Venezuelans are dumping their currency, the bolivar fuerte, and buying dollars in the midst of a crashing economy and uncertain political future. Arbitrary arrests and jailings, riots and shotages of basic commodities also plague the oil-rich South American nation, which has been ruled by the same political party for more than ten years. To this has been added a modern quandary that is striking Venezuelans at a most personal level. Pharmacies across the country, including chains such as Locatel, Farmatodo, Farmhorro, and Fundafarmacia are reporting that their shelves are bare of all sorts of contraceptives. According to various local news sources, the scarcity has become a public health problem. Local media report that contraceptives in the form of pills, injections, implants, condoms and diaphragms have flown from the pharmacies.
According to Ultimasnoticias, the president of the Venezuelan Pharmacists Federation Freddy Ceballos said that the shortage of contraceptives and medicines is due to a “backlog in the assigning of foreign exchange.” Said Ceballos, “Contraceptives are not immune to the reality for the rest of medications: it is that laboratories do not have the dollars needed to buy raw materials or finished products.” In the case of contraceptive pills, most brands are imported as finished products: few brands are produced domestically. Resolving the contraceptive shortage may prove difficult for Venezuela. “There are three latent problems resulting from the contraceptive shortage: unwanted pregnancy, early pregnancy and sexually transmitted disease,” continued Ceballos.
Edward Romero, who leads a nonprofit abortion and contraception provider, affirmed that the stock of contraceptives has been declining nationally since November 2014. “Overnight,” he said, “all sorts of contraceptive methods have been disappearing: oral, condoms, sub-dermal implants; this crisis has gotten to the point that a woman who wants to buy a box of contraceptives will no longer be able to get it, and searching for it will be a waste of time because she won’t find it.” He expressed concern over the possibility of an increased incidence of adolescent pregnancies and sexually transmitted disease. The scarcity of contraceptives is due, said Romero, not only to the scarcity of U.S. dollars in the market, but also because of policies made by political decisionmakers.
The devaluation of Venezuela’s national currency has hit the poor and middle-classes hardest. While it is possible to purchase international airline tickets, imported vehicles, and other luxuries with U.S. dollars, these things cannot be purchased with Venezuela’s bolivar fuerte currency. Businesses and individuals are demanding payment in dollars as the economy is taking nose-dive. Venezuela is now registering the highest inflation rate in the world, putting some goods out of the reach of the poorest people in the country. Nonetheless, the good of the country’s poor continues to be the focus of the rhetoric of Venezuela’s ruling Bolivarian Party. President Nicolás Maduro continues his strident tirades against the United States, in the tradition of his predecessor, Hugo Chávez, despite his country’s ever-increasing demand for U.S. dollars. The socialist Maduro regularly leads chants of "gringo go home" and condemns currency speculation are a tool of his enemies to push him out of the presidential chair. However, some commodities such as cooking oil, sugar, and beans continue to be subsidized. For example, the decade-old price controls set the price of a bottle of vegetable oil at 20 cents at the black market rate, while a package of rice costs half that, and a sack of sugar costs even less.
U.S. carrier American Airlines announced a few weeks ago that it would no longer accept bolivars for its flights out of Venezuela. To purchase tickets online, customers must use a foreign credit card. All other air carriers have switched as well. Foreign airlines switched to dollars when the Maduro government refused to let them convert and repatriate nearly $4 billion worth of profits held in the country.
In addition, Ford Motor Co. has come to an agreement with the government to sell its vehicles only to those customers holding dollars. Ford’s production has fallen recently by 90 percent, while Ford has encountered difficulty getting the dollars it needs to import parts.
The bolivar lost over half of its value so far in 2015: currently at about 400 to the dollar on the free market. Desperate Venezuelans are seeking to sell their stores of national currency for an exchange rate 60 times weaker than the strongest of Venezuela’s three official foreign exchange rates. Dolartoday.com – a website that tracks the exchange rates offered along the Colombian border reported on May 22 that the bolivar had lost one-fourth of its freemarket value over the preceding seven days. The rated was hovering around 420 bolivars per dollar on the afternoon of May 22: the rate was 300 bolivars per dollar on May 14 and 173 at the beginning of January.
The Maduro government keeps a tight control over the official legal exchange of bolivars, using a bizarre three-tier system that is intended to subsidize crucial imports. However, it has also led to corruption and speculation. One official rate is 6.3 bolivars per dollar, while the weakest official rate, which was billed as an alternative to illegal currency exchanges, is now at 200 bolivars per dollar. That Venezuelans are willing to pay 400 to the dollar is an indication of the scarcity of greenbacks. For its part, the Maduro government is hoarding dollars while watching the price of oil plummet. Shortages and economic distortions have resulted. That Venezuelans are willing to pay double that on the black market indicates the supply of dollars is limited. A May 22 Barclay Capital Inc. report contends that an increase of Venezuela’s money supply is an underlying cause for inflation. Barclay’s predicted that the bolivar will plummet as low as 600 to the dollar. The report said, "We do not see any signal of change from the authorities but these risks should make them reconsider their policies."