For years, one tragedy after another has forced millions of Venezuelans to flee their homeland: hyperinflation, hunger, malaria outbreaks and rolling blackouts that left the entire country in the dark for a week have pushed this economy into the backseat. of South America despite being the country with the most proven oil reserves.
This situation led to six million people fleeing in what has become the largest Western humanitarian crisis to date, according to Bloomberg. Now the tables would be turning. Although many Venezuelans continue to leave the country for Europe, those who went to other countries in South America are beginning to return.
Now, this trend has begun to change and take a completely opposite form, a movement that is in the making, but has already returned tens of thousands of Venezuelans to their homes.
This is such an unexpected twist that even Venezuelans waving at those returning find it hard to believe. On the one hand, the pandemic has been particularly cruel to migrants scattered around the world. Jobs are scarce and xenophobia is rising fast. Meanwhile, at home, the economy has stabilized – against all odds.
Free market reforms
After years of failed interventionist policies that reduced this nation’s GDP to a fraction of what it once was, socialist leader Nicolás Maduro has carried out a series of free-market reforms that are starting to drive growth.
It is a major victory for Maduro, a ruthless authoritarian ruler who has resisted sanctions similar to those imposed on the regime of his close ally Vladimir Putin in the past two weeks. The Biden Administration sent a mission to Caracas last weekend to negotiate the possibility of lifting the sanctions. 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 these reforms and policies that are allowing the rebirth of Venezuela, but everything indicates that this change is the product of necessity. All over Caracas the signs are piling up: in the burgeoning apartment rental market; in increasing enrollment in private schools; the cars that once again 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.
Return to Venezuela
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 as he waited for lunch rush hour on a weekday in his small pizzeria near downtown Caracas. Rivas, 34, returned last year from the Dominican Republic, where he was also a restaurant manager, 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 rather workers who can suddenly afford to spend money to eat 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 done in the currency. this has played a crucial role in curbing hyperinflation and help Venezuelans recover some of the purchasing power they have lost.
Another example is that of Barreto, who left Caracas during the worst moment of the economic crisis. At that moment, I barely earned the equivalent of 50 dollars a month as a taxi driver. He landed in Lima, where he quickly got a job at a store that printed t-shirts. He earned about $350 a month. Then the pandemic hit, he lost his job and went on to sell candy on the street. He went back to earning about $150 a month and, he said, he felt 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 350 dollars he earned 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 has GDP stopped contracting (Credit Suisse forecasts a second year of growth in 2022), but inflation has plummeted from a peak around 2,000,000% a few years ago. Prices are still growing very fast, but the decline has allowed families and companies to have a little more certainty.
The situation is still critical
For clarity, it is a stabilization only after years of catastrophic declines that left millions of people living in precariousness. 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 drastically: The migratory flow decreased 60% compared to 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 come back, that’s clear,” says 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).
No country has received more migrants than Colombia. Some 1.8 million have relocated there, destabilizing the order established for decades, when it was Colombians who crossed the border into Venezuela, a country that was much richer, in search of work.
Venezuelans who left for Colombia mostly found jobs in 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. In Chile, the annual inflation rate has more than doubled in the last two years to 7.8%. In Brazil it rose 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 #NoEsImmigracionEsINVASION It’s been trending on Twitter lately. And in Trinidad, a small island a few miles from Venezuela, the Coast Guard recently opened fire on a boat full of migrants.
Sensing this change in trend, 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!”
Behind this recovery is also the rise in the price of oil, which has allowed the Venezuelan industry to resume part of its operations. The Venezuelan oil industry has been losing production capacity for years due to lack of investment in the face of falling oil revenues, as a result of the drop in crude oil prices.
Now oil is trading above $100 again, while the US is negotiating to lift sanctions and start buying Venezuelan crude. All this amalgamation of factors has generated extreme optimism in Venezuela that is helping many of its emigrants return to the country, a nascent trend that has yet to solidify.
The trend that invites optimism: is Venezuela experiencing the end of its hyperinflation?
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