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Venezuela - Economy

The socio-economic situation continues to affect economic and social rights. According to ECLAC, the economy contracted by 25.5 percent in 2019, amounting to a cumulative GDP loss of 62.2 percent since 20131. Although there has been a noted improvement in food supplies in recent months, only a minority of the population, with access to foreign currency, can regularly afford the high food prices due to hyperinflation, and de facto dollarization of the economy.

Although the Government decreed in October a 375 percent increase in the minimum wage, its purchasing power in terms of the basic food basket has declined by 72.5 percent since the beginning of 2019. The minimum wage currently only covers 3.5 percent of the basic food basket. Financial institutions’ over-compliance with recent economic sanctions continues to negatively impact the economy and public services at all levels. There is a need for greater official, detailed information to determine the precise extent of the impact of the sanctions on the implementation of social programs. Failures in public services persist. The State of Zulia is among those particularly affected. My staff have carried out a visit to Maracaibo and witnessed extremely long lines to buy fuel, and the recurring and prolonged electricity outages, which also impacted the water supply. The rights to health and education have also been affected, primarily due to lack of personnel, infrastructure deficiencies, and lack of supplies. Thousands of people from Zulia have migrated abroad or to the country’s capital.

During the month of November 2019, Caritas reported that in the poorest parishes of 19 States of the country, 11.9 percent of boys and girls receiving assistance showed signs of acute malnutrition, an increase of 56 percent in comparison with 2018, and that 32.6 per cent have delayed growth. Caritas also reported that 48.5 per cent of pregnant women treated were suffering nutritional deficiencies. According to the Venezuelan Observatory of Social Conflict, 16,439 protests have been registered in 2019. 4,433 protests have been registered in the last three months – most of them led by professionals engaged in education, health, and industry, protesting poor working conditions and the lack of supplies and basic equipment in schools and hospitals.

The Economic Debates Unit of the Latin American Geopolitical Strategic Center (CELAG) released a report on "the economic consequences of the boycott against Venezuela," on 08 February 2019, in which it is demonstrated that the "international financial blockade to Venezuela since 2013 is the main responsible for the economic crisis." According to CELAG's report, the financial and economic measures that were mainly promoted by the United States, and enforced by its allies, could have cost Venezuela around US$350 billion "in the production of goods and services between 2013 and 2017."

Venezuela is a country that enters the global market mainly because of its oil production. This "productive specialization led to a high dependence on imports," which are normally paid with the income of exporting oil. "That is why the financial and commercial boycott of Venezuela has much more serious consequences than in diversified economies."

Venezuela floats on a sea of oil. It was the world’s fifth-largest oil exporter in 2000. The price was only $30 a barrel, but oil made up 85% of the country’s exports. And over the following seven years, the country enjoyed a bonanza, as the price of oil rose nearly five times. Social programs used nearly half the country's budget (obtained largely from oil royalties) to benefit low-income citizens. Then Chávez put a leftist professor in charge of the oil industry. And in 2015 the price of oil collapsed. The price drop from $88 a barrel in 2014 to $35 a barrel in May 2016 saw the government’s revenue slashed. In 2017 Venezuela’s oil export revenues of $31 billion accounted for about 98 percent of export earnings. By 2019 Venezuela pumped just a third of the 3.5 million barrels a day it did when Hugo Chavez took power in 1999. The US imported less than 500,000 barrels a day of Venezuelan crude and petroleum products in 2017, down from more than 1.2 million barrels a day in 2008.

The ongoing crisis in Venezuela will continue to take a toll on the country's economy, resulting in accumulated GDP losses of more than 50 percent since 2013, the International Monetary Fund projected on 25 January 2019. "Real GDP is projected to decline further in 2019, bringing the cumulative decline since 2013 to over 50 percent," the IMF said in its newly published Regional Economic Outlook for Latin America and the Caribbean. The IMF cited plunging oil production and worsening conditions in the non-oil sector as the primary reasons for the country's GDP decline. The IMF also projected a new wave of hyperinflation, as well as another surge in outward migration.


The once wealthy oil-producing nation of Venezuela has been struggling for years from an unrelenting rise in inflation, shortages of food and medicine, and declining oil production. Venezuela's real GDP was projected to fall by about 18 percent in 2018. The decline was driven by a significant drop in oil production, widespread micro-level distortions and large macroeconomic imbalances. Venezuela's economy would have seen a 50 percent contraction over the course of the past five years, putting it among the world's deepest economic falls in six decades.

Venezuela's real GDP is projected to fall by about 18 percent in 2018. The decline was driven by a significant drop in oil production, widespread micro-level distortions and large macroeconomic imbalances, Werner explained. If true, Venezuela's economy would have seen a 50 percent contraction over the course of the last five years, putting it among the world's deepest economic falls in six decades.

As of July 2018 the IMF foresaw in coming years a double-digit contraction of output, and it increased the assessment of the degree of contraction in the most recent round. The iMF saw a hyperinflation that was rivaled only by Zimbabwe and the great historical hyperinflations of the interwar period. So, it is "very hard to exaggerate the extent of disruption in the Venezuelan economy".

President Nicolas Maduro announced 22 March 2018 that new bills will be put into circulation in Venezuela, slashing the denominations by three zeros. "I have decided to remove three zeros from the currency," he said, highlighting a new 50 bolivar bill to replace the 50,000 bolivar notes put into circulation in 2017.

The newly printed currency did little to stop hyperinflation in Venezuela. Businesses are closed, as they attempt to work out what to charge for goods, after the currency was devalued by 95 percent in mid-August 2018. And the prices of goods available for sale were already going up. There is a new currency, the Sovereign Bolivar, which removed five zeroes from banknotes. It is backed by a cryptocurrency, the Petro, that is pegged to the price of oil. The government is also raising the minimum wage by 3,000 percent, raising taxes, and increasing petrol prices for some drivers.

The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods (health care, electricity, water, transportation, and security) as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries/ Millions of Venezuelans fled their country to escape President Nicolas Maduro's dictatorial regime. As refugee numbers had grown, by mid-2018 countries such as Peru, Ecuador and Brazil were trying to limit migration flows.

Each day 30,000 to 40,000 people crossed the 315-meter-long (1,000-foot-long) Simon Bolivar bridge between Venezuela and Colombia. Most Venezuelans come to Colombia to stock up on basic food stuff and medicine. It is cheaper there than in their own country, where inflation has spiraled out of control and made the Bolivar, Venezuela's currency, nearly worthless. Some 3 million citizens were thought to have permanently migrated to Colombia.

The International Monetary Fund reported on 18 August 2018 that Venezuela's crippling inflation could top 1 million percent by the end of the year, as its economy continues to worsen. The South American nation finds itself in a political and economic crisis that has led to more than a million fleeing the country since 2015.

Oil-rich Venezuela has always paid its debts - even at the expense of its citizens. But Venezuela is officially in default, which meant it's officially bankrupt. Rating agency Standard & Poor's declared the nation in 'selective default' on 20 November 2017 after it failed to make $200m in repayments for global bonds due in October. As more payments are due, Venezuela faced what could be a messy financial unravelling. And that's not a good situation for its starving population as state assets may have to be sold off to pay credit holders.

One of the key hurdles for the restructuring is US financial sanctions which prevent US investors from participating in any restructuring or refinancing deal ... and that's why we think the restructuring and refinancing is likely to fail in the current environment," said Edward Glossop, an emerging markets economist at Capital Economics in London.

Venezuela's economy that is clearly going through a process of very important decomposition. Venezuela was the economy of the region which has the largest negative growth rate and economic contraction for the second consecutive year, third consecutive year of economic contraction, the highest inflation in the world. The IMF reported in October 2016 that Venezuelan inflation was expected to rise nearly 500 percent in 2016 and accelerate into 2017 as the government printed money to pay its debts. In the 12 months through December 2017, prices could rise 2,200 percent, it said. "If current policies continue, [Venezuela] faces severe risks, including of an even larger collapse in economic activity accompanied by hyperinflation... That could, in turn, trigger a wave of migration to neighboring countries."

Thousands of Venezuelans streamed across the border into Colombia 10 July 2016 to purchase essential goods that have become impossible to find or purchase in their home country because of a severe economic crisis that has caused critical shortages. Many drove hours to take advantage of the 12-hour opening of the border between Tachira, Venezuela and Cucuta, Colombia. Venezuelans were able to stock up on items in Colombia that have become almost impossible to find or afford in Venezuela, like flour, oil, toilet paper, shampoo and medicines. In August 2015, Venezuelan president Nicolas Maduro closed about 100 kilometers of the border between Ureña and San Antonio del Tachira after an ambush in which three Venezuelan soldiers and one civilian were injured.

On 12 July 2016 Venezuelan President Nicolas Maduro greatly expanded the duties of his military chief General Vladimir Padrino to make him responsible for the distribution of food and medicine and put the military in charge of overseeing five of the country’s major ports. As the crisis-plagued country slides deeper into an economic crisis, Maduro created a new campaign to root out the corruption and mismanagement that has caused Venezuela to run out of many basic goods. Maduro put Army Gen. Efrain Velasco in charge of the port authority, which will directly oversee five of the country’s main ports at Guanta, La Guaira, Puerto Cabello, Maracaibo and Guamache.

Venezuela's economy in 2015 was the worst performer on the planet, with a 10 percent plummet in GDP, according to the IMF. Shortages and inflation have become top concerns among Venezuelan voters, many of whom spend hours each week waiting in line for goods that are increasingly impossible to afford. The economy was expected to contract in 2016 for the third consecutive year. Venezuela's economy shrank 5.7 percent in 2015, with the private sector contracting over eight percent.

The International Monetary Fund estimated that inflation in Venezuela, which is already the world’s highest, would soar to 720 percent in 2016. Venezuela's previous bout of inflation in the mid-1990s saw prices rise just over 100 percent annually.

Enormous subsidies for consumer goods helped sustain the Socialist Party since the era of late president Hugo Chávez. Public policies have turned Venezuela into the country with practically the cheapest products in the world. Critics of the Socialist administration blame inflation on government spending without sufficient revenues, flooding the economy with currency.

Minister of Electric Power Luis Motta Domínguez announced on 21 April 2016 that “every client” of CORPOELEC, which just so happens to be the entire country, will have to do without 4 hours of energy every day for at least the next 40 days. With this plan, the Maduro administration aimed to “slow down” the consequences of the decreasing water levels that feed the Guri hydroelectric plant, which generates 70 percent of electricity in Venezuela.

When the Maduro administration began rationing electricity, leaving entire cities in the dark for up to 4 hours every day, discontent gave way to social unrest. On 26 April 2016, people took to the streets in three Venezuelan states, looting stores to find food.

On May 02, 2016 Venezuela pushed its clocks forward a half hour to save power. President Nicolas Maduro ordered the change to deal with the country's chronic shortage of electricity. Jorge Arreaza, Venezuela's science and technology minister, said the change would reduce the night-time use of lighting and air conditioning. The government initiated a packet of changes designed to save electricity, including rolling blackouts, a two-day public sector work week, and schools closed on Fridays.

The half-hour time change that was one of the signature measures of former president Hugo Chavez's idiosyncratic 14-year rule. Chavez turned Venezuela's clocks back 30 minutes in 2007 so that children could wake up for school in daylight.

In Venezuela, longstanding policy distortions and fiscal imbalances were already having a deleterious effect on the economy before the collapse in oil prices. These problems worsened as falling oil prices triggered an economic crisis, with an expected fall in output of almost 18 percent over 2015 and 2016 (the third sharpest decline in the world). A lack of hard currency led to scarcity of intermediate goods and to widespread shortages of essential goods—including food—exacting a tragic toll. Prices continued to spiral out of control, and inflation was expect to rise to 720 percent in 2016, from a world-high inflation of about 275 percent in 2015.

The Central Bank of Venezuela (BCV) released new economic figures 16 January 2016 showing what it said was the impact of an “economic war” aimed at destabilizing the country. The data showed the country's GDP contracted by 4.5 percent in the first nine months of the year, with a 7.1 percent drop in GDP in the third quarter from the previous year. It had been shrinking for seven consecutive quarters going back to the start of 2014.

The BCV report found Venezuela's inflation rate hit 141.5 percent in 2015. Some of the highest price rises were reported in food costs, which rose by 55.7 percent in the third quarter. Food goods are among the most smuggled and hoarded products in Venezuela. “Venezuela is suffering a new generation economic war,” the bank warned.

More than half of Venezuela's inflation is being caused by currency manipulation, the country's central bank said. “Preliminary estimates find … close to 60 percent of inflation registered in 2015 is the result of foreign exchange incidents, associated with the exaggerated depreciation of the Bolivar (currency),” the Central Bank of Venezuela (BCV) said. The bank specifically referred to “websites” that have played a key role in currency “distortions.” The BCV also pointed to other efforts to “destabilize” the economy, including broader currency speculation and product hoarding and smuggling.

The president announced the implementation of an “economic emergency” decree. The “economic emergency” involved making resources from the 2015 financial year available, assigning extra funds to health, education, food, and housing; designing and implementing measures to prevent tax evasion; and giving the executive the “authorization to address the causes of the current situation.”

The measure also allows the administration special temporary powers to boost production and ensure access to key goods, including taking over private companies' resources, imposing currency controls and "other social, economic or political measures deemed fitting."

Thanks to unprecedented spending on social programs, extreme poverty was cut to 4.9 percent from 21 percent when Chavez took office in 1998. One of the reasons the government enjoys strong support from low-income and working class Venezuelans is precisely the very real impact government policies had on their quality of life.

Venezuela's rate of extreme poverty continued to decline despite what the government has described as an “economic war,” according to new figures released 17 January 2016. Approximately 4.78 percent of Venezuelans now live in extreme poverty, according to the latest official statistics. That figure is slightly lower than those reported in November 2015, which put the extreme poverty rate at 4.9 percent. When Venezuela's socialist government first came to power in 1998, 21 percent of Venezuelan households suffered extreme poverty.

While opposition leaders often blame a lack of foreign exchange, price controls, and a fiscal deficit as the primary causes for the shortages, the Venezuelan government has claimed that economic sabotage by the private sector, speculation and smuggling of goods to Colombia are more to blame.

With inflation reaching an unprecedented 160-200 percent for 2015, nearly constant long lines at subsidized supermarkets, and sporadic shortages of many consumer goods, the entire population – whether Chavista, opposition sympathizers, or “ni-ni” (neither one side nor the other) – was frustrated with the situation. While the Maduro government said that the problems were the result of an economic war that is being waged against the government, the opposition argued that it is government economic mismanagement that was to blame.

Venezuela confirmed in late December 2014 that it had entered a recession while inflation remained the highest in the Americas. President Nicolas Maduro's socialist government blamed political foes for the dismal data. The Central Bank said GDP contracted in each of the first three quarters of 2014, by 4.8 percent, 4.9 percent and 2.3 percent. Twelve-month inflation reached 63.6 percent in November 2014.

Brent crude prices fell below US$60 per barrel on 16 December 2014 for the first time in five years. Venezuela was badly affected as oil makes up 96 percent of its export earnings. Many financial watchers warned that the Latin American country was pushed to the brink of default on its debt. Venezuelan benchmark soverign bonds were trading at just over a fifth of its face value.

While Venezuela is a rich country and claims to have the world's largest oil reserves, the economy suffered from hyperinflation and shortages of basic goods, due in part to the restricted government exchange rate. Venezuela’s main economic problem is that the country, including the oil industry, is producing less, and the government is printing more money to cover its growing debts.

Political and economic uncertainty, state intervention in the economy, and a volatile legal and regulatory framework made Venezuela a difficult climate for foreign investors. President Hugo Chavez’s Second Socialist Plan for 2013-2019, embraced by his governing United Socialist Party of Venezuela (PSUV), calls for increased state intervention in the economy and further development of state-owned enterprises and socialist communes as public-sector economic institutions. The government’s project of institutionalizing “socialism for the 21st century” in Venezuela emphasizes state-led economic activity, and relies on heavy, if uneven, regulation of the economy.

The state oil company, PDVSA, controls the petroleum sector. Government companies control the electricity sector and important parts of the telecommunications and media sectors. In 2008, the government nationalized cement and steel producers, as well as select companies in the milk and meat distribution sectors. In 2009 it nationalized assets in the oil (including assets owned by US oil services companies), chemicals, tourism, agribusiness (including a processed rice plant owned by a U.S. company), retail, and banking industries.

The Venezuelan National Assembly passed legislation in 2010 designed to create a communal state and economy, privileging public-sector economic institutions and reducing the space for private-sector participation. Five “popular power” laws sought to incorporate socialist communes into policymaking at all levels of government, discounting consultation with the private sector in the regulatory process: the Organic Law of Popular Power (Gazette No. 6.011, 2010); the Organic Law of Public Planning (Gazette No. 6.011, 2010); the Organic Law of Communes (Gazette No. 6.011, 2010); the Organic Law of the Communal Economic System (Gazette No. 6.011, 2010); and, the Organic Law of Popular Municipal Power (Gazette No. 6.011, 2010).

In 2010, the government nationalized companies in the agricultural and construction sectors as well as U.S. assets in the petrochemical and packaging industries. A number of U.S. companies whose assets have been nationalized in Venezuela have chosen to pursue their claims through international arbitration. Threats of continuing nationalizations, as well as other threats to property rights and an uncertain macroeconomic environment characterized by high inflation and foreign exchange controls, have led to reduced space for the private sector and low levels of private investment.

On August 17, 2011, President Chavez announced his government’s decision to relocate all of Venezuela’s international reserves that were deposited in US and European financial institutions. This included 211 tons of gold reserves to be transferred to the Central Bank of Venezuela and $6.28 billion in cash reserves to be transferred to banks in Brazil, China, and Russia.

By June 2013 a Venezuelan state was testing a system to limit purchases of food and other staples, in a move that officials defended as necessary to stop contraband trade but opposition critics slammed as Cuban-style rationing. The state of Zulia in western Venezuela said it would launch a pilot program that uses a digital system to block shoppers from buying the same staple products at different stores on the same day. The OPEC nation's consumers for months had to endure long lines or visit several stores to find basic products that run the gamut from toilet paper to butter, driven in part by a lack of hard currency to ensure imports.

At first, the government tried to counter capital flight by intervening in the currency market, using its dollars to purchase the bolivar, in order to keep its price stable. However, this caused the central government to lose dollar currency reserves precipitously and so it abruptly changed gears and introduced a fixed exchange rate in March of 2003. Ever since then, the currency has been fixed and adjusted very rarely. Only those who met government conditions to buy dollars with bolivars are allowed to do so.

All requests for foreign exchange at the official exchange rate must be approved by the National Exchange Control Administration (CADIVI), and the Central Bank (BCV) completes all legal purchase and sale of foreign currency. On December 30, 2010 the government set the official exchange rate at 4.3 bolivares per dollar. An alternative exchange market, called the Transaction System for Foreign Exchange Denominated Securities (SITME), is accessed through authorized Venezuelan financial institutions and operates by means of a bond-swap mechanism through the Central Bank. The SITME exchange rate has averaged 5.3 bolivares=U.S. $1 since transactions began in June 2010. Any other foreign exchange transactions are not legally permitted, although a black market is reported to exist. Central Bank international reserves were US $29.4 billion at the end of September 2010.

The black market exchange rate shot up from about 8 bolivars per dollar in 2011, and to 16 in 2012. While the official exchange rate was fixed at 6.3 bolivars per dollar since early 2013, the black market rate had reached three times that, at 18 per dollar. A vicious cycle thus began in early 2014, where an ever-widening gap between the official and unofficial exchange rates created ever-greater incentives to profit from that gap, thereby further widening that same gap.

In the midst of ongoing anti-government protests, in March 2014 the Venezuelan government introduced a new currency exchange system to reduce the soaring black market for dollars, which has contributed to food shortages and high inflation in the country. It implemented a new market-based currency exchange system called “Sicad 2” to sell dollars for eight to 10 times the official government-controlled exchange rate of 6.3 bolivars per dollar.

Raising the official exchange rate so that it is more in tune with the black market exchange rate and with the prices in neighboring countries would mean raising prices for products imported at the official exchange rate, thereby further stoking an inflation rate that is already far too high.

The strict controls on foreign currency fueled the country's soaring inflation and causing scarcity of needed items from food to beauty products. The country was struggling with South America's highest inflation rate. Basic products, from dairy products to wheat flour and diapers to toilet paper, had become increasingly hard to find in Venezuela, causing long queues and even scuffles in shops. When the local supplier of the specialty sacramental wine used at Mass had a bad harvest, the Catholic Church turned to importers, but the companies told them it was impossible to obtain dollars to bring the wine into the country because of Venezuela's strict currency controls.

Economy - Overview

The Venezuelan Government dominates the economy. There is considerable income inequality. The Gini coefficient was 0.39 in the second half of 2009. According to government statistics, the percentages of poor and extremely poor among Venezuelan households were 23.8% and 5.9%, respectively, in the second half of 2009. Real GDP contracted 3.3% in 2009, indicating a decrease in government expenditures and private consumption as a result of a drop in oil prices. The economic contraction continued in 2010 when real GDP decreased by 3.5% during the period January-June 2010 compared with the same period of 2009. The Consumer Price Index increased by 27.9% from September 2009 to September 2010, following increases of 25.1% in 2009, 30.9% in 2008, and 22.5% in 2007.

Despite political tensions between the United States and Venezuela, the United States remains Venezuela's most important trading partner. In 2009, bilateral trade topped US $37.4 billion. Venezuelan exports to the United States were US $28.1 billion (accounting for at least 42% of total Venezuelan exports), and U.S. exports to Venezuela were $9.3 billion (or 24.2% of total Venezuelan imports). The U.S. is the single most important customer for Venezuelan oil. Venezuela shipped an average of 1.1 million barrels of crude oil and petroleum products per day to the U.S. in 2009, a figure which accounted for at least half of Venezuelan oil exports and 10.9 % of US oil imports.

U.S. goods and private services trade with Argentina totaled an estimated $23 billion in 2012. Exports totaled an estimated $17 billion; Imports totaled $6 billion. The U.S. goods and services trade surplus with Argentina was $10 billion in 2012. Argentina was currently the 41st largest goods trading partner of the US, with $14.8 billion in total (two ways) goods trade during 2013. Goods exports totaled $10.2 billion; Goods imports totaled $4.6 billion. The US goods trade surplus with Argentina was $5.6 billion in 2013. Trade in private services with Argentina (exports and imports) totaled an estimated $8.3 billion in 2012. Services exports were $6.4 billion; Services imports were $1.9 billion. The US services trade surplus with Argentina was $4.5 billion in 2012.

Manufacturing contributed an estimated 15.4% of GDP in real terms in 2009, according to the Central Bank of Venezuela. The manufacturing sector remained hindered by a marked lack of private investment and a highly overvalued official exchange rate that inhibits exports and makes it difficult to compete against imports. Venezuela manufactures and exports steel, aluminum, textiles, apparel, beverages, and foodstuffs. It produces cement, tires, paper, fertilizer, and assembles cars both for domestic and export markets.

Agriculture accounts for approximately 4% of GDP, 10% of the labor force, and at least one-fourth of Venezuela's land area. Venezuela exports cigarettes, fish (primarily domestically raised crab and shrimp), tropical fruits, cocoa, and manufactured products. The country is not self-sufficient in most areas of agriculture. Venezuela imports about two-thirds of its food needs. In 2009, U.S. firms exported $967 million worth of agricultural products, including wheat, corn, soybeans, soybean meal, cotton, animal fats, vegetable oils, fruits, nuts, dairy products, processed fruits and vegetables, and other items to make Venezuela one of the top two U.S. markets in South America. The United States supplies roughly one-quarter of Venezuela's food imports.

Official statistics registered 6.6% unemployment at year-end 2009, although such figures do not account for workers in the informal sector of the economy, who constitute approximately half of the country’s total workforce. The public sector employs about 20% of the workforce. Only 12% of workers are unionized. Of those employed, a significant proportion work in the “informal” sector.

Labor unions allege the government repeatedly violates International Labor Organization (ILO) agreements on freedom of association and the right to organize and bargain collectively. Specifically, the constitution and laws permit undue influence in the internal elections of unions. The government has told the ILO it would correct the problem; draft legislation remains pending in the National Assembly.

Venezuela has an extensive road system. With the exception of air service, transportation has failed to keep pace with the country's needs. Much of the infrastructure suffers from inadequate maintenance. Caracas has a modern subway but only one functioning rail line serves the rest of the country. Venezuela’s ports, recently nationalized, do not currently match the country’s status as a trader. Venezuela’s importers and exporters complain of delays and high costs.

Venezuelan President Nicolas Maduro said 14 December 2016 that security forces had been deployed to banking facilities in the private and public sector in order to monitor the inventory of available bills of 100 bolivars. It is the country's largest-denominated bill and the most widely used. Maduro signed a decree 11 December 2016 establishing the end of the circulation of the 100 bolivars bill with the aim of stopping the extraction of the Venezuelan currency by criminal and right-wing elements that carry out illicit activities. According to Venezuelan authorities, the money is withdrawn through various NGOs — contracted by the U.S. Department of the Treasury — to stifle Venezuela's financial system. Through this operation, NGOs hired organized crime groups to extract tickets for which they paid between US$0.80 cents and US$1.30.

Venezuelans who had 100 bolivars bills could continue to use them in all their payments until they were out of circulation and would also have the possibility to exchange them at the public bank or deposit them in their accounts of any banking entity for 72 hours, beginning 13 December 2016. Presidential legal adviser, Elvis Amoroso, explained that at the end of the 72-hour period for the exchange, the Central Bank of Venezuela would open a period of 10 days to continue the exchange.

People working in the informal sector who keep their savings in cash talked gloomily at taxi stands and street kiosks. About one-third of Venezuelans don't have bank accounts, and so have no way to deposit the soon-to-be-worthless bills. The 100-bolivar note fell in value this year from 10 cents to 2 cents.

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