Venezuela

In October 2013, I am travelling to a country in turmoil.

In the Spanish American war of independence, Venezuela was one of the first territories to declare its independence in 1811 but that independence was only gained in 1821 as a part of the federal republic of Gran Colombia. Simón Bolívar, the libertador, the towering South American independence hero was born in Caracas. A century later, during World War I, oil was discovered which transformed the Venezuelan economy. In 1960, Venezuela’s GDP per capita stood at 1,138 $ which put it worldwide on rank 18 and higher than countries like the Netherlands, Austria and Italy. Unfortunately, Venezuela’s elites were not able to transform this oil wealth into proper economic development. Venezuela was rather an economy artificially inflated by oil money. By 1969 its GDP per head had fallen to rank 31 and by 1979 it had slipped to 44. Falling oil prices in the early 1980s led to an economic crisis that persisted into the 1990s. The Caracazo riots in Caracas in 1989 left several hundred people dead, by this time Venezuela had fallen to rank 87 according to GDP per head.

In February 1992 an unknown major in the Venezuelan army named Hugo Chávez launched a coup attempt that quickly faltered. Chavez gave himself up to the government and publicly called on fellow coup members to lay down their arms to prevent further bloodshed as dozens had already died. Chavez admitted failure “por ahora” (for now). The coup made him a media star and he was perceived, especially by poor Venezuelans, as fighting for the common man against government corruption and kleptocracy. He was sentenced to prison but freed by a new president in 1994 and in 1998 he was elected president with 56% of the vote with promises of widespread social and economic reforms. He was overwhelmingly supported by the country’s poor and its “disenchanted middle class”.          

To do Hugo Chávez justice is difficult, he was a complicated man. He was extremely charismatic and there is no doubt that he was motivated by the idea to improve the lot of Venezuela’s poor. He saw that many developments in Venezuela had gone wrong in the last decades and that society had separated into a poor lower class and a prosperous upper class. Chávez did not cheat in elections; he generally followed the law and did not throw his opponents into jail. That is the positive part about him.

The negative part is that he was delusional, megalomaniacal, not very wise and generally just not up to the intellectual demands of the office. He took many decisions on his own without proper advice from experts. In many ways he had the temperament of a child. These words might remind some readers of US President Donald Trump. Just imagine Trump not being shackled by strong institutions but free to entertain all the ideas that come into his head. This is how Chávez governed.

His economic understanding can essentially by summed up as Donald Duck economics. He considered the state oil company PDVSA as his version of Scrooge McDuck’s giant money bin, that would never run empty no matter how much money you would take out of it. It is often astonishing to me how many people believe that there are certain companies that have unlimited resources where it does not matter how much you squeeze them. They should know from just following the news that even massive companies sometimes go bankrupt because they had to spend more cash than they took in over a sustained period of time. But most of the people with these ideas, unlike Hugo Chavez never come in the position to actually gain control over such a company.    

Chavez was lucky that the oil price started to rise strongly basically the moment he came to power. That gave him the financial resources to pursue his social policies and claim to start a totally new chapter in Venezuela’s history by basically doing the same as his predecessors had done: Throwing oil money at problems without properly developing Venezuela.

Chavez certainly temporarily improved the life of poor Venezuelans but he did not do that in a smart way. To the great benefit of the poor, he had opened numerous small clinics staffed with Cuban doctors. Cuba send these doctors in return for oil shipments. But the clinics were small and inefficient, many of the Cuban doctors unmotivated as they had been sent Cuban-style against their will and by the time I visited many of these clinics had already been closed again due to financial distress. Chavez realized that many of the poor of Caracas, whose houses were stretching up the hills, had no easy access to public transport. His reaction was to have some cable cars built to bring the people down into the valley where they could switch to other forms of transport. Was that the best solution for Venezuela? No one in Venezuela could build these cable cars but the company Doppelmayer from Austria was happy to do it. So, at great costs, without benefitting the Venezuelan economy (but the Austrian), the cable cars went up. All around, the economic decisions taken by Chavez were highly incompetent.

Before Chavez, the state oil company PDVSA had the reputation of being professionally run but contributing too little to the well-being of ordinary Venezuelans. That means Chavez was absolutely right to demand changes in the way the company’s earnings were distributed but by treating PDVSA as a piggy-bank (around Venezuela you would see its logo on many new projects that had nothing to do with oil), stuffing it with loyalists instead of experts and depriving the company of needed investments Chavez actually caused Venezuela’s oil output to drop. As a result of this and falling oil prices, his government ran into financial trouble.

Chavez decision making was breath-taking in a negative sense. He had a weekly TV show called “Aló Presidente” and besides that soon found out that the constitution allowed him to address his people via TV whenever he felt the need to. This was of course meant for emergencies but Chavez took it as a license to address the people whenever he wanted. The normal programme would stop, he would appear on the screen and share his thoughts on his great love of baseball or he would come up with a new idea. This could go in the style of “yesterday, I read a book, now I have a great idea for what to do, in the future we will do it this way, that way.” He had shared this idea with no one in his government, had not cleared if other people found it as smart as he did but expected his words to be transformed into government policy. And government policy too often followed not logic but chased dreams.     

For me, the best example of the Venezuelan madness is the price of petrol. Petrol is often cheap in countries that produce oil but Venezuela is a league of its own. The picture below shows the petrol pump after we filled up an empty Toyota Landcruiser. We received 80 litres of petrol at a price of 5,61 Bolivars. At the official exchange rate of six Bolivars to one US-dollar this would already have been less than 1$. At the black-market rate, which stood at about 50, this was a bit more than 10 Cents. For 1$ you would have received more than 700 litres of petrol. The 0.5 litre bottle of water we also bought cost 10 Bolivars by the way.

Why is petrol so incredibly cheap? It has always been cheap in Venezuela but the price became ridiculous as the Chavez government was confronted with complaints of inflation. Instead of owning up to their economic policy they denied the existence of inflation and pointed to the price of petrol that stubbornly remained the same.

Does the cheap price of petrol benefit Venezuela’s poor? On the first view yes, as it allows cheap public transport but on a second view it becomes clear that the cheap petrol benefits people according to how much petrol they use and the richer people are, the more cars they have and the more petrol they will buy. Chavez even stated that publicly, but was somehow unable to come up with a solution.

By the way, Venezuela does not have enough refining capacity to produce all the petrol that is needed. That means that Venezuela is buying some petrol on the world market at world market prices and then giving it away at home for basically nothing. You cannot run a country like this.

Opposition against Chavez had formed quickly but he was extremely popular with poorer Venezuelans (understandably so in the beginning) and won several elections, came back after being briefly ousted in a coup in 2002, survived a three month long general strike in 2002/2003 and a recall referendum in 2004. He won a third term in October 2012 but died from cancer in April 2013.

A few years of Hugo Chavez might have been very beneficial for Venezuela, shaking the country up and bringing the poor people more into focus. But fourteen years of active incompetence were too much for the country. But worse were the people who came on Chávez coattails. When I arrived half a year after Chávez death his appointed successor Nicholás Maduro had been elected president in a razor-thin victory that was seen by the opposition as fraudulent. Maduro was, and still is, as incompetent as Chávez but lacking all his charisma. While I was in Venezuela, Maduro fantasized about the face of Hugo Chávez appearing and speaking to him on the Caracas metro.

The attentive reader has already noticed two terms that give an indication of how deep the economic trouble of Venezuela was: “inflation” and “black-market”. While inflation is normal its runaway version points to unsound economic policy, and black markets develop because of shortages. Venezuela had two, a currency black-market as the government upheld an artificial exchange rate of six Bolivars for one US-dollar but was unwilling/unable to actually give people the US dollars they wanted. Venezuela also had a black market in goods. The economy was run in such a bad way that basic necessities were lacking at times. Milk was one of them but the most publicized had been toilet paper. For that reason, I bought a roll on my last day in Curacao.

Chávez had always claimed that these shortages were due to elements in society hostile to his revolutionary reforms (maybe partly true) or he just blamed the capitalist United States (totally ridiculous). In fact, it was mostly of his own making, if you pay your dairy farmers less than it costs to produce milk they will stop doing so. To the toilet paper shortage, Chávez responded true to form by sending the army to the factory.

From outside Venezuela, detailed information was difficult to get. I arrived from Curacao to nearby Maracaibo which is not a touristy city. I booked my hotel online to be sure of a place to stay, I was aware of the black market (but not of the exact rate) so I arrived well stocked with US dollar bills. I changed 10$ at the airport at the official rate of 6 Bolivars per dollar and agreed on a price with the taxi driver in US dollars. At the hotel, I asked them about changing money and the lady was smart enough to guess that I did not know the exact rate. I proposed 35 Bolivars to the dollar and she happily agreed. I would later find out, thanks to www.dolartoday.com, that the market rate had been around 47 at that time.

When I left the country five weeks later the exchange rate was at 65, meaning the Bolivar lost 38% of its value in just five weeks. Right now, as I write this in October 2019 the Bolivar is at 20,995. For a budget traveller Venezuela was something of a paradise, at the market rate it would have been seriously expensive, a small bottle of coke was something like 18 Bolivars (3$) but at the black-market rate this was reduced to something between 27 and 38 cents. For touristic tours the difference was even more stark. Venezuela has several attractions that can only be reached by going on an organized tour. Angel Falls, the highest waterfall in the world requires a flight and a boat trip, the “lost world” of Roraima is a multi-day hike and the Orinoco Delta can only be visited on an organized trip as well. Judging from my guidebook all these activities seemed prohibitively expensive but with the black market they were all very affordable. 120$ for four days all-inclusive to Angel Falls, including the flight? Why not? 90$ for three days in the Orinoco Delta? Let’s go. Roraima was the most expensive because the local tour operators had a deal to keep the prices high. Instead of the planned two-and-a-half weeks I spend more than five in Venezuela.

The situation also had its drawbacks for travellers. Criminality had risen sharply, many inner cities were totally deserted after dark. I would often go to have dinner in the evening with only a few dollars of cash with me and nothing else as everybody was muttering how dangerous it was. Most travellers bypassed Caracas completely. A second problem were the police, they, as everybody else, knew that travellers were carrying high amounts of cash. I only ran into serious trouble with them once after a long and tiring bus ride to Santa Elena. I manage to take the officer at his honour by accusing him of only looking for money, told him that in 30 years in Germany I had been controlled once and in one month in Venezuela I had been controlled 30 times which was roughly correct. Other travellers were strip-searched and things like that, the border from Colombia to Venezuela was especially notorious.

In Maracaibo, on my first day in Venezuela, I got a taste of the country. Walking through an atmospheric neighbourhood local people tell me to be careful with my camera. It would be dangerous nowadays to show something like that on the street. Later, I spot a supermarket. I’m curious to go inside because I want to get a feel for the price level, I want to know if street vendors give me realistic prices or if they wildly overcharge me. There are plenty of people in front of the supermarket but everybody is moving quickly inside and so do I. All across the supermarket there is sugar and everybody seems to grab a few packages. I only take a bottle of water but at the cashier I am being asked for a “card”. I give her my passport but she is not happy with that, I have no clue what she really wants but after some back and forth with a colleague she takes my money, prints the receipt and erases a number on it. As I step outside, two police officers have blocked the entrance and a queue is starting to form, weird country. With a little hindsight, it all makes sense. There had been a shortage of sugar, the supermarket had received a large shipment and because of that, many people came to buy the priced sugar. Because of the onslaught, the police from time to time closed the doors and I had just swept in as they had opened them again. To prevent people from hoarding sugar, the next shortage might be just around the corner, sales were limited to four packs per person. For that, people have special personalized cards. As I did not have one, they used someone else’s card which was unproblematic as I did not buy a rationed good but then crossed out the number of that card on the receipt.

Shortages were a fact of life in Venezuela but as a traveller you would hardly feel them. People would lament, like my paragliding-instructors (why not have a try with Venezuelan prices?) in Mérida who complained bitterly about the absence of maize meal, which prevented them from cooking arepa, Venezuela’s national food. But most businesses were connected well enough to the black market to ensure a stable supply of the most needed things. The paragliding- instructors also gave me another insight, they first sounded me out over politics before they started speaking their mind. Many tourist, they claimed, considered Chávez as a hero of the left and did not see the problems he caused in Venezuela, for them he was just a son of a b***h.

They also introduced me to an opportunity how the middle and upper class can make some money at the moment. This gave me the explanation why airlines had reported the phenomenon of flights to Venezuela being fully booked but nearly empty. The banks would not exchange Bolivars into dollars at the official rate but for travelling abroad you could get a yearly allocation of 3,000 US-dollars on your credit card. To get the allocation you had to present a flight ticket. What did people do? They booked a flight, got the 3,000$-allocation, then one person was going with a few credit cards and withdrawing 3,000$ with each of them. On their return, they would exchange the money on the black market. The gains were fabulous. You needed to have 18,000 Bolivars in your bank account for the 3,000$, you had some loses for the flight and the expenses for the person travelling but in the end this person would return with let’s say 2,800$. At a rate of 50 this would result in 140,000 Bolivars. Subtract the 18,000 Bolivars you had spend in the beginning and the exchange-rate-manoeuvre would yield a handy return of 122,000 Bolivars. A doctor in a hospital makes 10,000 Bolivars a month so you could either work a whole year or just engage in a bit of black-market trading. Of course, you needed to have 18,000 Bolivars in the bank and a credit card to be able to use the scheme so the poorest Venezuelans were left out. To do the Maduro government justice even they had realized how untenable this situation was and stopped the allocation of the 3,000$ for the coming year.

The famous cable car in Mérida, bringing people from 1630m straight up to 4700m, is under reconstruction, it has been for years, seems the money is lacking. From Merída we cross the Andes. There was heavy rain the night before and avalanches have blocked the road at several points. I realize how well protected our roads in Europe are against adverse weather conditions. In the afternoon, we arrive at the wetlands of Los Llanos. We have an amazing river cruise full of birds and even some otters the next day. In the afternoon, we get an experience of wildlife watching Venezuelan style. As we spot a giant anteater in the distance a young man is dispatched to chase it with a stick in front of our car. Disgusting.

I move on to Coro at the coast and visit Caracas before heading to Ciudad Bolivar to start the trip to Angel Falls. Salto Ángel is at 979m the highest waterfall in the world. It lies in an uninhabited area so that you first have to take a flight to the beautiful lake of Canaima with its waterfalls and from there you have to take a small boat for several hours upstream with a skilled boatman. An hour of walking finally brings you to the foot of the falls. Venezuela has several of the highest waterfalls in the world as it harbours several tepui, “table mountains” that steeply fall off for several hundred metres on all sides. The water that collects on the plateau forms the waterfalls. Given these facts it should be clear that the waterfall is not drawing from a huge reservoir of water and the volume is highly changeable with the rainfall. In fact, on some days Angel Falls is completely dry and on others you see some water coming over the edge but nothing reaches the ground.

On the 9-seater plane, I sit in the seat of the co-pilot. Great panorama. It is the first time I realize that you are fully in the hands of the pilot on such a small plane. If something would happen to him/her during the flight you would be doomed just because you would not know what to do. As we approach the airstrip, the pilot tells me to put away my camera bag. He will soon need to pull the controls towards him and if he does that they will also come out on my side. We leave too late for the boat trip; we are still waiting for a family that arrives on another plane and they are late. As we leave the boat, we know that we have to hurry up and will not have much daylight time left at the falls. As night falls, the rain starts. We get totally drenched; I lose one of my camera batteries as it gets short-circuited by the water in my bag. We do not have enough lights. I give my headlamp to the family with the small child and share another lamp with my three Russian friends. The way is treacherous with all the wet roots. We make it safely. From our camp we can see the upper end of the falls and with the rain the water is now pouring down. I try to take some pictures and forget my camera lying in the grass, rain starts again and as I remember the camera it is completely wet. Thanks to Nikon’s weather sealing it still works. I dry it overnight and the next morning the screen is totally white but to my great relief the colour will come back over the next days.

I mentioned the three Russian, they teach me another lesson about Venezuela’s economy. They are from Siberia and they are in Venezuela to repair military planes. That is the Venezuelan way. Buying planes from somewhere else and paying someone else to repair them, spending money all along the way and not gaining knowledge. The Chinese, my Russian friends say, make it different. They did not buy the plane but a license for the plane so that they could build the planes themselves and nowadays they are actually competing with the Russians for the contracts to service the planes. I start looking for the origins of products I encounter in Venezuela, very few are produced in Venezuela, most is imported.

Back in Ciudad Bolivar we have a new marvel of economic policy to admire. The government has just mandated that all economic appliances in the shops have to be reduced in price by 50%. They give a reason for that; they claim that the shops would receive US dollars at the official rate of 1 to 6 and could therefore buy the electronics cheaply. They would make an unjustified windfall and that had to be stopped. Are they correct? No, they aren’t, it is the same incompetence that brought the black-market mess to Venezuela in the first place. Most businesses have no access to dollars at the official rate, only the politically well-connected have. They make a windfall but even with a reduction of 50% they still make a windfall. But the not so well-connected businesses? They have no access to official rate dollars and get their dollars on the black market so a 50% reduction is actually breaking their backs. If you interfere with a market economy, even if your intentions are good, you have to do it in the most transparent manner. Otherwise, you create bottlenecks and you create decision-makers that are susceptible to corruption. Venezuela failed with that.

I meet Stacey again, an American traveller who loves animals as much as I do. We had already been together in Los Llanos and now we head to the Orinoco Delta. With us is Edwin, who hates the Belgium November, and has now managed to be away from Belgium in that month for 34 years in a row.

My last stop in Venezuela is Santa Elena right at the border with Brazil. It is the starting point for the tours to the “lost world” of Roraima. In Connection with Angel Falls, I have already written about the table mountains in the south-east of Venezuela. They are about a thousand metres higher than the surrounding plain and they are basically cut of from the surrounding nature by their steep sides. Their climate is also different. The tops of the mountains have conserved a nature that existed a long time ago. As geologists realized these circumstances they really hoped for a while to find lost worlds with amazing animals that had long gone extinct elsewhere. Well, these lost worlds kind of exist but they are not that spectacular. Roraima has numerous endemic plants that only exist on this mountain. Other similar mountains have their own endemic plants. Animalwise, there is the frog. It is tiny, black and it cannot jump. If it senses any danger it rolls itself into a ball and just rolls down into the next crevasse. If the danger has passed it climbs up again. In other areas this defenceless frog has long gone extinct but here it survives. To get to the top is a serious hike and the whole trip takes six days. It is a nature reserve and we are asked to do our toilet into a plastic bag that one of the porters has to carry down the mountain. The porters are young guys of like 16 years and one day, after some heavy rain we have to cross a little stream that is masquerading as a mighty river. One of the porters is terrified as he nearly slipps while crossing the water. We have plenty of rain but the nature is just outstanding.

Because of media reports about shortages of toilet paper I had brought a roll with me from Curacao. To my surprise, all over Venezuela there was toilet paper. On the evening before we started on the Roraima trek we met with Fernando our organizer. At the end of the meeting he held up a roll of toilet paper: “We are out of toilet paper. I bought this roll for 40 Bolivars on the black market. Usually, it is only 20. I give this roll to the only girl in the group and for everybody else, I know there is toilet paper in the hotel you are staying, so tomorrow you all take the roll from your room with you on the mountain.” There you go.

Venezuela just keeps teaching me lessons about life. While I am in Santa Elena it is for some days cut off from the rest of Venezuela. Barricades have gone up in a village of indigenous people along the only road after a local was killed in a car accident. The opinions on both sides are strong and clear. For the Spanish ancestry majority population, a drunken indigenous guy was stumbling in front of an oncoming car and got killed. Bad luck but mostly his own fault. For the indigenous villagers it is another case where outsiders were recklessly driving through their village and needlessly killing one of their own. The villagers demand that speed bumps, a common occurrence on Venezuelan roads, are installed to force people to slow down. That is a fairly logical demand but Venezuela’s political system was not able to resolve the problem by just talking with each other. The villagers had to blockade the road several times, for several days until they were heard. As we head to Roraima, the speed bumps are already under construction.

Santa Elena is about ten kilometres from Brazil. The border is easily passable without any controls. Do you remember the incredibly cheap petrol prices in Venezuela? Perfect conditions for a bit of smuggling, you fill up, take a ride to Brazil, relieve yourself of excess petrol and head back home. The Venezuelan authorities were quick to understand that. Their reaction was to reduce the opening times of the two petrol stations in Santa Elena to a few hours each day. Someone who does not have a full tank cannot smuggle. Because of the short hours, petrol is in short supply and long lines form at the stations. At least they found an inventive way to make the waiting game agreeable. You drive to the station, you get a big number painted on your windscreen and then you are free to do whatever you want until your number is next in line.          

What else is there to know? If you ever travel on an overnight bus in Venezuela be prepared for extreme cold. I was warned by my guidebook but still surprised. People hat hats, blankets and stickers to put over the cold air outlets. I have no clue why the buses have to be so freaking cold in a tropical country and I have no clue why people are not just complaining.

From Venezuela, I wanted to head on to Guyana but despite a border of hundreds of kilometres there is only rainforest and not a single road linking the two countries. There is also political enmity as Venezuela claims half of Guyana.

In late 2013, Venezuela seemed close to a breaking point. You just had the feeling that things couldn’t go on like this, President Maduro had won the elections only by a tiny majority (the opposition claimed fraud) and you just thought that saner times would one day return to Venezuela. Unfortunately, they have not. Maduro is still in power, nowadays as an outright dictator, street fighting has claimed hundreds of lives and Venezuela has fallen into destitute poverty. Millions of Venezuelans have fled the country. I would not dare travelling there at the moment.