Oil, dollars and daily survival: the strange state of Venezuela’s economy

0:00Today on State of the World, oil, dollars, and daily survival. The strange state of Venezuela's economy.

0:11You're listening to State of the World from NPR. We bring you the day's most vital international stories, up close where they're happening. I'm Greg Dixon. The first dollars from U.S. sales of Venezuelan oil are making their way back into Venezuela's economy. That appears to be easing price pressures for now. Venezuela's interim government says the cash infusion is helping to curb runaway inflation, which has surged since the U.S. took control after they captured President Nicolas Maduro about three weeks ago. But economists and ordinary Venezuelans are asking whether it's sustainable for a foreign government to control the nation's economy.

0:52With help from Venezuelan journalist Maria Gratterall, NPR's Carrie Khan gives us a sense of what life is like in Caracas these days. 60-year-old Miguel Jaimes calls out the price of fresh fish from his stall in the Quinto Crespo municipal market in downtown Caracas, all in the local currency Bolivars. bolivars.

1:19But everyone calculates the prices in dollars. The country, which has been in economic freefall for more than a decade, has long been unofficially dollarized. But since the U.S. attack on January 3rd, prices have hit new highs, say shoppers like Ramon Perdomo, a 64-year-old retired lab technician. He was looking at some cheese, which he says is selling at$7 a kilo. Who has that kind of money, he says, let alone dollars to buy it?

2:00No, dear, he says, forget getting any meat or rice or sugar, none of that kind. I only have enough for a little bit of cheese, some ham and hot dogs, his grandson's favorites, he says. Perdomo's monthly pension is 130 bolivars, less than 40 cents. His daughter's private sector salary keeps the extended family afloat. Annual inflation, the highest in the world at 600 percent last year, has depressed income, says Venezuelan economist José Guerra at the Central University of Caracas. The wages are very low and people can't afford to buy the necessities like food and paper services like electricity, gas, etc.

2:44He says more than 70 percent of the population lives in poverty. Interim President Delce Rodriguez announced this week that prices are stabilizing thanks to the$300 million injection from oil sales.

3:02In this official video, Rodriguez doesn't mention it's the U.S. controlling and selling Venezuelan oil that's brought the windfall. According to the Trump administration, the oil was sold and the proceeds sent to banks in Venezuela. But it's unclear how the deal actually works, says Phil Gunson of the International Crisis Group. and not just questions about the long-term viability of the U.S. managing Venezuela's economy. But whether it's politically feasible for the government here to simply outsource its economic management to a foreign government, and not just any foreign government either, I mean a foreign government with which it has been in a significant conflict for the last quarter century.

3:47At the downtown Caracas market, though, shoppers want immediate help. Cesar Calderón, a 52-year-old delivery driver, says he's got to feed a teenager at home who eats for three, so he'll just keep relying on what he always does to deal with Venezuela's staggering and ever-fluctuating prices.

4:10Magic, he says. You take a little from here, you buy a little there. That's how we survive, he says. Kerry Kahn, NPR News.

4:24That's the State of the World from NPR. Thanks for listening.