The Indicator from Planet Money - Coronavirus Comes To Venezuela

Venezuela's economy was already struggling, for a variety of reasons. The coronavirus pandemic couldn't have struck at a worse time. Now the country's economy is on life support.

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This is the indicator from Planet Money Stacey and Cardiff here for the last several years. The country of Venezuela has been in a terribly deep economic crisis, which is really shocking in a lot of ways because 10 years ago. Venezuela's economy was thriving the country has giant oil reserves and back with the price of oil was Rising Venezuela had money to spare but then bad leadership and management plunge the country into economic crisis and well many countries in the world racing really strong economic growth over the past few years Venezuela found itself in increasing economic trough people cannot access food and millions of Venezuelans were starving unemployment skyrocketed along with poverty rate giant blackouts hit the country and a lot of people suddenly had no running water and then there was the inflation some days the boulevard value will drop 10% in one day the country was in crisis and then

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Coronavirus hit the last few months have seen the situation in Venezuela go from terrible to worse oil has long been the biggest part of Venezuela's economy. It has some of the biggest oil reserves on the planet, but the last oil rig stop drilling last week and the current president Nicolas Maduro is fast consolidating power which means political change in the country seems unlikely Economist Gabriella Sade Drew up in Venezuela. We had her on the show several times before to talk about her country. So today on the show the Venezuelan economy. We check in with Gabrielle about what's happening in Venezuela how things have changed because of covid-19.

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Gabriella Sade welcome back to the show always great to have you. So if you don't mind going back in time of it before coronavirus hit what was going on in the Venezuelan economy, the main universities of Venezuela published household survey that they carry out every year and the findings are absolutely heartbreaking. They found out that Venezuela has 79 printed set extreme poverty 80% of the population of the whole country is living in extreme poverty. Yes from March 2020. So right before the pandemic hit the country used to people, you know asking you for money for food and you see the entire families trying to look for food in the garbage. You have that situation plastic kind of contraction and mouse migration. So it's just, you know, the perfect storm and now you have

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Pandemic what is going on in Venezuela with covid-19 on the pandemic started we were joking and we have so many problems going to the country. But now we have over 13,000 cases which doesn't sound like a lot but you know, the number is increasing at a rate of 30% weekly. We don't know if we don't have enough cases because of her testing capacity or because the virus has spread that much you really don't know if Venezuela really has 13000 cases or if it has like three hundred thousand cases because people aren't getting tested and the government might not tell the truth. Even if they did. Yes, you have part of the country in lockdown people that can actually be under a lockdown because they have a house they have food.

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They have a car that the majority of people will first you rely on him for more jobs. They rely of you know, daily Incans to survive just yesterday. I was thinking to to this person that runs a community kitchen and she tells me that they can have clothes cuz that's the meal that everyone is our community has they have implemented, you know, I njene prodigals but still it's impossible to keep the lockdown. So you have other people going out for work, but the state has put in place many restrictions that are sometimes and Forest by Ganz like what? Okay, so there are neighborhoods in Venezuela. Because of the lack of States presidents are ruled by Ganz and if they seek you can live in your house or breaking the lock down, they will punish you so you see an excess of State fours and

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Some respects. What is the economic situation I would say it's a tell of many stories because you have Venezuelans within the country. But you also have been as vines that have left their country to neighboring countries to Colombia Peru. A lot of Venezuelans have left exactly 15% of the population 5.1 million. So it is estimated that 35% of the population relies on money that is sent back home remittances exactly for 3.5 billion. That's what is a consulting firm calculate at the yes. Oh, that's the highest source of foreign currency after oil revenues. So it's like the biggest part of the country's whole gross domestic product is number one oil and number to remittances like money from Venezuela to blast and Colombia Ecuador.

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But the thing is that this might runs they have informal jobs. These are the people that you see on a bus with a Venezuelan flag singing to make some money people that are working as waiters and waitresses and overnight. They lost their jobs and you have all these families that we're relying on remittances and remittances are going to be reduced by like 40% I actually I always have people that reach out to me so I can help them. Send money back home because there's no official channel to do this because if you do this through the official Channel, you will basically they use unofficial rate that is not accurate. So you will lose a lot of money. So what people do is they rely on other people like me for example to send money back home. What about getting food? I mean that was always like a big deal getting enough food.

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When the pandemic start of there was a gasoline shortage and that disrupted the supply chain and people are very very worried but that has been normalized a little bit and it's not like you can find a lot but you can right now it's just prices are very they have skyrocketed up until until pretty recently you were working in Caracas with a group of Economist or like your co-workers and friends. How are they doing one of my co-workers she just gave birth and it's been very tough for her because both specially because of the water shortages and their water shortages Yes Yes. Actually that's one of the main reasons why people are also breaking the crime scene because they need to just you know hunt for water.

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It's really bad. It's affecting everyone a friend of mine told me that her neighbor is basically started to offer like pizza water wings cooked food to other neighbor for a lower price that you would find in a restaurants for takeout. And so they started like that little Network and they have survived with that you basically cannot count on the government to do things. So what we do is we organize ourselves you have this community kitchen that are privately Ron you have all these people that organized to send money to this my grandson to this family's you have people donating gloves and masks to hospitals that are also in a terrible terrible situation. So it's basically in the hands of those 5 million Venezuelans that are out of the country to help.

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However, we can.

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Economist Gabriella Sade thank you. Thank you so much. This episode of the indicator was produced by Darian Woods fact-checked by Britney Cronin. The indicator is edited by Patty Hirsch and is a production of NPR.

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