The Scavenging Economy - an eyewitness account of the situation in Venezuela.

“Caracas, come and get your coffee candy to sweeten your day! One for fifteen thousand, three for a dollar!” cried the peddler in the crowded subway.

It sounds odd to hear prices openly quoted in dollars in the capital of Venezuela, a country that has accused the United States on numerous occasions of economic warfare, and which Nicolás Maduro called it the “criminal dollar” that was wreaking havoc on its economy.

After a fifteen-minute subway ride towards the city centre, I got off to buy some groceries. I carried five thousand in low-denomination Bolivares Soberanos (at the time of writing, about $0.10) to pay for incidental bus rides and the subway ride across the city, which turned out to be unnecessary: as it is often nowadays, the subway was free. I also carried about $45 in dollars to buy groceries for the holidays, which, if spent strategically, are enough to buy a week’s worth of food for a family of five.

I entered a small grocery store right across the street from federal government offices. In stark contrast to previous years, the shelves were stocked with local and imported goods: rows and rows of toilet paper, napkins, cornmeal, cleaning products, cereal, canned goods, and much more. This was not a fancy deli with wood boards, or an import-export warehouse: plain walls, casual staff, a few blocks away from a major public market. Next to the entrance, a posted sign indicated the current exchange rate. And the prices in Bolivars, if converted, would not be far off to those that you can find in American supermarkets.

The same situation can be seen all over: from roadside farmer’s markets, to convenience stores, to restaurants, to private supermarkets, even on street peddlers. The Venezuelan economy is de-facto dollarized, and its prices are approaching those found abroad.

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The year 2019 began with major political turmoil in Venezuela: in January, Nicolás Maduro was sworn in for a second term after a disputed election, prompting the legislative National Assembly to declare Maduro unfit and naming federal deputy Juan Guaidó as Acting President. This brought a constitutional crisis that has gripped the political landscape of the nation, and spilled over to a diplomatic confrontation, with most American and OECD countries siding with Guaidó’s government, and Russia, China, Iran, and South Africa supporting Maduro. Throughout the year, rampant inflation, rolling blackouts, economic sanctions and the collapse of the oil industry have battered the weakened economy.

At the same time, an influx of dollars through remittances, smuggling, and the ever-growing black market for goods and services led to widespread use of the dollar in many transactions: as a stable, widely-accepted currency, it became the currency of choice for most trade and de facto the currency of the nation outside of official institutions. The presence of a stable currency, coupled with quietly relaxing price and currency controls have led to an improved economic outcome, at least on the surface. Unless you are paying in Petros, Maduro’s new cryptocurrency, gone are the days of long queues in supermarkets to buy rationed goods at government-set prices, and instead, Venezuelans get a taste of the American tradition of Black Friday.

This velvet economic package gives a necessary boost to Venezuelan business, but it substantially increases the cost of living, especially for those that depend on pensions or minimum wage, which at the time of writing amounts to 150,000 BsS, or just above three dollars a month. Economic output still lags behind, and Venezuela is dependent on imports to supply its population with basic goods, including food. Many Venezuelans are stuck between not having enough to afford goods, and not being able to find better jobs.

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As I walked down the street, on the lookout to buy pernil at a good price, I encountered rows upon rows of street hawkers, whose assorted wares ranged from shoes to telephones. These are not bachaqueros, the infamous resellers of subsidized goods; these are Venezuelans selling second-hand belongings, often to finance their upcoming migration out of the country. Close by, a group of youngsters were begging for alms and rummaging through a garbage pile, as they cracked jokes to each other. Since the national economy went downhill, food scarcity has been on the rise, forcing many Venezuelans, even those with full-time jobs, to supplement their nutrition by sifting through garbage to find edible bits for them and their families.

Chronic undernourishment runs rampant. Eight out of ten Venezuelans are unable to afford animal protein. Government-issued food via the Local Committees for Supply and Production, or CLAP by their Spanish acronym, are a necessary staple for many Venezuelans who are unable to afford food.

While affordability is the limiting factor for groceries and many other goods, availability limits goods such as fuel and utilities. Gasoline is heavily subsidized to the point of being priced under the level of the lowest bill denomination, and for the lucky motorists that are able to find functioning, stocked gas pumps, filling up a gas tank costs less than an American penny. In lieu of cash, many motorists barter with cigars or even food items, and some don't even pay at all.

In areas outside the capital, gas is even scarcer; rationing has led to week-long gas queues in some areas and, more importantly, a breakdown of agricultural production and distribution, halving domestic agricultural output in the last year.

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I made my way back home and, luckily, I still had running water. On a good week, we get water three days out of seven, but it has been up five days now. Many others are not as fortunate. We keep a week's worth of water in tubs and buckets, just in case.

Access to running water is occasional in the capital, but scarce or non-existent everywhere else: Water availability has dropped 60% from 1999 levels, and residents have been forced to rely on streams and private wells for years now, as piped water gets rationed, and water tank trucks become unaffordable. Adding this to the collapse of the healthcare sector has resulted in an uptick of water-borne and vector-borne diseases in both urban and rural areas in Venezuela.

Along with the water crisis, Venezuelans have suffered from multiple nationwide blackouts throughout the year. As previously mentioned, these dramatically worsened the precarious economic situation, especially water and gas availability, and served as catalysts of the transition towards dollars.

Perhaps the clearest example of the general collapse of services can be seen in the city of Maracaibo: once a bustling port city and the capital of the Venezuelan oil industry, it has been reduced to veritable anarchy. Constant power outages break appliances and spoil refrigerated food, forcing many to buy generators or bribe their way through. Water scarcity forces residents to dig wells or procure water from polluted sources. Gangs of looters roam the city, sacking business and homes for food and valuables, and some are particularly violent about it. Not even death offers respite from scarcity, as hospitals, morgues, and cemeteries are overwhelmed and undersupplied.

The rest of Zulia state is faring even worse than the city. Lake Maracaibo is no stranger to pollution, but the collapse of the oil industry has led to a permanent black tide as the rusting pipelines and crumbling derricks leak crude oil into the lake, and looters scavenge what remains of the oil infrastructure, greatly affecting the wildlife and people who call the lake their home. There are no environmental recovery efforts in place to restore the ecosystem, or even to protect it from further decline.

A harrowing picture emerges, a picture chronicled by domestic and foreign photographers over many years of a humanitarian emergency that is often overshadowed by politics. In rural communities, barter has become the preferred means of exchange, as cash is both devalued and hard to come by. Foreign reporters openly wonder if Venezuela can be saved.

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I poured myself a Rum and Coke, courtesy of an old bottle left behind by family members who emigrated. It was a long day.