This week, for instance, the price of a dozen eggs topped 2.6 million bolívares — equal to two weeks’ pay at the minimum wage. But for a Venezuelan who can exchange dollars at the black market rate, those same eggs are a relative bargain, costing only 60 cents.
Venezuelans are increasingly being separated into two classes: those who have dollars and those who do not.
Consider the case of the Berroterán sisters.
Stung by rising prices, Evelyn Berroterán, a 43-year-old living in Guarenas, a poor suburb east of Caracas, had cut her intake down to two meals a day. Then her 27-year-old son joined an exodus of Venezuelans from the country and settled in Ecuador, which adopted the U.S. dollar as its currency in 2000. He landed a job in a brick factory and began sending home $50 a month.
Suddenly, everything changed. Berroterán began eating three meals a day again, and buying chicken and beef. She quit her job as a street vendor in downtown Caracas, and could even afford to splurge on something that had previously been a luxury — toothpaste.
“We don’t live like rich people, but to be honest, my son is saving our lives,” she said.
A few doors down, her younger sister, Marisol Berroterán, a 41-year-old single mother, is living a vastly different existence.
Her tin-roof home looks almost the same as her sister’s. But her only source of income is the minimum wage in bolívares she earns as a cleaning lady for a state construction company. Her better-off sister sometimes buys her food. But Marisol Berroterán has not been able to afford soap or shampoo for months.
“I never feel clean anymore,” she said. “We’re hungry most of the time. I don’t think things will get better.”
Asdrubal Oliveros, director of the Caracas-based consulting firm Ecoanalítica, estimates that nearly a third of Venezuelans have regular access to foreign currency, mostly through remittances, savings or salaries paid in dollars. Remittances have become a saving grace, the upside of an estimated wave of 2 million Venezuelans fleeing the country this year to find work and food.
Most families with remittances coming from relatives working in other countries are receiving between $70 and $100 a month.
“Those receiving dollars have access to money that stays stable in value, but those who depend on bolívares have seen their purchasing power reduced by nearly 90 percent in the past year,” Oliveros said. “They are condemned to aggressive, devastating impoverishment.”
Maduro has blamed the downward spiral in this oil-rich nation on an “economic war” waged by “foreign empires” — chiefly the United States. But economists largely tie the country’s collapse to failed socialist policies that began in the 1990s under Maduro’s predecessor as president, Hugo Chávez. Under Maduro — a former bus driver and union leader — the economy has gone from bad to worse, a situation seriously compounded by lower oil prices.
This week at a ruling-party convention, Maduro admitted that “the productive models we have tried have failed and the responsibility is ours, it’s mine.” Last week, he announced “new economic measures,” including eliminating five zeros from the bolívar — a currency whose largest bill is now 100,000.
On Thursday, the pro-government Constituent Assembly said it would legalize more exchange houses, potentially easing some of the restrictions on buying dollars that force most Venezuelans to purchase the U.S. currency on the black market. However, the measure appeared to fall well short of the kind of drastic solutions economists say are needed to halt Venezuela’s hyperinflationary spiral.
For some residents, the distortion in currency rates has presented a golden opportunity. A number of Venezuelans are scooping up cheap luxury apartments — or even entire buildings — at deep discounts by paying in dollars, gambling that at some point, the economy will recover. Others are taking advantage of incredibly cheap WiFi and energy to mine cryptocurrencies such as bitcoin.
And for the best off, living well has never been cheaper. A lavish meal at one of the capital’s finest restaurants, for instance, can be sky-high in bolívares — but for those with dollars, it may cost no more than the price of a pizza in the United States.
Some young entrepreneurs have found ways to thrive in the hyperinflationary economy. A 30-year-old businessman, for instance, said he has launched two companies in the past year — one that produces eggs, and another that distributes food. The companies are taking out short-term loans in bolívares to finance operations. But they use a cache of previously purchased dollars to pay them back — making the cost of the loans, in dollar terms, cheaper by the day.
“I personally think that in the biggest crises are the biggest opportunities,” said the entrepreneur, who spoke on the condition of anonymity out of fear of government reprisals for playing the exchange-rate market.
Far more Venezuelans, though, are using their cherished dollars to merely survive.
Thanks to the $50 a month her son sends, for instance, Evelyn Berroterán is able to stock her once-empty pantry with bags of corn flour and rice that she uses to feed herself, her husband and their grandchildren.
With public utilities collapsing because of fleeing workers and a lack of spare parts, homes in her neighborhood have running water only once every two weeks. With her new stream of dollars, however, she has been able occasionally to buy water from a private company.
Her sister Marisol, with only bolívares to spend, cannot make such purchases. She has not bought chicken or meat for the past 12 months, and her children are going to school with broken shoes. She recently started burning grass and using the ashes as deodorant, and she substitutes lemon peel for the toothpaste she can no longer afford.
Her sister, Marisol said, “is blessed because she is receiving dollars.”
“But I’ve become embarrassed about my life,” she said. “I remember how nice it was to smell my hair after showering with shampoo. I can’t do that anymore.”
Anthony Faiola in Miami contributed to this report.