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Tuesday, February 20, 2018

Remittances, the livelihood of thousands of Venezuelans

Por MRod

The financial debacle has expanded the social gap in Venezuela. Many people of average condition have fallen into poverty, while others classified as poor are now in extreme conditions. Many families depend on foreign currency sent by relatives abroad in the face of the uncontrollable devaluation of the bolívar and hyperinflation.

The Venezuelan currency has devalued to extents unseen before. One euro, on the black market, equals 296,399 bolivars. Hyperinflation strangles especially those who lack a foreign currency income. With a daily minimum wage -26,000 bolivars- it is only possible to buy only one egg.

President Nicolás Maduro blames Dólar Today, a website that values the dollar on the black market, for financial distortion. In fact, access to the portal is blocked in Venezuela by government order. But this does not prevent the rates shown by this portal being taken as a reference for many transactions. Making transactions with foreign currencies is quite tricky in the country because since 2003 there is a hermetic exchange control imposed by the Government that restricts access to foreign currency.

D.V., a woman who asks to protect her identity, said to El País, that she looks for Venezuelans in Santiago de Chile who need to exchange Chilean pesos to Bolivars to send them to their relatives in Venezuela. It is a business that has grown at the pace of the economic crisis, government controls and the exodus from the Caribbean country. "I usually publish the dollar or weight rate in my WhatsApp state or send chains to my clients. They look for me and change their pesos to bolivars that eventually reach their relatives. I do not work alone in this, but it is a company with a small team between Chile and Venezuela”, she explains.

The process of sending remittances is a circle. The bolivars are obtained from Venezuelans who generally sell properties to emigrate and need foreign currency. This is how the exchange with mediators occurs. These services are offered on social networks. In Spain, there are also accounts and even pages on the Web that are responsible for sending remittances. Tamarindo Express, for example, is popular among Venezuelans living in Spain because they are agents of two companies that send money.

Maduro has announced that he will provide "facilities" to receive remittances from abroad, calculated at the official rate equivalent to 30,930 bolívares for one euro, through the Complementary Currency System (Dicom, for its Spanish acronym). "All the people who are sending remittances. It is necessary to pursue that, to be supportive of them, with great dynamism, for any person who lives abroad and wants to send 300 dollars to his family, can count on the system, through banking, a bank account, and that bank account can function directly from the Dicom offer system and support their families, as it happens in every country in the world”, he said in January. This is a way to acquire foreign currency, although it is not the most profitable for those who send remittances to the country due to the loss of money in the parallel market, where the foreign currency has a value up to nine times higher than the official rate.

Although it is almost impossible to calculate, many Venezuelans have found refuge in remittances. Fifty-nine percent of Venezuelans have a relative who lives abroad, according to a survey by the firm DatinCorp published at the end of December. And It is not an exodus only of opponents to the Government of Maduro, 46% of the Chavistas also has a relative abroad who has fled the crisis, and help their loved ones.