El Universal reported that a decline in revenue from oil sales caused imports into Venezuela to drop by 49% during the first six months of 2009. Despite a recent increase the value of petroleum, Venezuela has experienced a sharp reduction in available funds since the price of a barrel of oil is just over $65, about half of the peak price in 2008.
More specifically, the newspaper article explains that there has been a dramatic drop in the foreign currency available to a wide variety of sectors. For example, the decline in monies was measured at 78% in telecommunications, 54% in machines and equipment, and 35% in the health sector.
The impact on such a strong consumer country as Venezuela is clear – it is now more difficult to purchase foreign goods that remain in high demand. During my travel through the airport in April I was surprised to see a duty free store whose shelves were completely bare of perfumes and other beauty products. In part, this was due to the fact that given its financial limitations, the Venezuelan government required many businesses to purchase products from overseas at the official exchange rate, set at 2.15 Bolivars Fuertes (BsF) to the Dollar. This creates a tremendous disincentive for stores making purchases, as consumers holding foreign currency can trade it on the parallel market and receive more than two times that amount per dollar. The rate for a dollar has remained above 6 BsF for months, and only recently dropped to around 5.5 BsF.
Not all imports are captured by official statistics. During my travel home to the United States during the holidays, I received requests from friends to bring them back tech products, ranging from a laptop, to an iPod, to a fashionable Blackberry Pearl. This situation is not uncommon, as Venezuelans who have relatives traveling overseas often make similar requests for consumer goods. It makes me think of the fact that people, referred to as “mules”, are used to illegally transport cocaine northwards to the United States and Europe. Could we say that there are also “technology mules” traveling in the opposite direction, returning to Latin America with the latest cameras, phones and computers?
