Thread: In Venezuela, Cooking With Firewood as Currency Collapses

Socialism - the inevitable end. Waiting to be bailed out by capitalists...This reminds me of the Russia and Ukraine that I personally witnessed in 1991. The people were lucky to find $5.00 a month to live on. There were breadlines, the mafia and the black market were about the only thing that was functioning and the people were living in poverty. The political elites lived well in comfortable little islands in a sea of poverty.

In Venezuela, Cooking With Firewood as Currency Collapses

By ANA VANESSA HERRERO and NICHOLAS CASEY
SEPT. 2, 2017



Empty cases and shelves in a grocery store in Cumaná, Venezuela, last year.CreditMeridith Kohut for The New York Times

CARACAS, Venezuela — Food shortages were already common in Venezuela, so Tabata Soler knew painfully well how to navigate the country’s black market stalls to get basics like eggs and sugar.
But then came a shortage she couldn’t fix: Suddenly, there was no propane gas for sale to do the cooking.

And so for several nights this summer, Ms. Soler prepared dinner above a makeshift fire of broken wooden crates set ablaze with kerosene to feed her extended family of 12.

“There was no other option,” said Ms. Soler, a 37-year-old nurse, while scouting again for gas for her stove. “We went back to the past where we cooked soup with firewood.”

Five months of political turmoil in Venezuela have brought waves of protesters into the streets, left more than 120 people dead and a set off a wide crackdown against dissent by the government, which many nations now consider a dictatorship.

An all-powerful assembly of loyalists of President Nicolás Maduro rules the country with few limits on its authority, vowing to pursue political opponents as traitors while it rewrites the Constitution in the government’s favor.

But as the government tries to stifle the opposition and regain a firm grip on the nation, the country’s economic collapse, nearing its fourth year, continues to gain steam, leaving the president, his loyalists and the country in an increasingly precarious position.

Petróleos de Venezuela, the state oil company that is the government’s main source of income, reported in August that its revenue fell by more than a third last year amid production declines — part of a long collapse that chokes the country’s supply of dollars needed for imports of food and other goods.

The falling production mirrors trends in nearly every product that the nation depends on, from potatoes and corn to automotive manufacturing, with fewer than 1,100 cars made in the country through July this year.
Photo

Gustavo Misle, 80, in Caracas with sign that reads “going hungry.” Mr. Misle, a retired university professor, has seen his monthly pension dwindle to a few dollars. CreditMeridith Kohut for The New York Times

And while production falls, prices continue to rise with inflation. The price of food in Venezuela increased by more than 17 percent in July alone, according to the main nongovernmental group that tracks inflation, aggravating a food crisis that had already shattered the image of Venezuela, an oil-rich nation that, until recent years, was the economic envy of many countries in the region.

“This is unprecedented,” said Ricardo Hausmann, an economist at Harvard University and former Venezuelan planning minister, contending that the economic declines are worse than those in Mexico during its economic collapse in the 1990s, Argentina in the 2000s and Cuba after the fall of the Soviet Union.

In one nine-day stretch in late July and early August, the price of the bolívar, the national currency, fell by half against the dollar on the black market, cutting earnings for people who make the minimum wage to the equivalent of just $5 per month.

Even though the government has been raising the minimum wage relentlessly, it has not nearly kept up with inflation, leading to an 88 percent drop in earnings over the past five years for the workers who rely on it, Mr. Hausmann said.

Luis Palacios, a 42-year-old former security guard here in the capital, Caracas, has gone hungry as inflation has decimated his wages. He spent a year watching his family lose weight, until his wife took their two children, 1 and 5, to Colombia five months ago in order to get more food.

“My child was thin,” he said. “We couldn’t get medicine when she was sick.”

His wife decided not to return. Mr. Palacios, unable to afford the public bus to get to work, quit his job a month ago because inflation rendered his salary nearly worthless. His severance pay lost much of its value in the two weeks he had to wait for it to arrive.

“I’ve lost seven kilos in just a few months, and since my family left, I can only think of my children,” he said.

Cash has dwindled so much in value that it has disappeared in places, like Mariel Bracho’s taxi stand at the country’s main airport. Ms. Bracho takes only debit cards or bank transfers, and still has a sign with prices dating back a year ago because the company hasn’t been able to find paper or ink to print a new one.

“But there’s not even many people who take a taxi from the airport anymore,” she said, given the cost.

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Bottles of water occupied most of the refrigerator of Araselis Rodríguez and Nestor Daniel Reina in Cumaná last year. CreditMeridith Kohut for The New York Times

It’s a pattern that leaves people like Olympia Jiménez, a 49-year-old waiter in Caracas, terrified about his wages and tips. They’re vanishing, he says, because even when people are well off enough to eat at a restaurant, they cannot carry enough bills to leave even a small tip on the table.

Mr. Jiménez’s solution: He leaves clients his full name, address and banking details so they can transfer money to his checking account.

“They’ve given me up to 40,000 bolívars that way,” he said, which is about $2.50 at the current black market exchange rate but would require a staggering amount of cash in a country where the main note remains the 100 bolívar bill.

Many economists trace the inflation to problems at the state oil company.

As the company’s production declined, it became increasingly dependent on the outside world, depending on foreign companies to pump its oil and even on the United States for the crude oil used in refining. Now the use of these foreign contractors is generating steep bills at a time when the company has little income to pay them.

The Venezuelan government’s answer has been to pay in bolívars whenever possible and to print more cash. In a single week in late July, the country’s monetary base, or the amount of cash that exists in the country, rose by 13 percent, the highest increase many economists said they had ever seen. While printing more cash shores up the oil company in the short-term, it lowers the value of the currency for Venezuelans.

“Bolívars are like ice cubes now,” said Daniel Lansberg-Rodriguez, who leads the Latin America practice at Greenmantle, a macroeconomic advising firm, and teaches at Northwestern’s Kellogg School of Management. “If you’re going to go to the fridge and take one, it’s something you have to use right now, because soon it’s going to be gone.”

For the 34-year-old owner of a fireworks company in Caracas, one of the main challenges has been converting the bolívars he receives into dollars. Last year, he could find people selling dollars, the owner said, declining to give his name because exchanging bolívars on the black market is illegal. Now, he can still find black market dealers, he said, but it is much more costly.
Most Venezuelans, like Ms. Soler, the nurse who began cooking with firewood, don’t have access to dollars.

Since running out of gas this summer, Ms. Soler’s family members have been able to find it only intermittently, buying it as soon as it’s available because the value of their money depreciates so quickly. If the gas runs out again, the family say it is prepared, having learned to cook on the bonfire set up in the patio.

But Ms. Soler’s main fear, she says, is the price going beyond what she can afford.

“Before it was cheap; you just had to wait six hours in line,” she said. “Now you might get it, but it’s expensive.”

https://www.nytimes.com/2017/09/02/w...5&src=trending

That is very sad.

Not saying Chavez's program didn't work out, or wouldn't have worked out - but since the US tried to make sure it didn't - so how much do we have to do with the situation?

How does a country so rich in land, and every thing, not be able to feed itself? Who owns all the land?

But a wood fire cooks very good.