Haircut for bananas, taxi rides for carton of cigarettes: How Venezuela is dealing with collapsing economy

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Published: July 5, 2018 7:55:08 PM

In Venezuela, there are Facebook pages and chat-room groups devoted to the swap-ability of everything from toothpaste to baby formula to deal with collapsing economy.

Haircut for bananas, taxi rides for carton of cigarettes: How Venezuela is dealing with collapsing economyThere are Facebook pages and chat-room groups devoted to the swap-ability of everything from toothpaste to baby formula.

About three months ago, news reports from economic-crisis hit Venezuela said that a cup of coffee would have costed an entire month’s salary as the local currency, Bolivar, lost its value due to a steep hike in inflation. Now, Venezuelans are using the barter system to survive. Bloomberg reported that amid the collapsing economy, the Venezuelans are bartering bananas for haircut and carton of cigarettes for taxi rides.

There are Facebook pages and chat-room groups devoted to the swap-ability of everything from toothpaste to baby formula. A barber in the countryside cuts hair for yuccas, bananas or eggs. Moto-taxi drivers will get you where you need to go for a carton of cigarettes, Bloomberg said.

The Venezuelan crisis is similar to Zimbwabe where the inflation was estimated at 79.6 billion per cent in the mid-November 2008, following which it announced to switch to US Dollars, along with Britain’s pound and the South African rand.

While formal businesses in cities can get by on bank transfers and debit cards, such operations are largely out of the question in rural areas such as Rio Chico, population 20,000, a report by Reuters said. The rise of barter exchange, amid hyperinflation and a dearth of cash, is a reflection of how the once-prosperous country is reverting to the most rudimentary of mechanisms of commercial exchange.

“It’s a very primitive payment system but it’s also very primitive for a country not to have enough cash available,” said economist Luis Vicente Leon of consultancy Datanalisis.

Once one of Latin America’s wealthiest countries, Venezuela’s economic collapse under President Nicolas Maduro’s government drove nearly one million people – 3% of the population – to emigrate between 2015 and 2017.

Maduro, reelected to a fresh six-year term in May in elections condemned by the United States, blames spiraling consumer prices and constant shortages of food and medicine on an “economic war” led by the opposition and Washington.

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