Business & Economy

Extreme inequality persists in Venezuela despite improving economy

By Genesis Carrero Soto

Caracas, Jun 16 (EFE).- Marian’s three children look out the window toward Petare, Venezuela’s largest shantytown, in hopes their father will bring some food home to their empty kitchen.

Meanwhile, in an affluent area on the other side of Caracas, David and Ricardo are planning to open two more locations of a fast-food business they started after the onset of the pandemic.

Those disparate fortunes underscore the stark inequality that persists in leftist-led Venezuela, a country whose economy has begun to rebound from a years-long crisis triggered in part by harsh US-imposed sanctions on its lifeblood oil industry.

“We don’t all have the same luck,” Marian said of her family’s hardships over the past three years.

She said the current situation favors those who receive remittances from abroad, have property to rent or simply possess the means to buy and sell products.

David and Ricardo, for their part, assumed the risk of launching their restaurant business despite a unstable economy and the restrictions imposed to combat the Covid-19 pandemic. The de facto dollarization of the economy was an additional wildcard.

The move has paid off in spades. Their business has expanded into a four-restaurant chain in just two years, with two additional locations set to open soon.

Maria Gabriela Ponce, a researcher at Caracas’ Andres Bello Catholic University (UCAB), said Venezuela is a “heterogenous country.”

“The crisis is experienced differently depending on your social position, the place where you are. And it’s always been that way, but the crisis (that began nearly a decade ago) exacerbated … already existing inequalities,” she said.

Among those on the low end of the economic ladder in Venezuela is Marian, who quit her job two years ago to take care of her youngest child.

Her family of five now must get by on the $30 or $40 a month her husband earns at a car wash, a level of income that is insufficient to cover their basic necessities for 30 days.

She sometimes has no choice but to look for meals at her local community soup kitchen when what little she has at home is inadequate to feed the whole family.

“I’m a little worse-off than before because before this – I’m talking three, four, five years back – with a minimum salary I could more or less afford some things, not everything,” Marian told Efe.

In that same country and same capital city, Ricardo and David launched their Holy Chicken brand and even during the pandemic were able to thrive by leaning on a home-delivery model.

“Certainly all these little openings in the Venezuelan economy, the dollarization of payments, all of that, it certainly has been key for a business like ours to not only become sustainable but to achieve sustained growth,” David told Efe.

In September, UCAB’s Encovi national survey of living conditions revealed that 94.5 percent of Venezuelans live below the poverty line as measured by income.

By contrast, Venezuelan Vice President Delcy Rodriguez said in April that there had been an 86 percent increase in retail start-ups between 2021 and 2022.

Both realities exist side-by-side in present-day Venezuela, whose economy began to recover last year after hitting the depths of a seven-year slide in 2020 and is on course for a healthy expansion in 2022.

Even so, despite the benefits for some of an expanding gross domestic product, the gulf between those on top and those on the bottom of the country’s economic pyramid appear to be only widening as that recovery proceeds.

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