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This is currently happening in Venezuela. It is a fascinating economic topic (for the economists here, a good idea for a paper). The historical, low-trust,cut-t
by cambalache 6y ago
This is currently happening in Venezuela. It is a fascinating economic topic (for the economists here, a good idea for a paper). The historical, low-trust,cut-throat, highly-volatile economic environment in the country , compounded with the absence of an official backing local institution for the US dollar plus the common people ignorance of the value abroad of the dollar is producing the following funny(?) or curious conditions:
- Most big and small businesses will accept the dollar (this was not very common before Maduro) but only in crisp,immaculate bills of 20 USD or above.
- The people you usually give small tips (think the kid who bags your shopping in some supermarkets ) actually get offended if you give them 1-2 bucks.This in a country were the average monthly "salary" is around 10 bucks.
- Some business may take your low denomination bills but with a big fee (10%-20%).
- Prices of goods and services in dollars are absurd. Say, a haircut maybe is 10 cents, but now a plumber wants to charge you 150 bucks just for a "consultation" visit. A dermatologist instead may charge you $30 the consult in a private place and a cardio-toraxic surgeon in a public hospital has a 20 USD/month salary.
- People are importing things like 12 oz Nutella jars and selling them at 20-30 USD, because it has become a luxurious item of conspicuous consumption, as if it were Beluga caviar.
I am pretty sure there is more, but it is getting too depressing (no pun intended)
- janhenr 6y agoThank you for sharing these insights. Definitely a fascinating read!
- freeqaz 6y agoAre there any resources to read about this more? This is crazy!
- cambalache 6y agoThe best resource for a foreigner it would be to follow normal Venezuelans in Twitter (Twitter is huge in the country! I would even dare to say it is more influential than in the US, , that is another interesting topic for another day). There is a r/Vzla in reddit, but you will get there a very specific slice of the population (young,English-speaking, pro-US, etc). The thing is everything is changing daily. For example, gas costs oficially less than 1 cent per liter, people usually left more in tips to the guy at the pump than the payment for a full SUV tank. But now, due to the huge crisis and sanctions gas is scarce(can you imagine?) so naturally there are lots of trouble at the gas stations and the government is sending the national guard (a branch of the military) to control the situation. The result? Those guys are charging undercover now up to 2 USD per liter!!, quasi-European prices. So a guy like that can get 2-3 desperate people, "earn" 100 USD in one afternoon and then spend them all in 1 jar of Nutella and 1 hour of "massage". Crazy, crazy all around.
- gonesilent 6y agoAnd add the fact no one cared about gas milage. Most cars guzzle!
- Pmop 6y agoWow. It never occurred to me that economic "fairness/lucidity" isn't taken for granted. Thank you for sharing!
- int_19h 6y agoThis all reminds me of the last days of the USSR.