By Jeremy Morgan
Latin American Herald Tribune
CARACAS -- While London slipped out of the world's top 10 most expensive cities for the first time since 2001 -- sliding to 16th place from third as the pound and rental prices slumped -- Caracas surged from 89th to 15th most expensive city in the world.
According to consulting group Mercer's Cost of Living Survey, the strong US dollar and a Venezuelan bolivar that is fixed to it, made Caracas more expensive than London.
Aside from a shortage of housing, the price of food has also soared in the petrol-rich Latin American country.
Part of this particular problem is that despite a climate favourable to farming and lots of fertile land, Venezuela imports so much of what it eats – 50 percent or more, according to unofficial estimates.
With the national currency, the so-called “strong” Bolívar Fuerte, losing a estimated 36 to 40 percent of its value in the black market (it now takes 6.5 bolivars to buy one US greenback, though the government maintains the fiction with an official rate that it is only 2.15) since it was introduced at the beginning of last year, the pressure is constantly on importers of food. Rampant inflation ensures that it doesn’t take long for fluctuations in the hard currency cost of importing food finds its way into stores and supermarkets.
Some price “adjustments” are truly staggering. This lends weight to suspicions among consumers and government officials alike that suppliers are gouging prices for all they’re worth.
At one outlet, and in the space of just one week, the price of a kilo of French Brie cheese leapt from BsF200 to BsF580. Not surprisingly, the vendor candidly wondered whether he was actually going to be able to sell it.
But he was in a bind. He’d already paid hard cash for the cheese and needed to recoup his investment. But there was always the danger of the cheese, shunned by consumers with limited wallets and purses, would end up shrivelling on the shelf.
“Maybe I’ll have to raffle it, and get back some popularity, or at least with the winner,” he said. The impression was that he wasn’t speaking entirely in jest.
There was a consolation, he conceded, albeit not much. This was that people were well aware that the official exchange rate of BsF2.15 to the dollar was “far away from reality,” as he put it.
French cheese is by no means an exception, given that so much else is brought in from abroad. Butter costs $12 a kilo, Serrano ham $100 a kilo, balsamic vinegar $160 a bottle, and meat that went over the counter for BsF180 a kilo a month ago now does so at anything up to BsF400. And so on, it’s relentless.
Eating out is for the birds, or at least people with bird-like appetites. And that’s assuming the bill doesn’t induce an ulcer.
Amid the gathering collective depression and an increasingly typical caraqueño penchant for disputatiousness and bad temper, a joke with an equally characteristic note of sourness is doing the rounds.
This is to the effect that Venezuela should perhaps be advertised as a tourist destination for overweight North Americans and Europeans. But the quip doesn’t actually pan out: they’d bring their solid currency with them.
For those who have to do business in what one wag calls real money, the problem is compounded by difficulties in gaining legal access to sufficient hard currency from the Foreign Exchange Administration Commission, Cadivi. The only alternative is to acquire dollars and euros on the illegal “parallel” market.
The Federation of Chambers of Commerce and Industry, Fedecámaras, estimates that 80 percent of goods entering the country are paid for with currency raised on the black market. And, of course, it’s not just food that’s affected, and it’s not just a question of translating prices in the country of origin into local currency and one rate or another.
There can be some very large increases in prices on some goods, particularly fashion items. As one pharmacist told this reporter, a woman’s cosmetic that costs the equivalent of BsF12 in Europe goes for BsF46 here.
Or take shoes, if you can afford them: a pair selling for around 25 euros in Madrid somehow gets up to BsF400 or 133 euros by the time it reaches here. By no stretch of the imagination could such a thumping increase be attributed to carriage and freight.
“It would be better to buy an air ticket and fly to go shopping in Europe,” quipped a middle-aged boutique owner whose diction indicated she once hailed from Spain. She sounded homesick, or perhaps at least nostalgic for a quieter and less unpredictable way of life.