Oh Baby! Taking a Look at The Big Picture

These past few days I have been thinking about the many things still left for me to do before my due date in early October.

At the same time, I have been in contact with several family members in Venezuela that have been keeping me up to date with the very different circumstances faced by new mothers and women with small children in Venezuela.

Before I go into detail on the negative aspects, I do have to say that Venezuela's labor laws are much more favorable towards expecting mothers than most countries. By law:

• Venezuelan women can get up to six months of PAID maternity leave. 
• They can choose to take the leave as early on or as late as they please.
• Women who have rollover vacation and sick days can also combine these days and get up to one year of paid leave. Combining maternity leave and vacation leave has become very common as it is quite difficult to find child care for an infant younger than 12 months old. 
• Most employers also need to provide their employees with a stipend for childcare until the child is four years old.

These benefits sound quite wonderful right about now. I mean, who wouldn't want to get a salary for staying home from work for a year to raise their child? But these perks come with a high price. The three main problems with this approach are:

1. Many companies are unwilling to hire young women for fear that they will get pregnant and then the company will have to pay them a full salary for endless months. 
2. Some of these companies will have to hire a temporary worker and incur additional costs. 
3. Other companies will just have to make the best with less people and as a result the productivity of the company will suffer.

The Shortage Problem

Alas, these advantages have not been enough to encourage women of childbearing years to have more children. The facts is that maternity leave benefits do not make up for the terrifying food and medicine shortages in the country. Diapers (disposable as well as cloth), baby formula, wipes, and any other baby products you can think of, have become virtually impossible to find.

Pregnant women and those with small children are becoming increasingly desperate to find these products. Nursing mothers need to wake up very early and stand on long lines for up to ten hours in hopes of finding the products they need. Most days, they stand on these lines in vain as the products are never in stock or they are quickly snatched by the people in the front of the line.


The Healthcare Problem

It is not just baby products that these women are in search for, medicine and medical supplies are also well sought out. The truth is that if you do not have the money to give birth at a private clinic, you will have to bring your own gloves, gauze, and catheters as chances are that hospitals will not have enough. These items are hard to come by and even if you do find them, many times you will get turned away by overcrowded public hospitals that are lacking surgical supplies and doctors. Many of these hospitals do not have proper ventilation (due to shortages on air conditioning parts) which makes these hospitals a breeding ground for bacteria and infections. Moreover, insufficient lighting and lack of security have caused robberies of babies and personal belongings to become common in maternity wards.

Many doctors (as well as other health professionals) have fled the country due to the economic crisis. Because of this, most hospitals are short on staff. The idea is to get you in and out of the hospital as soon as possible. This attitude is in part responsible for the growing cesarean sections performed in the country. It is a no-brainer, a surgery is much quicker and more expensive than having to attend to a woman for 12 to 16 hours of labor. Most women, and especially those of a lower socioeconomic status, are coerced by doctors to get a C-section. Lack of education and minimal options leave women with no choice.

The ugly truth of public hospitals in Venezuela has been well documented by Betty Laura Zapata, a Venezuelan photojournalist who lives in London. In 2014, she visited some of the public hospitals in the country and interviewed doctors, nurses, and supporting staff in hopes of getting a clearer picture of what is going on in the country. You could see some pictures on Betty's research at Project X-Ray. I should warn you that some of the images are graphic. She also put together a written report on her findings which you can read in the following link: Betty Zapata's report on Venezuelan hospitals. In addition, I am also including a video which aired on Channel 4 News last week.

The Birth Control Problem

Unwanted pregnancies (which are pretty much all pregnancies given the current economic crisis) are becoming more common these days. The reason for this is that the country has virtually run out of all forms of contraceptives. Women are going from pharmacy to pharmacy furiously looking for birth control pills. A recent article in Bloomberg Business, The Latest Indignity in Venezuela, reports that due to inflation rates and shortages, a pack of condoms (if you are lucky enough to find them) can cost upwards of 4,760 bolivares which represents the monthly salary of a worker making minimum wage or $755.

This has also caused teenage pregnancies to spiral out of control with Venezuela becoming the South American country with the second highest teenage pregnancy rate. Women are exploring the possibilities of obtaining long term contraceptive methods such as intrauterine devices which had been used by very few Venezuelan women in the past. However, due to the lack of available information on these methods, many working class women feel apprehensive about exploring this option. In addition, intrauterine devices will do little to address the high rate of HIV/AIDS in the country which is currently one of the highest in Latin America. With women growing more frantic each day, it is only a matter of time before women who are not able to get their hands on preventive methods will resort to illegal abortions in order to eliminate the additional stress that may come with feeding an additional mouth. Talk about a slippery slope!

I present these issues with as much data and details as possible in order to show the big picture. It is important to see and to understand all of the unintended consequences that come with failing economic policies and how the same are affecting the people that these same policies vowed to protect—the poor, the needy, women, elderly, children, and all those whose voice is not being heard. I want to continue being that voice. Until next time.

Whose Land Is It Anyways?

If you have been keeping up with my recent blogs, you may know that Venezuela is pretty much divided between chavista or pro-government, and those that are of the opposition or anti-government. Miraculously, in the recent weeks they have managed to find one issue in which they can both agree.

President Nicolas Maduro has been riling the people of Venezuela to take back the land that rightfully belongs to them. The property in dispute is Essequibo, which currently belongs to Guyana, a country that borders with Venezuela. The territory in question is no small plot of land; it represents about two-third of Guyana's territory.

The area shaded in dark green is the disputed territory

The dispute over this land is one that has been going on for centuries. In 1899, the territory was granted to Great Britain when Guyana was still a colony. Seventy years later, Venezuela defied the ruling and deemed it unfair. The Geneva Agreement dictated that the two countries would need to come up with a viable solution. The talks died down and neither country did much more to address the situation.

All of this changed a few months ago when a large oil field was discovered in the area. Exxon Mobil is in the process of coming to an agreement with the government of Guyana to commence drilling.  The Venezuelan government is doing all in its power to prevent Exxon Mobil from getting access to this land. President Maduro is appealing this matter to the U.N. accusing Guyana of "attacking the dignity of the Venezuelan people" and of "undermining a peaceful diplomatic solution." Maduro is also planning to issue Venezuelan ID cards to the Guyanese people living in Essequibo and to fund an advertising campaign in hopes of convincing the people of Guyana that they are better off denouncing their Guyanese nationality and living under Venezuelan rule.

Unlike the border of Colombia and Venezuela, the border that separates Venezuela and Guyana is not open for crossing as this land is part of the disputed territory. Relations between both countries did start to improve under president Hugo Chavez who was in favor of financing several projects within Guyana including a homeless shelter which was named after him and is still operating under the name Hugo Chavez Centre for Rehabilitation and Reintegration.

It seems clear that the Venezuelan government's real issue is not the land itself, but the fact that Exxon Mobil, an American company, will be getting their hands on this land to drill oil. As if the plunging oil prices weren't a big enough problem for the economy of Venezuela, if Exxon Mobil gets their way, the United States would be importing even less oil from Venezuela. Hence, these desperate measures seem to be driven by economic and political motives rather than patriotic ones. I am curious to see how conquistador Maduro is planning to convince the people of Guyana that they would be better off as Venezuelans. I highly doubt that the Guyanese people will be jumping at the opportunity.

Where's the Booze?

If there is one thing you should know about Venezuelans is that they love their beer. In fact, it is the most consumed alcoholic beverage in the country, but this can all change by the beginning of next month. Local breweries have announced that they have virtually run out of beer and have no hope of replenishing their inventory.

Cerveza Zulia - Venezuelan beer

Due to the strict exchange restrictions, it has been very difficult for breweries to obtain the imported raw material needed to make beer, which includes barley and malt. In an attempt to control high inflation, the government has forced companies to use dollars when conducting international business. The problem is that these brewing companies cannot afford to get dollars in order to pay foreign suppliers. U.S. dollars have become a commodity in and of itself for companies that are already in the hole more than $200 million with foreign suppliers.

Cerveza Polar

Chances are that these companies can find U.S. dollars in the black market. However, the black market is not a charity organization so if they are going to exchange your bolivares (local currency) for dollars, they are going to charge you three times more than the official rate. The brewing companies simply cannot afford to do business with the black market and the government does not have enough dollars to go around. Government-owned companies and a select few private companies are allowed to purchase dollars from the government for a fraction of the costs, but no such break has been given to brewing companies.

To add insult to injury, Fray Roa, the general director of the Venezuelan Federation of Liquor Producers, was arrested this past Friday for going on record saying that the government was responsible for the current beer crisis. He also called for a "zero-hour" planned protest to denounce the government policies that have contributed to the shortages. The government's reaction sent a clear message to all: this kind of public attack against the government will not be tolerated.

Many of you may be thinking: So what if there is no beer in the country? In a time of economic crisis, should people be inebriated anyways? Well, the problem does not lie in people getting their beer fix. The uneasiness of the situation is that if the brewing companies have to shut their doors, as many as half a million people will lose their jobs. Venezuela is simply in no condition to allow this to happen without causing a major ruckus.

Maria's Exodus: A Narrative

Today I want to share Maria's story of struggles and triumphs as an immigrant.

Maria was born in Barranquilla, Colombia. She was the youngest of seven children which consisted of four girls and three boys. Her father was a sailor and her mother was a homemaker. Since Barranquilla is located at the coast of Colombia, there were many merchants, fishermen, and sailors. During the late 60s, violence and corruption erupted in the country. Tragically, Maria's sister and nephew were kidnapped during this time never to be seen again. The family believed that they were captured by one of the many groups that had been selling organs in the black market.

At the age of seventeen, Maria's parents decided to move to Venezuela in search for a better life. Maria's older siblings decided to stay because they did not want to leave their children and jobs behind. They applied for a "border visa" and took the nine hour bus trip to Venezuela. They settled in Maracaibo, Venezuela which is located just a few hours from the border. The family adjusted very quickly; Maria found a job as a maid and her father became a merchant. Nonetheless, her parents became increasingly homesick and were lacking the energy they once had. After five years of working in Venezuela, they decided it was time to go back home. Maria made the difficult decision to stay in order to be able to send money to her elderly parents. She stayed in Maracaibo for another four years before moving to Caracas, the capital.

At the time, Caracas was the epicenter of the world (or at least that's how it appeared to her) and it was a known fact that people were making twice as much money in Caracas than they were making in any other part of the country. Maria went to Caracas in search for a better pay and that is exactly what she found. She started working as a live-in maid and nanny to a Venezuelan attorney and his family. When this family relocated, she started to work for a Jewish surgeon and his family as a live-in nanny. Although the pay was good, she had dreams of going into another line of work that would provide her with a more stable job. She started to work during the day as a nanny and in the evenings she attended Beauty School.

(second from the left) Maria at 1978 Christmas Party, Sandro's Salon

When she obtained her certificate from Beauty School, she started working at a salon as a helper—washing hair and sweeping the floor. After gaining some experience and establishing her own clientele, she moved on to work as a stylist in Barberia La Pescara in Caracas, Venezuela. She was making very good money and this allowed her to send money frequently to her parents back home.

While working at the salon, she met a handsome young Dominican fellow who worked as a shoemaker nearby. In the early 80s, there was an influx of Dominican immigrants coming to Venezuela. They were looked down upon by the locals who considered them loud and vulgar. Maria was no exception, she ignored the man for over a year when she encountered him on her way to work even when he would send a friendly "good morning" her way. Eventually, she decided to reply to his greetings and gradually started to accept his invitations for coffee. It would be another two years before they would marry and soon thereafter have two daughters. Things were finally going well for Maria at the time.

Then on February 18, 1983 something occurred that changes things forever; this particular day is still known in Venezuela as Black Friday. Up until this point and for over 20 years, the exchange rate to U.S. dollars was fixed to 4.30. The bolivar, the local currency, was one of the most valuable currencies in the world at the time. When Maria sent money to her parents in Colombia, it went a long way because the Venezuelan currency had a much greater value than the Colombian one. But on Black Friday, the government of then president Luis Herrera Campins, devalued the local currency by 100% and imposed exchange controls.

Maria in Barberia Pescara, 1981

The effects were felt instantly by the people in Venezuela, including Maria. Many of the immigrants that had flocked to Venezuela a decade ago were now desperately trying to apply for U.S. visas. Maria soon followed suit and applied for a U.S. visa to provide a better life for her family. During the course of five years, her visa was denied multiple times before finally getting an approval in 1988. Maria and her family traveled to the United States in a chilly November morning in 1988. With just a couple of hundreds of dollars to her name, she left behind her job and friends to find a better life for her family.

Maria and her family lived in a rented room on Tremont Avenue in the Bronx for a few months before getting their own apartment. Within two weeks of her arriving to the U.S., she found a job in Caribe Salon in Washington Heights where she established her clientele. Only a few weeks later a client gave her a lottery ticket in lieu of a tip. This proved to be a winning ticket and she won $2,500. She used this money to get an apartment in Washington Heights and to rent a space to open up her own beauty salon.

Maria would go on to eventually own four salons and have two more children in the United States. She was forced to sell the salons when she had an accident that required knee surgery. Notwithstanding, she continues to work on a part-time basis and has no plans of retiring any time soon.

Maria's life as an immigrant is one of many barriers and heartaches. It is also a story of determination, achievement, and a bit of luck. I am overwhelmingly proud to call this hard working woman my mother.

The Inside Scoop from a Lead Economist of The Pre-Chavez Era

This week, I had the opportunity to chat with Darryl McLeod, Associate Professor and Chair of the Economics department at Fordham University.

Professor McLeod was Lehman Brothers' lead economist for Venezuela and Mexico from 1995-1996, a very difficult period for both countries. In 1998 he was part of a Inter-American Development Bank (IADB) mission which recommended labor market and tax reforms. Later he supervised Latin American group at Wharton Econometric Forecasting Associates (WEFA) where he worked with Juan Pablo Fuentes, the economist who was covering Venezuela. You can check out the interview below.

While at Lehman Brothers you and John Welch prepared a comprehensive economic recovery plan for Venezuela emphasizing privatization, flexible labor markets, a market based on exchange rates and transparent management of oil revenues to encourage private investments. Why do you think your plan was not implemented? 

The main reason the plan failed was because of the change in government. Once Hugo Chavez took power in 1999, many foreign, and especially U.S. companies, were viewed with suspicion and the government began to cancel or renegotiate contracts with PDVSA for example, whose ambitious investment plan was key to Venezuela’s future. Many of us saw the need for redistribution and better government, which Chavez promised, but over time most of my colleagues became disillusioned with heavy handed intervention and political repression that characterized the new regime. 

In your opinion, what government policies have been responsible for the country's economic downturn?

First, it is somewhat ironic that many other Latin American countries have benefited from Hugo Chavez regime more than Venezuela. The sharp turn to the left in Latin America in 1999  struck fear into Latin America’s elite and they took steps to redistribute income and economic power in part to prevent a Chavez style regime in their country. Chavez did create many programs to help the poor and other countries followed Venezuela’s lead. The key difference is the policies used to redistribute income. 

There are two ways to help the poor and redistribute wealth. One is to provide cash subsidies to the needy. The other and more problematic way is price controls to make goods cheaper for the poor (and the middle class). The second method can create shortages: firms cannot profitably supply or import the needed goods so store shelves are empty: people have money but there is nothing to buy. So the main problem with Chavez and Maduro style regime is not that they redistribute wealth, but unintended consequences of poorly executed social policy.  

The rationing of dollars and multiple exchange rates is another chronic problem, that fuels inflation and creates economic uncertainty, reducing private investment even further.  Venezuela now has the highest inflation rate in the world, but to its credit it reports price increases accurately (unlike Argentina).  Since I focus on poverty data, I find it strange that SEDLAC and the World Bank do not report income data after 2006 (though the UN CEPAL does). I am not sure if this is data reliability or a political disagreement, reliable data and transparency also helps encourage investment and creates confidence in a government.    

What do you think about the recent wage increases? Will this resolve some of the economic problems in the country?

Ideally it should, but it won't be of much help if the people have more money if there is nothing in the stores to buy. The problem is not having money, but the fact that key necessities are not available to buy at official prices. Easing price controls to end shortages is necessary to restore real purchasing power, raising wages is not enough. 

What policies should the government set forth in order to alleviate the problem?

First the government must restore macroeconomic stability. They can do this by unifying the foreign exchange rate, setting up a sovereign wealth fund, and loosening their grip on the market. Oil price is low, so their external debt may need to be restructured.  The may also need to find partners to invest in the oil sector as Mexico is doing. Once these reforms are credibly in place tax revenues should increase as well as private investment. 

Addressing the crime problem in Caracas is also essential. After ending these fundamental insecurities and uncertainties, they can return to the labor maker and pension reforms our IDB mission recommended just before Chavez took power. People need jobs and goods and services to buy, it is that simple.

In a recent speech, president Nicolas Maduro referred to the practices of the International Monetary Fund as "financial terrorism". What are your thoughts on this?

The IMF has made some fundamental errors in Venezuela, mismanaged food and fuel price increases in 1989 for example that led to “IMF riots” or Caracazo and many deaths.  However the IMF has learned from its mistakes and had recently emerged as an unlikely opponent of austerity and is now a strong advocate for debt relief in Greece for example. And with oil prices this low, Venezuela may need some temporary loans. Venezuela may be able to get loans from Russia or China, but these will not come with the certification, monitoring and credibility that the IMF can provide. 

The Maduro government needs to convince its own people, in Caracas and Miami, that Venezuela has a bright future again.  Other left leaning regimes in Brazil, Bolivia and Ecuador have managed to encourage private investment and reduce inequality, Venezuela should follow their example. Better economic policies would help everyone, not just the poor and the current government. 

Interviewing Prof. McLeod made me realize that most of the issues that the country is facing today were foreseen many years ago. Had the government followed the proposal at the time, the country would be in a much better economic situation and less dependent on oil prices. Notwithstanding, it is not too late for Venezuela to revisit some of these recommendations to come up with a viable solution. 

A big thanks to Darryl McLeod, PhD. for taking time from his busy schedule for our chat!

Places To See in Venezuela

As promised, I am including some of my favorite places to visit in Venezuela. This is truly a beautiful country with beaches, mountains, and so much to see.

Angel Falls, Canaima National Park

Angel Falls, located in Canaima National Park, is the tallest waterfall in the world! You can reach the waterfall in a small plane or if you want to really get the full experience, you can take a canoe tour where you go into the indigenous village and do the trail to the waterfall. It is a breathtaking site and an experience like no other. This is going to take you about 2-3 days to complete.

There are plenty of touring companies that organize these trips and the logistics can be arranged prior to your arrival. This national park is located in the eastern part of Venezuela and it includes jungles, rivers, and savannas. This is a unique experience for those that like adventure and the outdoors.

El Yaque Beach, Margarita Island

Margarita Island is an island off the northeastern coast of Venezuela. There are currently no direct flights from the U.S. to this island, but you can catch a flight at Maiquetia Airport in Caracas, Venezuela.

This is a dessert island with many beautiful beaches.   My favorite (and the safest) beach to stay at is El Yaque Beach. With its strong wind, this is one of the best beaches for surfing. There are plenty of beach front restaurants where you can get fried fish or other fresh seafood. You can stay at one of the many posadas, which are small bed and breakfast located all around the island. Make sure you read many reviews and book your stay before arriving.

Cayo de Agua Beach, Los Roques National Park

Cayo de Agua Beach in Los Roques National Park was recently voted one of the top 25 beaches in the world and rightfully so. It is a pristine beach with a little bit of everything for everyone. It is an unspoiled paradise located in the northwestern part of the country.

This is a wonderful place to visit if you want to explore shallow water reefs. If you are into snorkeling, this is an ideal place to get a glimpse of many fishes, rays, and turtles. This is a true gem and one of the must see places in Venezuela. The best thing about it is that it is not infested with tourist so     you will feel as if you have the beach to yourself.

As you can see, Venezuela has many beautiful attractions. Due to the exchange rates and inflation rates, most of these locations can be visited for dirt cheap. You can get a lot for your money and have a good time as long as you use the necessary precautions.

How to Travel Safely to Venezuela

There are very few Americans traveling to Venezuela these days, but this does not change the fact that the country has incomparable natural beauty to be explored!

There is definitely much to see, but the key to a safe and successful trip is planning and lots of it. Below are some useful tips on how to take a safe trip to Venezuela.

Step 1: Obtain a Visa

• As of March 2015, all U.S. citizens are required to obtain a tourist visa to travel to Venezuela. You can request a visa at the Venezuelan Consulate in NYC and pay a $30 fee. Make sure this is done at least three months prior to your trip and that your passport will not expire within six months. 
• It is also a good idea to enroll in the Smart Traveler Enrollment Program so that you can stay up to date with safety and security announcements. 

Step 2: Buy Tickets

• It is fairly easy to get tickets online, but it is going to be a challenge to get nonstop flights and if you do, these will be very expensive. Tickets can run anywhere from $700 to $1,700 so looking at different options can make a heck of difference. 
• Your best bet would be to purchase tickets with connecting flights.  

Step 3: Develop an Itinerary

• Know where you're going before you get there. I would recommend you read plenty of reviews before making your final lodging selection. 
• Do not just read reviews on the hotels, but also make sure you obtain some basic knowledge of the surrounding neighborhoods. 
• Do contact tour companies ahead of time and make sure that you ask all pertinent questions prior to arriving to the country. Read plenty of reviews prior to making any commitments. 

Step 4: Pack the Essentials

• Make sure you take a folder with important numbers. This should include the contact number for the nearest U.S. Embassy or Consulate in case you loose your travel documents or are faced with other emergencies. 
• Pack lightly to facilitate mobility and bring a lock to put on your luggage if you will be leaving it at the hotel room. 
• Leave your valuables behind. Do not bring flashy jewelry and watches. 

Step 5: Use Common Sense

• Contact credit card companies, banks, and other financial agencies prior to your trip to inform them of the dates you will be out of the country.
• Make sure you are always aware of your surroundings.
• Do not display your phone and other electronics in public places.
• Try to avoid displaying garments that indicate that you are a tourist. This includes hats and shirts with the American flag as well as items that say "I Love New York" or things of that nature. 
• Do not hand over your U.S. passport to anyone. Never. Ever. 

As you can see, planning ahead of time is of utmost importance when traveling overseas. You will find these tips useful for traveling to other parts of the world as well. Stay tune for tomorrow's post on must see places when traveling to Venezuela!

MLB: More Than Just a Ball Game

It is well known that players from the Caribbean and South America have made significant contributions to the game of baseball. What may come as a surprise to some is that Venezuelan players have made a huge presence in the last decade. Venezuela is now only second to the Dominican Republic as the country with the most foreign-born players in Major League Baseball!

Two of the most notable players are Miguel Cabrera and Felix Hernandez. Cabrera is a 10 time All-Star player who is currently leading the League in batting average and on-base percentage. Hernandez is a Cy Young Award winner who has been the most recent pitcher to pitch a perfect game.

Miguel Cabrera, 2015 All-Star Game

For many of these players, playing in the Majors goes way beyond living the American dream. It represents their only ticket out of a grim situation. They are torn between their dedication to a country that has given them an desirable opportunity, and the memories of a country that they could only hope return to one day.

These players left their families and homes to come to a country where they do not know the language or the people. Some have had to give up entirely on the idea of returning home due to safety issues in Venezuela and have had to relocate their whole families to the States.

Such is the case with  Wilson Ramos, a catcher for the Washington Nationals, who was kidnapped four years ago when he returned to his hometown in Santa Ines, Venezuela to visit his mother. He was released a week later after his family paid the ransom and he is now again part of the Nationals' lineup.

For many of the up and coming young talents, the chance to play professional baseball will never come. The delays in scheduling visa appointments have resulted in these prospects missing Spring Training and has forced the League to look elsewhere in order to maintain their tight schedules. The safety concerns have also kept away some of the scouts and baseball academies have decreased by 50 percent.

This represents another of the many roadblocks faced by talented young Venezuelans who are trying to find a new opportunity elsewhere.

Caracas Chronicles: Is Morality The Real Issue

A recent post in Caracas Chronicles, a blog on current Venezuelan issues, caught my attention. In his blog post, Sobremesa Chronicles, Juan Cristobal Nagel mentions that in his most recent trip to Caracas, Venezuela he was surprised to see that the biggest headlines were not the current economic and political issues faced by the country.

Instead, the talk of the town was that a rich business leader was throwing a lavish party at the exclusive Caracas Country Club where thousands gathered. Many young socialites were in attendance as well as three of the most well known and popular urban music artists in Venezuela. Nagel points out that like this party, there are many more held throughout Caracas by the rich. All of this while the majority of the Venezuelan people are struggling to feed their families.

He ends his blog by posing the following questions: Should the rich show a bit more restraint given the current state of the country? Is Venezuela's crisis more of a moral one than an economic one?

Although I too think it is quite distasteful for the wealthy and powerful people of the country to carry on with their parties and exhibition of wealth, I think they are not entirely to blame. The truth is that many of these executives made most of their money through very questionable practices which were applauded by the current government in exchange for bribes.

If people want to question someone's morals, it should be that of the Venezuelan government. The leaders have turned a blind eye to much of the corruption in the country and have facilitated the current situation. The attitude and lifestyle of the rich is another consequence of an immoral government that does not always live what it preaches.

Labor Laws: Wikipedia Updates

As you may recall, I recently made some additions to the Labor section of the Wikipedia page on the economy of Venezuela. I shared my updates with you in my June 16th post. Below, I am including my contribution once again for your convenience.

Labor disputes have continued to increase since the financial crisis in 2008. With inflation at over 56% and widespread shortages of basic goods, even the government has admitted that productivity is low. According to The World Economic Forum, Venezuela is ranked as 134th of the 148 countries for economic competitiveness. Many in the private sector attribute these findings to the inflexible labor market. 

In recent years, a barrage of pro-worker decrees have been passed. The most significant could be the 2012 labor laws known as the LOTTT. These laws included the virtual ban on dismissal, shorter work week, improved holidays, and enhanced maternity benefits. The LOTTT offers job security to most workers after the first month. Employers have reported an absenteeism rate of up to 40% which they blame on the leniency of these labor laws. As expected, employers have been less willing to recruit.  

On November 17, 2014, the President of the Republic issued a decree to increase the minimum salary for all workers by 15%. The decree became effective on December 1, 2014.

There have been no changes or additions made to my contributions. Nonetheless, since my original post, I did come across some additional information and decided to make further updates.

On April 28, 2015, as part of the May Day celebrations in honor of workers' day, president Nicolas Maduro announced an across-the-board increase of the minimum wage, which will rise by 20% as of May 1st and by 10% at the start of June.

This addition reflects the most recent wage increases set forth by the government. Unfortunately, these increases have not been enough to alleviate the pain of the working class in Venezuela.

Will Greece be the Next Venezuela?

I just wanted to follow up on my previous post on The New Reality where I described Venezuela's current food shortages.

Unless you have been living under a rock this week, you have already heard about the economic crisis in Greece. The images of empty shelves in supermarkets are eerily similar to those in Venezuela.



Supermarket in Athens, Greece

Supermarket in Caracas, Venezuela
 

The idea of these two countries facing the same fate is not so far fetched as some of you may think. The people of Greece are facing much uncertainty and are fearing the worst. In recent days, shoppers in Greece flocked to their local supermarkets and stripped them of essentials such as rice, flour, meats, cheese, and toilet paper. Sounds familiar?

President Nicolas Maduro took special interest in the recent vote against the Eurozone bailout and congratulated the people of Greece. He called the results a defeat against the "financial terrorism of the International Monetary Fund." Venezuela parted ways with the IMF back in 1998 when former president Hugo Chavez vowed to build an economy free of the imperialist government (the United States) and committed to social justice.

Let's just hope Greece's problems do not distract Maduro from focusing on resolving the issues within his country.

The President Gets a Mango In The Face

Just when everyone thought the situation in Venezuela couldn't get any more desperate, here comes Marleni Olivo.

She is a Venezuelan citizen who is now very well known in Venezuela, and perhaps by others who have viewed the hilarious video clip of her tossing a mango at president Nicolas Maduro. It is as funny and ridiculous as it sounds. 

For those of you who haven't come across this video yet, I am including it below for your convenience.

President Maduro was in town and many people were throwing letters detailing their particular needs. Marleni did not have paper at hand so she decided to do the next best thing; write her message on a ripe mango and throw it right at the president's caravan hitting him in the face. To add humor to the whole thing, "maduro" actually means "ripe" in Spanish.  

But, the burning question still remains... why a mango? Well, Venezuela has an overabundance of mangoes. People do not buy mangoes, instead, most people either get one from their backyard or get one from the neighbor's backyard. 

Surprisingly, Marleni was not detained or removed from the crowd. Instead, the president held on to the mango and called her later on in the afternoon to find out that what she needed was an apartment. He also mentioned her in his evening live broadcast and announced that she indeed would get an apartment within a few hours. 

Marleni is a woman who was bold enough to take a chance and think outside the box and in this instance it paid off big time. She made good use of the only produce that is not in shortage and she got what most can only desire. Way to go Marleni! 

Warning: I do not suggest you try this at home.

Independence Day

After a weekend full of hot dogs, fireworks and all that is red, white and blue, we are all trying to get back to the hustle and bustle of a new work week.

What you probably didn't know was that Venezuela also celebrated its independence this weekend on Sunday, July 5th. Venezuela gained its independence from Spain in 1811, making it the first South American country to do so.

The celebration marking the Venezuelans' freedom did not go unnoticed by the United States. Please cliick on the link below to see a brief message from John Kerry, Secretary of State, On Venezuela's Independence Day  congratulating the Venezuelan government on their day: message from John Kerry

The message is uncharacteristically diplomatic and a bit cynical. In his short message, Kerry describes the tie between both countries as friendly, and one that is binded by similar cultures and commerce. He also goes on to remind the government that both nations were "built on the same ideals of freedom, equality, justice, and democracy." 

This is a very different tune from the one sung just a few months ago when the Unites States declared that Venezuela was a national security threat. Ever since, the tension between both countries continues to grow.

This new message may signal a turn for the better in the relationship between both countries, or it could just be politics as usual. We will just have to wait and see.

The Airlines Crisis

Yesterday, Jet Blue announced that they would be imposing a fee for the first checked bag. This makes them one of the few remaining airlines to take this step.

With the mediocre service and the shrinking space provided, it is not entirely surprising that customers are less than amused. If gas prices have been decreasing for months, shouldn't airlines be saving enough money to provide customers with discounts?

The answer is mostly No.

Airlines such as Jet Blue have a lot of pressure from stockholders who want to see the revenues increase every quarter. This has been a daunting task for many airlines that offer international flights in countries with struggling economies.

Such is the case with pretty much every international airline in Venezuela. With the government's tight grip on the economy and the currency exchange, many airlines have had no option, but to cut down on flights while other airlines have closed their gates and left the country. The truth is that these airlines are not making much profit and some are even at a loss.



Maiquetia "Simon Bolivar" International Airport - Caracas, VE

The decreasing flight options have created a nightmare for Venezuelan customers who are having a very hard time finding available seats on flights. As expected, with a higher demand and a shorter supply, the flights that are available will cost an arm and a leg which is not something that most Venezuelans can afford.

The elite class of Venezuela, who are frequently traveling to Miami, have resorted to paying for private charter flights. The aforementioned option is an impossibility for the average Venezuelan.

This is an unintended consequence of a government that has taken measures to help the poor people, but by doing so, have inadvertently put them at a greater disadvantage.

Gringo Go Home!

On June 2012, I took a trip to Venezuela for the first time in over 10 years. My husband and I were questioned and searched multiple times when we arrived on Venezuelan soil. In addition, our American passports were carefully scrutinized. Upon exiting the airport, the humidity and hot sun made everything feel so familiar.

However, during my car ride from the airport, I was able to appreciate how much the country had really changed. The streets of Venezuela were full of writings, some of it promoting the government's Misiones social program, and some were expressing anti-American ideals. There was one particular mural that caught my attention and I just had to snap a picture.

 

Mural in Caracas, Venezuela - June 26, 2012
 

The mural shows an American eagle with a scroll that read "GRINGO GO HOME" which in lay terms means: Americans, leave our country. One can also see what appears to be fists of the Venezuelan people up as a signal of protest against the eagle that is coming to attack them.

This picture pretty much summarizes the sentiments of many Venezuelans. For many years, president Hugo Chavez instilled into the people of Venezuela that America is an evil empire that is trying to take over the world and invade the country. The anti-American attitude has grown in the last 15 years and it continues to grow under president Maduro.

In a March 2007 rally in Argentina, president Hugo Chavez perfectly summarized the reasons behind his demise of the American presence in Latin America. If you would like to get a better understanding of what "gringo go home" represents to the Venezuelan people, feel free to see an excerpt of his speech in the following link: Hugo Chavez Rally in Argentina 2007.

There is definitely some irony to this outlook as Venezuela continues to be one of the largest suppliers of oil to the United States and most of its products are imported from America.

Venezuela: Murder Capital of the World

In the past 15 years, Venezuela has reached an alarming murder rate.

It is estimated that as many as 82 people are murdered for every 100,000. It cannot be denied that since Hugo Chavez took power, crime has skyrocketed in Venezuela, and it continues to rapidly rise under Nicholas Maduro. At first glance, one could easily blame the current economic situation for elevated murder rates, but the truth is that the issues go beyond that.

Reason # 1
Venezuela is one of the most weaponized countries in the world where it is estimated that there is one gun for every two people. Most of the guns are believed to be supplied by the Colombian guerrilla via the border. This continues to be the case even after the Venezuelan government launched a national campaign to encourage people the voluntarily surrender their firearms. As expected, most people in the country did no such thing. 

Reason # 2
In addition, the police force has its hands tied. Most police officers are making close to the minimum wage with very little back up and at times, no proper weapons. Since cops do not feel protected by the government, many of them get their protection from the criminals. By turning a blind eye to crime, these police officers are spared their life and their family's life. 
 
Reason # 3
Sadly, more than 90 percent of the murders in Venezuela go without an indictment. Since criminals know that crimes are seldom resolved, they feel that they have the liberty to roam the streets freely. Kidnappings in broad daylight have become a daily bread. Many of these kidnappers have connections with the police force. The system is simple: pay a ransom or your loved one gets killed. Most of these kidnappings occur in the capital and they usually target the middle class. The elite are usually not the main target because they can afford to have more security which makes it harder for a successful kidnapping to take place.

If the murder rate continues to rise, the government will soon have no choice, but to launch an initiative that actually addresses the real issues.

The Generation Gap

On February 2014, large protests were organized across the major cities in Venezuela. These protests were led by Leopoldo Lopez, a Harvard educated political leader who has since been incarcerated for his role in the protests. Hundred of people were injured and dozens were killed.

February 2014 protests in Caracas, Venezuela

Most of the protesters consisted of college students and leaders of the Table for Democratic Unity. Many of them are law students and future engineers that have been consumed with a sense of frustration due to the grim economic panorama. Being born in the early 90s, the only thing these young people have known is the Venezuela of Hugo Chavez and his socialist ideals.

On the other hand, many of the older folks grew up knowing the Venezuela of the 60s, 70s, and 80s. The February that is still present in their minds is that of 1989. This marked the time of Caracazo where the working people of Venezuela (young and old) spilled out to the streets to denounced the democratic government led by president Carlos Andres Perez. Thousands of protesters were killed. 

February 1989 protests in Caracas, Venezuela

Don't get me wrong—the older generation of Venezuelans are just as unhappy with the current economic state of the country as the young people, but they are also reluctant to elect a democratic leader that may bring back some of the grievances of the late 80s. They do not want to elect a leader that is once again going to set forth measures to undermine the working class. In essence, they are going to vote for the leader, who in their mind, represents the lesser evil. 

How Hard Is It To Obtain a U.S. Visa?

With the economic and political unrest, many ask themselves, why people don't just leave Venezuela? Well, it is much easier said than done. The truth is that many Venezuelan citizens want to leave the country at this point, but this is an impossibility for most. There are just a few avenues by which one can get that coveted U.S. visa and there are only two types of visas.

• Non-Immigrant Visas: allows you to travel to the U.S. as a temporary visitor. Temporary is the key word here because you are only allowed to stay in the U.S. for a maximum of 3 months. 
• Immigrant Visas: allows you to travel to the U.S. and apply for legal permanent residence. This is the ultimate golden ticket which allows you to legally live in the U.S., be legally employed, and eventually become a U.S. citizen.

You can apply for a non-immigrant visa:

• If you are traveling for pleasure
• If you are traveling for study
• If you are part of an exchange program such as the Fulbright Program

The truth is that it is highly unlikely that your non-immigrant visa will be approved. The reason for this is that many people who travel to the U.S. with a temporary visa have never returned and have decided to stay in the United States illegally. You would need to provide proof that you have substantial investments (such as property and fat bank accounts) in Venezuela which would make you more likely to return. Students will need to show that they have the means to pay for their education before getting an approval.

You can apply for an immigrant visa:

• If you have a family relationship (including spouse) with a U.S. citizen or legal permanent resident
• If you are sponsored by an employer
• If you are selected in the Diversity Visa Program (visa lottery)

Even if you are one of the lucky Venezuelans who has been petitioned by a U.S. family member, don't pack your bags just yet! With the recent tensions between the U.S. and Venezuela, visa requests are so backed up that it is normal for a Venezuelan visa request to be processed in 7-10 years.

The majority of Venezuelans have been given no alternative, but to wait out the economic storm.

 

Where Have These Four Venezuelan Dishes Gone?

If it was not already obvious from previous posts, the economic crisis in Venezuela has greatly affected all aspects of the Venezuelan life. Venezuelan cuisine is no exception to this.

One of the main ingredients in virtually every traditional Venezuelan dish is the pre-cooked white corn flour that is better known in Venezuela as Harina PAN, which is the name of the most popular brand of this staple. Due to recent shortages and the almost 218% increase in corn prices (yes, you read that right), this product has become almost impossible to find in the supermarkets of Venezuela. For now, Venezuelans will have to live with the reality of a Venezuela without Harina PAN. For those that are curious about some of these dishes, I am including four of the most popular Venezuelan dishes made with Harina PAN.



1. Arepas: These are traditional corn cakes. These salty cakes can be accompanied with butter, cheese, black beans, shredded meat, shredded chicken, etc. Arepas can be fried, grilled, or baked. Due to its versatility, arepas are consumed for breakfast, lunch, and/or dinner. 
2. Bollitos: This is a go-to food when one is pressed for time. Unlike with arepas, bollitos consist of boiling the corn-flour dough. Bollitos are traditionally served during breakfast time with scrambled eggs and shredded cheese.  
3. Hallacas: These are very similar to the Mexican tamales with the exception that they are prepared with Harina PAN. Since this popular Venezuelan dish usually requires a very long prep time and consist of many ingredients, this dish is mainly prepared during Christmas time. 
4. Empanadas: You can think of these as hot pockets or calzones made with Harina PAN. As with arepas, these can be filled with virtually any leftovers from last nights dinner, but Venezuelans especially like them with cheese and  shredded chicken. They are usually served as appetizers, but can also be served for dinner depending on the filling. 



Arepas



Bollitos



Hallacas

Empanadas
 

 

These dishes were very inexpensive and fulfilling options for the working class people of the country. One could only hope that these items can once again be enjoyed by all Venezuelans in the near future.

You're Welcome Wikipedia: Venezuela's Labor Laws

The Wikipedia entry titled "Economy of Venezuela" gives the history and an overview of the sectors related to the economic structure of the country. For your convenience, I am including a link to the Wikipedia entry:  https://en.wikipedia.org/wiki/Economy_of_Venezuela#Labor

The section in this entry titled "Labor" provided the following information:

Under Chávez, Venezuela has also instituted worker-run "co-management" initiatives in which workers' councils play a key role in the management of a plant or factory. In experimental co-managed enterprises, such as the state-owned Alcasa factory, workers develop budgets and elect both managers and departmental delegates who work together with company executives on technical issues related to production.

In November 2010, following the expropriation of U.S. bottle-maker Owens-Illinois, workers spent a week protesting outside factories in Valera and Valencia.

Given the recent developments in the economic condition of the country, it was quite difficult for me to understand why the last information entered was from 2010. This section was begging for an update and so I decided to make a short addition to this Wikipedia entry. Below is my contribution to the "Labor" section of the "Economy of Venezuela" Wikipedia entry.

Labor disputes have continued to increase since the financial crisis in 2008. With inflation at over 56% and widespread shortages of basic goods, even the government has admitted that productivity is low. According to The World Economic Forum, Venezuela is ranked as 134th of the 148 countries for economic competitiveness. Many in the private sector attribute these findings to the inflexible labor market. 

In recent years, a barrage of pro-worker decrees have been passed. The most significant could be the 2012 labor laws known as the LOTTT. These laws included the virtual ban on dismissal, shorter work week, improved holidays, and enhanced maternity benefits. The LOTTT offers job security to most workers after the first month. Employers have reported an absenteeism rate of up to 40% which they blame on the leniency of these labor laws. As expected, employers have been less willing to recruit.  

On November 17, 2014, the President of the Republic issued a decree to increase the minimum salary for all workers by 15%. The decree became effective on December 1, 2014. 

As you can see, I added some of the recent labor laws that have contributed to the current state of the labor market. It is important not only to know what is going on in this sector, but also to have an understanding of when these laws came to be and how the same have affected employers and employees alike.

Socialism of the 21st Century

Contrary to popular belief, Venezuela is not a synonym for Communism or Dictatorship. Many media outlets have used these terms loosely when referring to the Venezuelan government.

Revolution is PEACE

Inside the Revolution: A Journey into the Heart of Venezuela (Pablo Navarette, director, Alborada Films, 2009) is a short documentary that not only tries to dismiss some of these misconceptions, but also paints a clear picture of how the country went from being democratic to becoming socialist.

In 1958, the democratic regime took over. At the end of the oil boom of the 1970s the country started to enter into a crisis and the standards of living diminished drastically. Carlos Andres Perez was elected president in 1989 and soon thereafter he presented new economic measures which included an internal increase in oil prices. This resulted in an increase in prices of goods and services.

Caracazo - February 27, 1989

The people of Venezuela became very unhappy during this time and many protests were organized throughout the country. Thousands of people were killed by the government as a result of the rise in protest--now known as the Caracazo.

An army leader, Hugo Chavez, led a failed coup in 1992 against the democratic government. As a result of his participation in the coup, he was incarcerated for over 2 years where he formed a political party and ran for election.

On Dec 6, 1998 he won with more than 56% of the vote. During the democratic regime, 3% of the country's population controlled 70% of the country's land. Chavez started to change all of that when he passed a series of laws in 2001 which included the elimination of larger estates and oil sovereignty.

By 2003, poverty was down by 53% and government spending had more than tripled. In 2005, Chavez officially announced his 21st century socialism. He made it clear that this was a new socialism and should not be compared with the Soviet Union. He managed to convince people that the leaders of the new socialism would be the people and that this new socialism would bring freedom from capitalism.

As detailed by the film, most of Hugo Chavez's supporters were those that live in the barrios, the poor neighborhoods. Many respected him because they felt that he was able to relate to the struggle of the poor and wanted to give them what they always lacked such as education and land.

The film also included exclusive interviews with some of the revolutionary youth groups in Venezuela. They expressed that before Chavez, youth were not interested in politics, but he ignited an interest in the youth of Venezuela to discover its history and culture. He also taught them that politics could be a powerful weapon.

This film gave a very thorough representation of how the country became socialist and why many people of Venezuela, although not happy with the current government, would not want to have a democratic government that resembles the one they experienced in the 1980s. It is very difficult to find a documentary on Venezuela that is not propaganda, but this film gives viewers a clear understanding of why Venezuelans came to accept socialism and why many still hold on to its ideals today.

The Blame Game

As the whole world is watching, it has become evident that Venezuela's economy is rapidly crumbling. But a question still remains, who is to blame? The answer to this question will all depend on who you ask.

Many Chavistas (supporters of former president Hugo Chavez and his policies) will say that it is an economic warfare from the opposition party. Others will blatantly blame the United States and other governments that are controlling oil prices. There are also some that blame the current socialist government and its failing economic policies.

Although there are many factors that have played a role in Venezuela's declining economy, it has become clear that the current government policies are to blame.

During Hugo Chavez's regime, the private sector faced stricter government regulations forcing them to cut back on production. New policies also gave way to a more powerful executive branch of government with very little checks and balances. This allowed the government to nationalize many of the services that had once been controlled by the private sector.

Unlike other members of the OPEC, Venezuela did not take advantage of the oil price boom in 2009 to accumulate surplus. Instead, it utilized the revenues towards fiscal stimuli such as lowering taxes, providing subsidies to low income families, and signing multi-million dollar contracts with local firms. This overspending was not done as a mere act of kindness towards the poor, but as a way to secure the electoral votes for the next elections.

The Venezuelan government has overstepped its boundaries through excessive intervention in the economy. These policies have put them between a rock and a hard place. Reducing spending is not an option for a government that needs votes; nationalized firms are in such bad shape that there are not many interested buyers; increasing oil prices locally would hurt low income supporters; and shortages will continue indefinitely if the the government continues to reduce imports.

It will be interesting to see if the current economic crisis will force the government to rethink some of its economic policies.

The New Reality

Many people do not realize the extent of the economic issues in Venezuela. It has one of the world's  largest petroleum reserves and 96% of its export revenues depend on it. When the international oil prices were at an all-time high, Venezuela was able to use the added revenues to develop "Misiones". Misiones are social programs established under Hugo Chavez which involved building houses, improving roads, healthcare, and education. With the recent decline in oil prices, the revenues have dried up and the economy has suffered.

Since the death of the former president Hugo Chavez in March 2013, the country's economy has continued to spiral out of control. His successor, Nicolas Maduro, has implemented stricter government regulations which have been detrimental for the people of Venezuela and especially for those in the lower class. Although the unemployment rate is less than 8%, more than a third of the country is living under the poverty line. To many, these are just statistics, but to the people of Venezuela, it has very serious implications.

It has been increasingly difficult for Venezuelan citizens to purchase basic products such as shampoo, soap, toilet paper, oil, and milk. The government has responded to the shortages and the ridiculously long lines by restricting the day in which people can make purchases at supermarkets to once or twice a week. The day that one is allowed to step foot into a supermarket is determined by the individual's last number on the Venezuelan identification card. In some of the more populated regions, individuals are required to provide fingerprints. As one could imagine, this creates a very long wait at the register.

In addition, the most sought out items, such as milk and chicken, are being rationed and offered in bundles. In order to purchase milk, you must also purchase juice, etc. This can become quite a problem for those who do not have enough money to buy the bundles as they will have to go without these essential items.

Unfortunately, the poor people of Venezuela have been the most affected by this new reality for which an end does not seem near.

Welcome to Venezuelan Economy Today!

I was born in Caracas, Venezuela to a Colombian mother and a Dominican father. My parents met and got married in Venezuela after escaping the economic and political unrest in their own countries. They migrated to Venezuela in the late 1970s when Venezuela's economy was booming and there were jobs-a-plenty. In the mid to late 80's, the Venezuelan economy started to shift for the worse and my parents (along with many others) decided to migrate yet again to an unknown land—America.

In recent times Venezuela has experienced an economic crisis that is far from any it has experienced before. The inflation rate is one of the highest in the world, there are supply shortages throughout the country, and tourism has declined drastically. These changes are usually analyzed from a macroeconomic view, but rarely is it examined from the point of view of the individuals and the smaller companies.

In this blog I want to emphasize on the ways these recent economic policies have reshaped the lives of some people in Venezuela as well as showcase the daily struggles that have become a norm for Venezuelan citizens. In addition, I hope to uncover how the country's current economy affects those families that are now living overseas.

I hope this blog will allow you to acquire a better understanding of the country and its unique economic issues.