Tough Times Ahead In Post-Chavez Venezuela
"New (parts) shipments are being held back as long as we cannot honor these contracts," Bautista said.
Even as Venezuelans fight for dollars, the country sits atop the world's largest proven oil reserves, with those exports delivering nearly $1 trillion in revenues to the country since Chavez was elected in 1999.
Thanks to oil, Chavez's government had invested $500 billion on social programs since 1999, according to Planning Minister Jorge Giordani. Venezuela's poverty rate fell from 50 percent in 1999 to 32 percent in 2011 while unemployment dropped from 13 to 8 percent.
After the 2002-03 strike, Chavez began using the enormous influx of dollars as a political weapon, with the government selling businesses limited quantities of dollars at a rate that didn't reflect the bolivar's real black market value. The official rate is now about a quarter of what the dollar sells for on the black market.At the same time, the government's own dollar supply may be diminishing. Oil income trailed off from $5.6 billion in 2008 to $3.8 billion in 2012, partly because of slumps in production and refining. The government also spent heavily to re-elect Chavez in October and help Maduro's candidacy after the president's March 5 death, further squeezing the dollar supply to private businesses. As long as government dollar sales are frozen, "foreign exporters are not going to start selling to us," said Carlos Larrazabal, president of one of Venezuela's largest business chambers. "We cannot understand how it can be that we have a country with an oil price of more than 100 dollars per barrel and we have this scarcity of currency." In a bid to inject some liquidity into the economy â¿¿ and a tacit admission that the currency controls aren't working â¿¿ Maduro's interim government held a one-day auction of $200 million last week.
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