Maduro Picks Surprising Tool To Level Out Venezuela's Tailspin: Capitalism
LULU GARCIA-NAVARRO, HOST:
Crowded shopping malls selling electronics, throbbing nightlife, artisanal chocolate - these are not headlines you'd expect to hear out of Venezuela. For years, the news has been about empty shelves, desperate hunger and mass migration. Now the government of socialist president Nicolas Maduro is turning to some capitalist measures to try and salvage the wrecked economy, and that's easing pressure on at least some of the population.
NPR's Philip Reeves is in Caracas, and he joins me now. Hi, Phil.
PHILIP REEVES, BYLINE: Hi.
GARCIA-NAVARRO: All right. Describe what you've been seeing.
REEVES: Well, there are clear signs that for part of this city, the economy is picking up. I went to a shopping mall. It was pretty busy. People are beginning to spend money on clothes, electronics. There's always been money in this town, as you know. But we're seeing much more of it come out into the streets now, at least in the middle-class and rich areas and the business areas. Fancy restaurants are back in business, and they're booming. I went to one of those, too. Here's what it sounded like shortly before midnight.
(SOUNDBITE OF RESTAURANT AMBIENCE)
REEVES: As you can hear, there are plenty of clients enjoying fine wines, eating seafood. Outside, there are all these big, new, gleaming imported SUVs being valet-parked. You see quite a few of those around town now, also.
GARCIA-NAVARRO: I mean, this is an extraordinary change because it wasn't so long ago that Caracas was paralyzed economically. Why is this happening?
REEVES: Well, people had to use before the national currency, the Bolivar, and it's completely collapsed. It's destroyed by hyperinflation that at some points went into the millions. The Maduro government, some months back, began allowing people, therefore, to use dollars. At least 4 million people left the country to work elsewhere in the region. They send 3.5- to $4 billion back every year to the families here to help them get by. Those families can now spend those remittances as dollars here.
And there's one other important thing, Lulu, which is that - and it's not exactly in line with the ideology of the socialist revolution of Hugo Chavez. Maduro has kind of formed a partnership with the private sector, and he's greatly relaxed important export controls. Big question is, how long will it last? Maduro's government's planning to tax dollar transactions soon by up to 25%, so that may collapse this minibubble.
GARCIA-NAVARRO: What about the Venezuelans who don't have access to dollars?
REEVES: Well, that's a very important question because conditions for them are still terrible. They're feeling the effect of the worst economic collapse in this part of the world in modern history. Health services pretty much nonexistent. There is a dire shortage of medicine. There is shortage of drinking water. Power outages happen all the time. And many of them are just focused on the struggle to survive. And now they're at the wrong end of a growing wealth gap.
GARCIA-NAVARRO: Phil, do you get a sense of the long-term future of Venezuela?
REEVES: It's difficult to know what's going to happen. I mean, Maduro does have some important international allies, notably the Russians. Opposition leader Juan Guaido has been on a world tour. He showed up in Washington the other day, where he was feted. At the same time, Russia's foreign minister, Sergey Lavrov, was here this week, talking up Moscow's relationship with Caracas. The Russian oil giant Rosneft has played a key role in helping Maduro sell Venezuelan oil after the U.S. imposed sanctions on it last year. And oil production here appears to have kind of pulled out of its nosedive and stabilized, although it's a lot less than it used to be. So, you know, Maduro has so far found ways of getting by, but he's still in a very dire economic crisis. And his position is not a strong one by any means.
GARCIA-NAVARRO: That is NPR's Philip Reeves in Caracas. Thank you so much.
REEVES: You're welcome. Transcript provided by NPR, Copyright NPR.