Venezuela By The Numbers The crisis in Venezuela continues to deepen, with nationwide blackouts hitting the country again this week. Today, we talk to a Caracas-based economist about what's happening in her country.
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Venezuela By The Numbers

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Venezuela By The Numbers

Venezuela By The Numbers

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STACEY VANEK SMITH, HOST:

This week, Venezuela saw more nationwide blackouts. Like, the lights were out in the entire country for hours.

CARDIFF GARCIA, HOST:

And the reason, of course, is the continuing collapse of the state under President Nicolas Maduro. Under his presidency, Venezuela's economy, its currency and industry have collapsed to an epic extent.

VANEK SMITH: The money - the Venezuelan bolivar - is nearly worthless. Electricity and running water are sporadic, and most Venezuelans cannot get enough food.

GABRIELA SAADE: I see numbers that I had never seen.

GARCIA: Gabriela Saade is an economist in Caracas, Venezuela. She's 27. For her work, Gabriela looks over Venezuela's economic data - the numbers.

SAADE: It's shocking because you see this - you see those numbers in war zones or things like that, but we don't have that conflict here.

GARCIA: This is THE INDICATOR from Planet Money. I'm Cardiff Garcia.

VANEK SMITH: And I'm Stacey Vanek Smith. Today on the show, Venezuela by the numbers - three economic indicators that give us a window into what's happening in the country.

(SOUNDBITE OF MUSIC)

VANEK SMITH: Gabriela Saade spends her days in an office in what used to be the financial district of Caracas, and she looks at data.

GARCIA: She works for Fundacion La Mejor Venezuela. It's an internationally funded think tank that's affiliated with the Venezuelan opposition party. Gabriela and her team look at all the data they can get their hands on about the country. And a lot of it comes from local universities, nonprofits and economists all over the world because the government itself is not publishing reliable data.

SAADE: We do a lot of research to understand what the structure of the state is.

VANEK SMITH: And understanding what the structure of the state is is not easy. Gabriela says the government seems totally disorganized. It's taken over hundreds of businesses, and they all seem to be losing money, she says. Basic services are collapsing, and meanwhile, the bureaucracy grows and grows.

GARCIA: Indicator number one - 996. That's the number of companies, by Gabriela's count, that are now owned by the state.

SAADE: The supermarket chains and hotel chains, the Internet provider in Venezuela - they belong to the government. They even own, like, bakery shops, things like that. It's crazy, and it's not even profitable. I have seen the balance sheets of all of these institutions. That's what I do, you know? And all of them needed transfers from the central government in order to operate - all of them. So it's unsustainable. It's financially unsustainable. It's like, why don't you just - I don't know - give it away to anyone? I mean, it's better to do that than to keep, you know, a burden on your budget.

VANEK SMITH: Case in point - the electric company. In 2010, Hugo Chavez, the then-president, nationalized electricity in Venezuela to make it more affordable for everybody.

SAADE: The government nationalized it. And - well, it has become a mess.

VANEK SMITH: A mess. The government says outside attackers are infiltrating the power grid and shutting it down. That's why they say the country's been experiencing all of these rolling blackouts. But Gabriela says there are no attackers. It's just that the country cannot afford to keep the lights on anymore. The infrastructure is collapsing.

GARCIA: The country has rolling blackouts all the time now. Gabriela says that the once-vibrant city of Caracas is often pitch-black for hours and hours.

VANEK SMITH: And, she says, the consequences of these power outages can be really extreme.

SAADE: Just in the blackout, 80 newborns died just in one hospital.

VANEK SMITH: Oh.

SAADE: Yeah, it was horrific.

GARCIA: Of course, for all the businesses that the Venezuelan government has nationalized, there is one that traditionally has really driven its economy, and that business is oil. Traditionally, about a quarter of Venezuela's economy comes from oil production because the country has the biggest oil reserves in the world.

VANEK SMITH: What about the oil? Is money still coming in from the state-owned oil company?

SAADE: Yes. OK, so some money is still coming, but, you know, we - I remember when this whole thing started. When Chavez won the presidency, I remember that we were producing 3 million barrels a day. Now we are not even producing 1 million barrels a day.

VANEK SMITH: Oh.

SAADE: And - you know, and prices are lower than they used to be during the bonanza. So for them - I mean, they are running out of options.

GARCIA: Running out of options, in part because for so long - for more than a decade - economists agree that the government has been mismanaging its production of oil.

VANEK SMITH: And now the Venezuelan government just needs money. Gabriela says it's getting money from any place it can. The government and the military have taken over some gold mines in the southern part of the country, and there are many reported accounts of the military and the government being tied in with cocaine trafficking.

SAADE: I mean, this is serious. I mean, we have government officials involved in drug trafficking.

GARCIA: One of the big cartels in Venezuela, for example, is called Cartel of the Suns. That is reportedly a reference to the gold stars on epaulets of military generals.

VANEK SMITH: But any money the cartel or any other business does bring in isn't necessarily going to fix the country's infrastructure or even help fund the Venezuelan economy.

GARCIA: A lot of it is being funneled to a tiny minority of people, many of them tied to the government and the military. And Maduro still has the military support, which is one of the reasons why he's been able to hold on to power this long.

SAADE: This very small group of new millionaires that belong to the elite of the government and - I mean, all of them have power plants. And - for example, they didn't suffer from the blackout.

VANEK SMITH: They have their own power plants?

SAADE: Yes. So we call them enchufados.

VANEK SMITH: Enchufados.

SAADE: The - yes. The translation of that - it's like when you plug in something. We call them like that because we say that they are plugged into the government. So they received all these benefits, and they are, like, the new elite here. And you see them everywhere.

VANEK SMITH: How can you spot the enchufados?

SAADE: It's very easy. All of them drive this black, big trucks - bulletproof - and they have security guys surrounding them in motorcycles.

GARCIA: Meanwhile, Gabriela says, 90 percent of Venezuelan citizens live in poverty. That is today's second Planet Money indicator. 90 percent of Venezuelans are in poverty.

VANEK SMITH: And even a lot of Venezuelans who had a fair amount of money before the crisis are now totally broke because of hyperinflation.

GARCIA: Inflation is estimated to be running at 10 million percent - 10 million percent. The cash has become so worthless, people are actually making bags out of the cash.

SAADE: Our currency was completely destroyed, so that's one of the things I see. Like, you know, the function of money - I mean, it is lost on our currency.

VANEK SMITH: And that means things like food keep getting more and more expensive, relative to what people are earning. So a lot of people cannot afford enough to eat, and there's not much food around even for those who can afford it. The collapsing infrastructure in the country means food is not getting produced by farmers, and the food that is getting produced is not getting delivered to stores.

GARCIA: In 2017, the average Venezuelan adult lost nearly 25 pounds. Gabriela says she sees evidence of this weight loss every single day.

SAADE: You go to the streets, and people in Venezuela - they are very skinny. Yeah, it's very, very shocking to see that.

GARCIA: Gabriela says things are so bad now that a lot of people have just left the country. In fact, an estimated 3 million people - that is 10 percent of the entire population - has fled. Many people just walk across the border to countries like Colombia with nothing at all. They're just trying to get out of Venezuela.

VANEK SMITH: And that is our third indicator. Ten percent of the Venezuelan population - gone. Gabriela says she sees the effects of this in Caracas. The sidewalks are emptier. Many stores are shuttered. Many houses are just standing empty.

GARCIA: Gabriela says that apartments that used to rent for more than a thousand dollars a month back when the economy was good are now asking for rents of less than $200 a month. That is more than an 80 percent drop because so many people have left.

VANEK SMITH: Gabriela has thought about leaving, too. Her father is American. She could go, but she says when she sees how bad the numbers are getting, how bad things are getting, she thinks there has to be big change on the horizon.

SAADE: There is a reason why I'm still here. The reason is that I believe that it's possible, but I don't know how much longer they can resist.

GARCIA: But Caracas is not an easy place to live. Every day, Gabriela sees different parts of her country collapsing all around her. And tomorrow, we are going to follow Gabriela through her day.

(SOUNDBITE OF MUSIC)

GARCIA: This episode of THE INDICATOR was produced by Darius Rafieyan and edited by Paddy Hirsch. Our intern is Willa Rubin. And THE INDICATOR is a production of NPR.

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