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Use Of U.S. Dollar In Venezuela Sustains Some Economic Activity Under U.S. Sanctions


The Trump administration has been trying to oust Venezuelan President Nicolas Maduro for well over a year. The main tool is sanctions, and the administration imposed more this week. The Venezuelan president has managed to cling to power, even with his nation's economy in ruins. Now, as NPR's Philip Reeves reports, parts of Venezuela's economy are showing signs of life.

PHILIP REEVES, BYLINE: Pedro Rojas is making chocolate. Right now he's grinding his cocoa beans.


REEVES: We're in his family home on a hillside in Caracas.

PEDRO ROJAS: So here is - we're going to start tempering.

REEVES: Rojas lives in the basement apartment. It's also his chocolate factory. Making and selling chocolate is his passion.

ROJAS: All I want to do is work and work and work in order to add value with the rest of the entrepreneurs that are working here.

REEVES: Rojas says almost all his friends have left the country. They're amazed he's decided to stay.

ROJAS: They say, how can you still live in the country, given the whole situation? Right now when they see the business, they say, keep on going. You're doing a really good job.

REEVES: Rojas launched his boutique brand, Ta Loco, in 2018, and lost money for months. Now he's turning a small profit. He's hired three women who sift through cocoa beans, picking out the shells.

ROJAS: My plan is to double or triple my production this year.

REEVES: That sounds wildly optimistic, yet the economy in Caracas is changing. These days, Rojas can trade in dollars instead of Venezuela's currency, the bolivar, which suffers massive inflation. More than half of all transactions in Venezuela are now in dollars, according to the research consultancy Ecoanalitica. The Maduro government started allowing dollarization last year to try to reverse Venezuela's economic collapse and to counter devastating U.S. oil sanctions.



REEVES: "You can take measures like that during a war," says Maduro...


MADURO: (Speaking Spanish).

REEVES: ..."When you need your economy to breathe." He's also relaxed import controls. There are signs that strategy is working. This is Caracas' more affluent east side. New stores sell luxury imports, French champagne, Italian cheese, bottles of scotch, gleaming SUVs lined up for valet parking outside restaurants.


REEVES: Not far away, there are brightly decorated food trucks. Customers sit under sunshades eating pulled pork and Philly steak sandwiches.

DANIELA CARABALLO: (Speaking Spanish).

REEVES: "Business is better now because of dollarization," says Daniela Caraballo. She's from the Caracas Pork company, which has a truck here. As for talking politics...

CARABALLO: (Speaking Spanish).

REEVES: ...She's not interested. She says she prefers to focus on growing the business.

Venezuelans stashed away savings abroad during the country's oil boom, says economist Ramiro Molina.

RAMIRO MOLINA: If you put what private Venezuelans hold abroad, Venezuela ends up being one of the countries in the world with the highest savings rate.

REEVES: These assets are worth hundreds of millions of dollars, says Molina. He believes some Venezuelans have given up waiting for Maduro to fall. They're bringing savings home to spend on their families and businesses. Remittances from at least 4 million Venezuelans working abroad and black money from crime are also in the mix.

SADIO GARAVINI DI TURNO: The regime that says they are socialist have forgotten about socialism. They want to survive.

REEVES: Sadio Garavini di Turno is a retired diplomat and a political commentator. He says these changes come at a price.

GARAVINI DI TURNO: The gap is getting bigger and bigger between the people who have some access to dollars and the people who have no access to dollars.


REEVES: And so this is Rio Chico.

You don't have to travel far to see that. We've come to Rio Chico, a town on the Caribbean coast two hours from Caracas.

In the local vegetable market, Martina Amariqua is selling eggs. She works here seven days a week, she says. Her customers still use the bolivar.

MARTINA AMARIQUA: (Speaking Spanish).

REEVES: Amariqua says that means her earnings lose value immediately.

AMARIQUA: (Speaking Spanish).

REEVES: She'd prefer the entire economy to be dollarized. For her and her family and most others in this town, life is hard. There's a desperate shortage of electricity, clean water, food and medicine and also of money of all kinds. Evidence of that lies here in the overgrown town cemetery. Some families now bury their dead in homemade concrete tombs because they can't afford proper burials.

One grave stands out. It belongs to a child. It's made from a handful of crumbling bricks and covered by a loose-fitting lid of rusting scrap metal, crowned by a twig.

Philip Reeves, NPR News, Rio Chico. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Philip Reeves is an award-winning international correspondent covering South America. Previously, he served as NPR's correspondent covering Pakistan, Afghanistan, and India.
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