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During his television program, the Venezuelan president suggested that members of his government evaluate the plans that, according to what he says, nations like Zimbabwe have implemented to break with dollarization and not depend on the American currency.
“You have to be attentive and see how Venezuela is inserting itself into the initiative of de-dollarization of the world. We have to insert ourselves there. That is our way,” said Maduro, after attributing, once again, the economic difficulties of the oil country to the sanctions imposed by the United States. “That currencies are not used to punish the peoples,” added the head of state. .
However, Venezuelan economists believe that Maduro’s request is unrealizable, at least in the short term.
“It is practically impossible. There are no known reversal processes of a dollarization of this magnitude,” he responds to the voice of america the economist Luis Vicente León, director of the polling company Datanálisis.
Venezuela experienced tight exchange control for 15 years, which penalized payments in dollars and led citizens to secretly make foreign currency transactions to avoid penalties. Not surprisingly, the Maduro government itself recognized, at the end of 2019, that dollarization served as an “escape valve” for various sectors of the economy.
Thus, the nation began to spontaneously dollarize, pushed by the pulverization of the bolivar (the local currency) and by the hyperinflationary cycle that it entered in 2017. In those days, restaurants, stores, and automarkets began to set their sales prices. in dollars; while self-employed professionals also established their fees in dollars.
“I see de-dollarization as extremely difficult, because the bolivar, as a unit of account, does not exist,” says the director of the financial firm Ecoanalítica, Asdrúbal Oliveros. “I see this process as very, very complex, because it also implies restoring confidence in your currency, and that is not achieved by decree; that is achieved with concrete actions, with public policies. When a Venezuelan thinks of savings, he thinks in a currency other than the bolivar. There are no savings mechanisms in bolivars, because we have extremely high inflation, which the Central Bank has recognized at more than 400 percent,” says Oliveros.
