June 21, 2019-Money transfers into Venezuela from friends and family living abroad are primary means of survival for those left behind in the dire circumstances of economic collapse, according to economic data and on-the-ground reporting by The Indigo Traveller.
Economic Snapshot of Venezuela
Since 2014, the Venezuelan economy has been in free fall. In terms of economic size, its GDP shrunk from $324 billion in 2015 to $76 billion (projected) for this year. It started shrinking in 2014 with a decline of nearly 4 percent. The past two years, the economy decreased by more than 15 percent a year.
Meanwhile, inflation has skyrocketed — by 10 million percent projected for this year alone.
That leaves residents dealing with food shortages, blackouts, unemployment, health issues and a fuel crisis.
Life Amid Economic Collapse
With salaries as low as $6 a month and no ability to use credit cards to pay for goods, most people have to rely on someone outside the country to send them money for basic living expenses.
“You can imagine how hard it is to live here. You have to find a way,” said Lenny Ruiz, a local resident and photographer, in an on-the-ground interview with The Indigo Traveller. “Almost everybody here has at least one entrance of dollars from the outside.
Migration Outflows, Money Inflows
Today, more than 3.4 million Venezuelans live abroad, according to the World Bank. About 2.7 million people left the country since the economic collapse in 2015. That leaves about 28 million people behind. Those who have stayed rely on money transfers from abroad to survive.
Migrant Outflows: In 2018, more than 414,570 Venezuelans were seeking asylum. Others found new residency under temporary permits, labor visas, humanitarian visas or visas permitted under regional agreements. Many of them resettled in other Latin American countries, including Peru, Columbia, Argentina, Chile, Brazil, Ecuador and Panama.
Money Inflows: According to the Council on Foreign Relations (citing a Venezuelan consultancy Econoanalitica), as much as $4 billion will flow into the country this year. In her CFR article, Shannon O’Neil asserts that “add in another $1.5 billion in withdrawals from foreign bank accounts, and remittances will likely surpass oil dollars returning to the South American nation.”
O’Neil says some of that money “ends up directly in the regime’s pockets.”
Remittances in Latin America
Still, foreign money heading into Venezuela is minimal compared to that flowing into neighboring countries.
Overall, remittances to Latin America and the Caribbean countries increased by 9.5 percent last year. Of the $88 billion crossing borders in 2018, Mexico received the largest share, $35.7 billion. Guatemala, the Dominican Republic received the second and third largest shares, $9.6 billion and $6.8 billion.
Political Crisis Continues
Meanwhile, Venezuelan opposition leader Juan Guadio met with Michelle Bachelet, a top human-rights official from the United Nations, about the political situation. According to a news report by the CBC, Guaido asked for the commission’s help in expelling Nicolas Maduro, Venezuela’s president, from power.
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Sources include the World Bank’s KNOWMAD report on migration and development published April 2019. See more travel videos from The Indigo Traveller.
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