to prolong the food in their homes, is because they are prohibited from eating 3 times a day, reaching a daily intake of two meals or even one meal.
20 years and 3 monetary reconversions later, we have witnessed and lived in our own flesh as our purchasing power goes into exponential recession. The only people who survive this are those who at key moments managed to discern or predict what was the future that awaited us. The saving in foreign currencies and the purchase of goods and products in order to prevent our money from being devalued became our best allies. Unfortunately, we did not all run with that luck or we had the vision that this would go so far (and it can be even worse), so we just survive the day to day with poor incomes and the conviction that this deplorable situation will one day switch to.
Is there a lesson to be learned in all this?
If there is, as always. Any country is prone to fall into an economic recession that leads to a difficult path; but with the experiences of others you can acquire knowledge of how to avoid it and, in the worst case, how to cope with it. My reflection about all this is not that of an economist, much less a specialist in the field, is that of a humble Venezuelan who constantly struggles to survive. The best way to combat this phenomenon is to avoid it at all costs, forming professionals capable of taking far-reaching measures for the economy and for the country. And above all, educate people so that they can identify the problem before something happens like what happened in my country.