We are imprisoned by the bolivar

When the Venezuelan bolivar is called “strong”, it is no longer because of its promised – and never achieved – sturdiness and stability; instead it seems today to be due to a fortification.

The strong bolivar is the largest Venezuelan prison; most of the population is found in it, all deprived of liberties that were possible a few months ago using local currency: purchasing vehicles and its parts, international air tickets and imported medicine.

With the exception of Colombia, a borderline nation, no other country accepts the bolivar in their exchange houses; not even the politically-alike countries like Bolivia, Argentina, Nicaragua or Ecuador. This last one adopted the US dollar 15 years ago, achieving – among other things – the stabilisation of the inflation levels by unabling public authorities to print currency without any backup (situation which has protected the real income of Ecuadorians, whose minimum wage is around 354 USD, unlike those of Venezuelans who cash 32 USD at a rate of 174 bolivars per dollar, at the time of writing these lines).

For Venezuelans, having an income in local currency does not guarantee the acquisition of basic products. With expropriated and unproductive companies, the demanded products can only be bought to external suppliers using US dollars.The public administration has the monopoly on the currency market and it gives it a restricted access. They also decide at what exchange to sell currency, which intermediary will purchase the basic goods and to what value they will sell it on the national market. Regulated prices provide a very low profit margin, even losses, that disencourage national producers and lead to shortages and waiting lines everywhere. At the same time, saving money for ultimate goals like buying a household becomes inconvenient: no one would dare keep their bolivars as they lose their value. The available option for new families is to put their names on an official list and wait for a distant promise of a household award; if they get it, they do not get to decide where to locate it, let alone the right to sell it or rent it, since they are not the real owners.

According to figures of the Venezuelan Central Bank, between January 2014 and January 2015, the monetary liquidity has risen a 62,4%. This means that the emission of bolivars has continued non-stop to balance the public expense deficit, which explains one of the reasons why the country holds the greatest inflation on the planet and, in consequence, the lowest purchase power on real salaries. If present politics remain unchanged, these will continue to fall, unlike Ecuador and the rest of Latin America.

Salaries represent the value of the hours worked by the citizens, and inflation makes each bolivar earned less “strong”. Some opinion streams in Venezuela suggest that the US dollar is adopted in order to stabilise the real income and prevent the Central Bank to print bills without backup. It is worth listening to this alternative, evaluate it objectively and decide if, as Ecuador did with its sucre, we can break this “prison” in which the bolivar has transformed.