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Cashing in on Venezuela's crisis

Monday 5th May 2014

Going to Venezuela was a touch and go decision. Some friends warned us against going. Traveller forum opinion was divided.

Protests against the government were turning violent. People were being killed. Three United States diplomats and journalists from CNN were getting kicked out, accused of plotting to overthrow the government.

My wife and I were volunteering in a small charity run school in Santa Marta, Colombia. We’d planned a two-week break in Venezuela but shortened our trip to four days as we learned about the deteriorating security situation.

 Photo Gallery - Unrest in Venezuela

Travel advisories be damned, we decided. The chance to get fresh passport stamps, see an economy on its knees, and change money on the black market was too much to pass up.

But we were nervous crossing the border. We’d heard that guards were requiring extra documentation from US, British and Australian citizens that we didn’t have: onward flights and masses of hotel reservations. Our hope was that they’d think New Zealand was some quaint European fiefdom, rather than part of the capitalist axis of evil.

Locals gave us lots of warnings and advice: don't speak English on the streets, use your camera discretely and never, ever, show that you have foreign currency.

In fact our passports were stamped without so much as a raised eyebrow. After a small bribe to customs coordinated by our bus driver, we crossed the frontier.

On the Venezuelan side of the border, hulking American cars from the ‘70s and ‘80s plied the streets with a humdrum that would make any boy racer proud. The country is struggling with trade restrictions, but its subsidised petrol means these giants are still rolling.

Darkness means danger in Venezuela. A local non-government group estimates 24,000 people were murdered there last year and it has been called the most dangerous country in Latin America. Despite the balmy Caribbean temperature there was little foot traffic and few families enjoying the cooler night air on the patio, as they would be a 100km down the road in Colombia.

The foreboding wasn’t helped by our bus driver’s choice of movie for the trip on to Maracaibo. We were watching Captain Phillips, the Tom Hanks film about pirates on a highway that had seen its fair share of kidnappings. At least the dubbed soundtrack was turned respectfully down when our travel was punctuated by military checkpoints.

The locals talked about danger like we might talk about the weather at home: constantly and in every conversation. Locals gave us lots of warnings and advice: don't speak English on the streets, use your camera discretely and never, ever, show that you have foreign currency. They themselves are careful about where they go and when. You don't go outside at night or on Sundays when there is less foot traffic making you more vulnerable.

Settled in a hotel room, our first challenge was to get some Venezuelan cash to add to the little we’d sourced in Colombia. That’s harder than it sounds. Venezuela’s official exchange rate is managed by its government, not floating like the New Zealand or US dollar. This official exchange rate is the one you’d be using if you stumped up to an ATM or paid a bill with a credit card. Right now one US dollar is about 6.3 bolivars. At that rate, Venezuela is among the most expensive countries in the world to travel in. But if you change money on the black market you’ll get at least 10 times more.

We asked around to see who might want to change with us. We’d assumed that anyone in the tourist industry would be able to point us in the right direction. Hotel receptionists, taxi drivers and bar tenders all knew that you could but no one knew how. That’s probably a testament to the dwindling tourist population in Venezuela, rather than how unusual our request was. They all encouraged us to keep looking but to be careful who we talked to. After all, it is illegal, they stressed.

As he left we had only his hope of repeat business to rely on to bring him back with our cash.

In the end a more tourist-oriented hotel in a pretty colonial town was able to hook us up. They made a call and a while later a friendly, middle-aged man turned up with a plaid shirt and a pocket calculator. After hand shakes and chit chat we talked exchange rate. The rate was volatile, he said, because no one could interpret what would happen next with the growing protest movement against the government.

A little friendly to-and-fro later we settled on a rate that seemed good to us, but was probably less than we deserved. He took our $US80 and promised to return with Venezuelan bolivars soon. As he left we had only his hope of repeat business to rely on to bring him back with our cash. When he did come we counted notes with astonishment. We’d won the geopolitical lottery.

Coming from Colombia we were used to cheap. Travel there is about three times cheaper than at home. But travel in Venezuela was about three times cheaper again. Putting that together, if you’ve black market cash, travel in Venezuela will cost you about 10 cents for every dollar you’d pay in New Zealand.

A hotel room with wifi, breakfast and hot water: $NZ10. Spaghetti bolognese at a flash hotel restaurant: $NZ1. An ice cream, or a fresh juice, or a beer: 20 cents. Exploiting a regime to get the cheapest travel in the world: priceless.

And, ironically given its anti-Americanism, Venezuela’s almost certainly home to the world’s cheapest Big Macs.

 Many worry about the future of their currency and think a bundle of greenbacks under a mattress is a more secure way to save than putting bolivars in the bank.

Our fortune and luxury came about because Venezuelans really want hard currency, find it really hard to get, and so are prepared to pay through the nose. The Venezuelan government makes its citizens apply to make currency exchanges and, especially lately, it hasn’t been granting many.

It’s not just Venezuelans wanting to travel who are after US dollars or euros. Many worry about the future of their currency and think a bundle of greenbacks under a mattress is a more secure way to save than putting bolivars in the bank.

The currency situation is getting worse. To sustain its managed exchange rate, the Venezuelan government needs to have stacks of other currencies to spend – known as foreign reserves – to balance transactions out. Problem is, it’s running out.

Doctors have protested that the government no longer has enough foreign reserves to pay to import the drugs and equipment they need to treat patients. Airlines have been told they can’t take money from any fares they sell out of the country, so they’re shutting up shop. And restrictions on individuals trading currency or leaving the country are getting even tougher.

Cooped up in a hostel on a lazy Sunday afternoon we browsed a 15-year-old South America travel guide. Venezuela, it said, is the safest and most accessible country in South America. And Colombia is too dangerous a destination to contemplate. When we got back to Colombia it was safe and organised and the border guards didn’t need bribing.

 When we left Venezuela the death toll was only five and our car back to the border could skirt the fiery protest blockades. The official death toll is now 41.

As long as the violent protests continue we emphatically advise against visiting Venezuela. The country is in free fall. It’s not worth it, even though it is extraordinarily cheap.

The protests cause havoc to public services making travel hard. When we visited, the Maracaibo metro system was shut down, for example, and many shops were closed. The protests are also unpredictable, and escalating: When we left Venezuela the death toll was only five and our car back to the border could skirt the fiery protest blockades. The official death toll is now 41. The unofficial count is likely much higher. Your chances of avoiding the violence are now much slimmer.

It’s likely things will get worse before they get better in Venezuela. That could easily mean civil war. Even the cheapest travel isn’t worth getting mixed up in that.

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