Maduro tests capitalism and migrants begin to return

For years, one tragedy after another forced them out of Venezuela: hyperinflation, famine, outbreaks of malaria, and a blackout that left the entire country in darkness for a week. In all, six million people fled in what has become the largest humanitarian crisis in the Western Hemisphere; now, a reversal is starting to take shape. Tens of thousands are returning home.

It’s such an unexpected twist that even Venezuelans greeting returnees find it hard to believe. However, the pandemic has been particularly cruel to migrants scattered throughout the region. Jobs are scarce and xenophobia is rising rapidly. Meanwhile, at home, the economy has stabilized—against all odds. After years of failed interventionist policies that reduced the oil-rich nation’s GDP to a fraction of what it once was, the socialist leader Nicholas Maduro it has carried out a series of free-market reforms that are starting to boost growth.

It is a major victory for Maduro, a ruthless authoritarian who was almost defeated a few years ago by a series of sanctions similar to those that have been imposed on the regime of his close ally. Vladimir Putin in the last two weeks. The administration Biden He sent a mission to Caracas last weekend to negotiate the possibility of lifting sanctions — a sign of Maduro’s solid grip on power and Venezuela’s financial position that is suddenly much stronger. A deal would allow Venezuela to export more oil, helping offset the loss of Russian barrels on international markets just as prices soar.

It is almost impossible to put an exact number on this group or, for that matter, to know if the trend will last for years or will disappear in months. But throughout Caracas the signs are piling up: in the burgeoning apartment rental market; in increasing enrollment in private schools; in the cars that clog the streets that the exodus had left empty; and in the freshly painted restaurants and stores opening their doors to the public for the first time.

In the small towns along the western border with Colombia, it is also evident. For years, traffic was one way: exit. Now, say the locals, as many people come in as they go out.

Alejandro Rivas is one of them. “If they give me the option, I would not migrate again”, he said recently while waiting for the lunch rush on a recent weekday at his small pizzeria near downtown Caracas. Rivas, 34, returned last year from Dominican Republicwhere he also ran a restaurant, and opened Mamandini—Venezuelan slang for “broke”—in December with three partners.

After overcoming the kinds of challenges that come with investing in a failing economy, like having to rebuild the crumbling sidewalk in front of the restaurant, Rivas was pleasantly surprised with his sales of pizza (about 12 a day) and lasagna plates (30). and paste (33). His clients are not wealthy Venezuelans, but workers who can suddenly afford to spend $5 on a meal out.

This was unthinkable when Rivas left in 2015. A few years later, however, Maduro took one of the biggest steps in his reform drive: adopting the US dollar as the country’s unofficial currency. Today, more people are paid in dollars and most transactions are made in the currency. This has played a crucial role in curbing hyperinflation and helping Venezuelans regain some of the purchasing power they have lost.

The financial odyssey of Alejandro Barreto, a taxi driver, illustrates how powerful the impact has been.

Barreto left Caracas during the worst moment of the economic crisis. At the time, he was barely earning the equivalent of US$50 a month as a taxi driver. He landed on lime, where he quickly landed a job at a store that printed T-shirts. He earned around US$350 a month. Then the pandemic hit, he lost his job and went on to sell candy on the street. She went back to earning around US$150 a month and, she said, was miserable. “It was a lonely life, without friends or family”.

So he took a bus back to Caracas and started driving a taxi again. In a month, she now pockets the same US$350 he used to earn at the T-shirt store in Lima. “Coming back was the best decision I’ve made lately”says Barreto, 35.

The fact that some immigrants can now earn more money at home than abroad sheds light on one of the true oddities of Venezuela under socialist rule. Because of its idiosyncratic and Byzantine policies, the country itself is an island largely impervious to broader global forces.

Thus, while Latin American economies are still struggling to recover from the pandemic-induced collapse, Venezuela has remarkably improved.

Not only did he stop contracting the GDP (Credit Suisse forecasts a second year of growth in 2022)Instead, inflation has plummeted from a peak hovering around 2,000,000% a few years ago. This does not apply only to those who earn in dollars. Even in bolivars, inflation has slowed to an annual pace of just 25% in the past three months, according to data compiled by Bloomberg.. Oil production finally began to increase, exceeding 800,000 barrels per day.

For clarity, it’s a stabilization only after years of cataclysmic downturns that left millions living precariously. According to one study, the economy would have to grow 10% a year for 18 consecutive years to return to the reality of 1997, a year before Hugo Chávez, Maduro’s mentor and predecessor, won the presidency for the first time.

Nobody is saying that the humanitarian crisis is over. Thousands keep leaving. But emigration has slowed dramatically: The migratory flow decreased 60% last year from 2020, according to a study by the Caracas-based pollster Datanalisis, while the number of returns has increased, particularly in the middle-class neighborhoods that surround the center of Caracas..

“There are people who return, that is clear”said Luis Vicente León, who leads the Datanalisis study. This, he says, is pushing net migration towards zero (the government does not publish official migration statistics and did not respond to messages seeking comment).

No country has received more migrants than Colombia. Some 1.8 million have relocated there, destabilizing the decades-old economic order in which Colombians crossed the border into the wealthier Venezuela in search of work.

Venezuelans mostly found jobs in Colombian retail stores, restaurants and hotels, precisely the industries hardest hit by the initial shutdowns of the pandemic. After jobs disappeared, the second part of the financial squeeze came as inflation soared in Colombia and many other migrant-hosting countries. On Chile, the annual inflation rate has more than doubled in the past two years to 7.8%. On Brazilrose to 10.4%.

Economic difficulties have only further fueled xenophobia throughout the region. Anti-immigrant protests have become common in Chile, a country where there has long been tolerance for the plight of immigrants. the hashtag #ItIsNotImmigrationIsINVASION” It’s been trending on Twitter lately. And in Trinitya small island a few kilometers from Venezuela, the Coast Guard recently opened fire on a boat full of migrants, claiming the life of a baby.

Sensing the turning tide, Maduro, an authoritarian leader whose regime has been sanctioned for torture and political repression, launched a program to repatriate migrants called “Back to the Homeland Plan”. He has repatriated some 28,000 people by plane and ship, according to his government. In a recent speech on state television, Maduro called on Venezuelans to come home and announced a plan to triple the number of flights offered by the program. “Stop suffering over there. Come back!”

For Víctor Soto, all this is just political theater.

But Soto, 37, plans to return later this year to Barquisimeto, a small, steamy city several hours west of Caracas. He has lived in a working-class neighborhood in Lima that became popular with Venezuelan immigrants. When he arrived in 2017, he says, almost everyone in his building was Venezuelan. Since then, many have left, either to Venezuela or to try their luck in other countries. Now they only represent less than half of the occupants.

The information Soto has been receiving from friends back home paints a picture of a very different Venezuela from the one he left behind. Store shelves are full. There are no longer endless lines to buy basic products. Inflation no longer immediately erases the value of money. He plans to open a small restaurant in Barquisimeto and has faith it will generate enough to match the roughly US$300 he earns a month as a janitor in Lima.

Soto’s top priority, he says, is providing for his mother. It was seeing her line up day and night to buy food at prices established by her government that made him leave for Lima. “In Venezuela, I think I can give my mom the financial peace of mind that I have been giving her since Peru”. And he just wants to be home again. “The fact that Maduro is still in power will not stop me”.