On Venezuela – from a consumer point of view

I was on top Cerro El Avila, the 2100m high mountain that overlooks Caracas and is a top touristic destination when I overheard an amazing conversation. A man, sitted at a small bench, was actually explaining a couple of friends that in a democracy, a leader leaving is job after a certain amount of time is normal – it actually is at the backbone of it.

It was my first time in a communist country. And, though not a huge shock, it was different. First on the way Chavez is presented in national news – he is omnipresent, either with his own personality or through appreciations of interview persons. An example was the TV coverage of the support demonstrations when Chavez was submitted to a surgery in Cuba, including the 4 minutes dedicated to show twitter messages supporting the President. Besides this, Chavez tries to collate his image to the ones of South American heroes – and murals and quotes from them are very present throughout the capital.

But then, you also note that on the level of service you receive from a consumer standpoint. People are very nice (actually, they were extremely nice), but you are not on top of their priorities – clearly. If they are doing something else, you’ll have to wait. No performance culture here…

Venezuela has a fixed currency rate policy. As it is usual, this doesn’t reflect the true value of the currency, so, this means that I faced a very interesting problem… Everything was double the price! Because that is actually the difference between the official rate and the the informal street rate… So everything was incredibly expensive, once you don’t have access to the black market – and I didn’t.

This actually has an interesting implication. This rate is linked to a foreign currency supply limitation, that mean a multinational will have a hard time collecting dividends, profits or payments from their local operations. So, multinationals will stop investing because then they can’t get out of the country the return on their investment. An example was the 5 star hotel I was in – it seemed a hotel back from the 80’s. Probably because it was! It probably doesn’t have major renovations since the middles of the 90’s…

It was a very week and experience! I actually enjoyed the experience a lot! Though everybody talks about security, and this is an actual problem, if you are aware of your surroundings and pay attention to where you are, it won’t be a problem. And it shouldn’t bar you from knowing this country – and enjoying a limited experience in a state controlled economy…