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Travel restrictions crimp shopping sprees

Venezuelans must now tell the government where they are traveling and what they are buying.

For travelers who can’t get permission to buy currency at the pegged exchange rate, the only other option is to go to a parallel, unofficial market. It’s a notoriously opaque system where people rely on blogs and Twitter accounts to find out the current exchange rate.

"What they are trying to do is keep us here," said Ivan Lenin, a 32-year-old electronic engineer, before boarding a flight this month from Caracas to Sao Paulo for a business meeting. "All the bureaucracy is getting too cumbersome."

Many in Venezuela’s middle class see the rules as another tool to increase control for a power-hungry government. The restrictions allow Chavez, who has become notorious for attacking the private sector through government nationalizations and property seizures, to more efficiently use access to dollars as a political tool.

The president says that only food and medicine importers will be given priority in receiving dollars at the official exchange rate, forcing individuals to buy dollars on the unregulated, parallel market, and driving up the cost for imported goods and international travel by 180 percent.

The increased difficulty in obtaining currency hurts Venezuela's small business owners, who don’t have the time or the government connections to navigate through the bureaucracy required to buy currency.

"I travel for my business, but I’ve already had to buy dollars in the parallel market, because official dollars practically don’t exist," said Uzgategui, the clothing storeowner.

The reduction in the travel allowance to Colombia, the U.S.’s staunchest ally in Latin America, is the most drastic. Venezuela is Colombia’s second-biggest trading partner, and commerce between the two countries has already suffered since topping out at $7 billion in 2008. Chavez announced plans in July to "freeze" ties with the neighboring country.

Chavez, who regularly praises former Cuban President Fidel Castro and openly campaigns to implement socialism in his OPEC-member country, may be imposing the new restrictions out of necessity, not just for political reasons, said Jose Manuel Puente, a professor of public policy and political economy at the Instituto de Estudios Superiores de Administracion, a Caracas business school.

Exports have fallen by half in the first nine months of the year, according to figures published by the central bank, whacked by a combination of lower prices, declining oil fields and OPEC-mandated production cuts.

"The government doesn’t have enough petro-dollars for the high demand that exists," Puente said. "What they’re creating is a system of rationing of dollars."

http://www.globalpost.com/dispatch/venezuela/091216/shopping-sprees-travel-restrictions