Erick Ojeda faces financial strain as he returns nearly empty-handed from a nighttime shrimp fishing trip in Maracaibo, Venezuela. His sister and newborn are waiting at the hospital, but he struggles to find transportation. Meanwhile, the fishing community confronts economic hardships amid Venezuela’s evolving crisis, which recently intensified, further diminishing purchasing power and edging towards recession. President Nicolás Maduro has declared an “economic emergency” in response.
Persistent and undeterred by fatigue and hunger, the fishermen continue their work under the shadow of Maracaibo Lake’s oil tankers. Despite unreliable income, Ojeda, like many others, holds onto hope for a better future for Venezuela. The nation’s economy is once again faltering as oil revenues dwindle due to renewed economic sanctions imposed on Maduro’s government, accused of electoral fraud. The administration faces limited options, even after experiencing a period of stability following the pandemic.
Post-pandemic, Venezuelans saw a turnaround with fully stocked supermarkets and the U.S. dollar becoming the dominant currency for daily transactions. This shift resulted from relaxed government controls on basic goods and allowed the use of dollars without restrictions. As a consequence, hyperinflation, which peaked at 130,000% in 2018, was curtailed, and the GDP grew by 8% in 2022.
Despite the economic renewal in Caracas, other regions, including Maracaibo, experienced little gain. In the capital, the rise of import stores, restaurants, and service apps marked economic revival, but Maracaibo’s commercial activity, especially on major avenues, was subdued. Many businesses remained closed, highlighting the uneven distribution of economic growth.
The U.S. dollar has long served as a safe haven for Venezuelans, gauging economic health through exchange rates. Government measures to artificially suppress the exchange rate led to increased foreign currency transactions. However, the market’s reliance on government interventions, including cash reserves, became unsustainable, leading to significant exchange rate disparities between official and black markets.
Recently, the official exchange rate hit 70 bolivars per dollar, while the black market reached 100 bolivars, exacerbated by political developments, including Maduro’s controversial re-election and changes in U.S. policy affecting Chevron’s operations in Venezuela.
Formal and informal markets now favor the more expensive black market rate, rendering some goods unaffordable. Inflation rates between 180% and 200% are predicted, as businesses struggle to adjust pricing, and economic conditions hinder hiring.
The Societal Shift
The economic challenges facing Venezuela have profound implications for its citizens. As inflation rises, everyday goods become less affordable, straining household budgets and forcing consumers to make difficult choices. The disparity between official and black market exchange rates further complicates financial planning, leading to uncertainty and instability in daily life.
Employment opportunities shrink as businesses halt hiring, compelling many to seek additional jobs to supplement stagnant wages. However, the scarcity of available positions and the shift toward payment in bolivars complicate efforts to maintain financial security. The economic environment limits not only individual advancement but also stifles broader community growth and development.
Across Venezuela, the uneven distribution of economic gains exacerbates regional inequalities. While some areas may enjoy the benefits of renewed commercial activity, others, like Maracaibo, struggle to keep pace. This disparity highlights the challenges of implementing policies that equitably uplift all sectors of society, underscoring the need for targeted measures to address and bridge these gaps.