Published by WLRN
Every day thousands of Venezuelans are fleeing their country to escape the worst economic collapse in the world today. Many have come to South Florida. Venezuela’s GDP is sinking so deep, and its hyperinflation is rising so fast, it’s hard to keep track of exchange rates, food prices, minimum wages, foreign reserves and other critical economic indicators. And the authoritarian socialist regime is trying to keep a lot of that embarrassing data hidden.
But new computer and Smartphone apps are bringing it to light. One of them is Venezuela Econ. It was created by British journalist Girish Gupta of Reuters. He’s been based in Caracas since 2011. WLRN’s Tim Padgett spoke with Gupta by phone about why he plans to leave journalism now and pursue his app venture full time.
WLRN: When you arrived in Venezuela seven years ago, it was still considered one of South America’s richest countries because of all the oil wealth there at the time. But since then, oil prices have collapsed and socialist policies have made the situation even more tragic. You’ve chronicled the humanitarian crisis caused by food and medicine shortages. What are some of the worst things you’ve seen?
GUPTA: It’s horrible, some of the things I’ve seen here. Thousands of people lined up outside supermarkets for rice; mobs fighting for bags of pasta. Or, I’ve been in people’s homes – what’s in their fridges? – and the answer is nothing. I remember professionals earning a dollar, two dollars, three dollars a month, and not being able to feed their kids. People – people that I know – are growing skinnier. They’re asking me for loans of a dollar, two dollars, $10, which they’ll pay over a month.
It’s incredible what we’re seeing here, and it’s getting worse day by day.
READ MORE: Yes, Venezuela Is On the Brink of Default. No, That Doesn't Mean Regime Change.
You’ve said this project started as an effort to make sense of Venezuela’s multiple and chaotic currency exchange rates. How did it evolve into the full blown Venezuela Econ app?
I came here with no knowledge or interest whatsoever in economics. But I studied physics; I do have a background in numbers and math. So I just wanted to understand the bolivar – that’s the local currency here.
There’s this official exchange rate that’s utterly meaningless, unless you have access to it, which very few people do. And then there’s this black market rate. And the spread between them is phenomenal. The official exchange rate is 25,000 bolivars per dollar – and the black market rate is 250,000 bolivars per dollar. The money that you can make if you’re playing with both – you can flip money and make millions very, very quickly, very easily.
Right – and that’s really the root of the corruption catastrophe in Venezuela.
Absolutely. And so I thought, hey, let’s write some code, and get this code into my own databases and put it out there in a nicer way so people like me can actually understand what’s going wrong with this economy.
And it very quickly got thousands of users. And I’m now starting to see some value in it, both monetarily, in that people on Wall Street and so on are curious, and also for Venezuelans. I’ve still got that journalistic ideal of wanting Venezuelans to understand this a little bit better.
I see it even tracks things like the number of Venezuelans applying for asylum abroad – and flight data, presumably for helping them get out of the country. What’s the most important information Venezuela Econ offers?
Yeah, money supply – the amounts of money the government is printing at absurd rates at the moment is very important. It’s going up maybe 7, 10 percent every week. Compare that to the United States, where it’s 7 percent every year.
That’s obviously fueling inflation. If you’d bought a million dollars’ worth of bolivars 15 years ago, it would now be worth just seven dollars. Imagine what that means for the money in people’s pockets.
How are you digging up the real-time information the app offers when the regime’s information is so opaque?
The government stopped publishing inflation and GDP data a long time ago. However, what I’m seeing is there’s people in the Central Bank who are smart and do want to show what’s going on. So they’re using other indicators, things like money supply. I’m also getting data from other sources. There’s a lot of NGOs and activists here who are collecting information, and that’s extremely valuable.
What sort of difference do you hope this app can make?
The government here always blames the United States, blames an economic war that’s being waged against it. But the numbers don’t really suggest that. So ultimately I want to show that this is government policy that’s behind what’s going wrong.