Landing in Venezuela—and buying black market currency

February 2011—After flying south over miles of gorgeous turquoise ocean, punctuated by small fishing vessels glinting in the bright sun, we banked left. To my right appeared a huge, green outgrowth—a lush mountain falling into sandy Caribbean beaches and hidden bays. The ridge of the long Ávila mountain ran parallel to my flight path and the east-west coastline. I’d soon learn that the mountain is filled with macaws, monkeys, and waterfalls. At around ten thousand feet, perhaps a minute before landing, we were below the crest of the mountain. Buildings and cars came into view. And small dots splashed in the water and lay on the sand.

Then the veil began to lift. I saw a different picture of the country I was soon to inhabit:  crumbling infrastructure, both of run-down industry as well as residential buildings. I didn’t see luxury hotels with beachside pools, rather housing with faded, pro-government murals. The stunning ocean and mountain had done well to obscure Venezuela’s troubles.

The face of President Hugo Chávez greeted me as soon as I entered the airport, plastered on walls, celebrating his socialist revolution. “Homeland or death,” read one of many slogans in the revolution’s yellow, blue, and red branding—echoing the country’s flag. Chávez was a maverick who had used the country’s oil wealth to lambast the United States, earning him a global leftist fanbase, but who brought in policies that would eventually lead to a humanitarian crisis and the flight of one-sixth of the population. Still, in 2011, Chávez still held a significant chunk of the country’s thirty million inhabitants in the palm of his hand.

After entering as a tourist, I was greeted by a gruff man holding a piece of card with my name on it. Jackson Gómez was a former cop who led Reuters’ security and logistics. A friend working with Reuters had arranged the pickup. Jackson had an imposing build, rough demeanor, and a face whose scars weren’t caused by a slip of the razor while shaving. We’d get to know each other very well over the coming decade. For now, though, he didn’t speak a word of English and I didn’t speak enough Spanish.

Jackson wore a mischievous grin as he drove me along the highway, through a tunnel under the Ávila mountain, and into the slums and high-rises of Caracas. I wasn’t sure whether I should feel anxious or endeared towards him. His dashboard, though, had a sign that read PRENSA, PRESS, alongside the Reuters logo. While I was in no way affiliated with Reuters, I felt a tingle of pride to know I was at least with the right people. That, coupled with the fact that for the first time, someone else had paid for a flight and would pay for the hotel I was about to arrive at, led me to feel I was on my way.

I gazed out in wonder. I’d never seen so much propaganda. Chávez’s face and government slogans were plastered on the entrances to tunnels, on barriers between lanes on the highway, on billboards, on buildings, on the walls of slums. We drove through Plaza Altamira and I recognized the obelisk at its center from my previous trip more than two years earlier, during which we’d hurried down to the Altamira metro and got ourselves on a bus towards Angel Falls, the world’s tallest waterfall, instead of staying in this troubled city. Jackson dropped me off at a hotel I’d found. He asked for $35, which I gave him in greenbacks.

It was early and the hotel didn’t yet have a room ready for me. Shattered after the redeye, I rested in the lobby for a while before I got chatting to a buxom tour guide who was loitering there hoping for new clients. She offered to change my dollars into local currency.

Venezuela’s bolivar was named for Latin American independence hero and Chávez-idol Simón Bolívar, and, according to the exchange rate websites I’d used in Mexico and around the world, one dollar was worth a constant 4.3 bolivars. So the $100 in my pocket would get me 430 bolivars at an ATM. But this lady was offering me nearly double that—800 bolivars—and, while that was clearly better for me, I didn’t understand why and was immediately skeptical. In the hotel’s washed-out lobby, she explained that this was the black-market rate and pulled up a website on her phone called Lechuga Verde. Lechuga, she said, meant “lettuce,” and I knew verde to be the color green, so “Green Lettuce.” What? I changed my money with her as I needed some local cash regardless and, ultimately, 800 was better than 430. I’d work this out later.

Within a decade, I’d be an expert at what was going on here; I’d write and talk about it at great length, explaining how these numbers were key to understanding Venezuela’s hyperinflation and humanitarian crisis. I’d create the go-to software for people wanting the latest figures. I’d deal with smugglers, corrupt officials, and criminals who took advantage of the differences between multiple exchange rates to enrich themselves beyond their wildest dreams—and, like everyone in Venezuela with access to hard currency, I’d take advantage of them myself.

My flight had landed around 6 am so it was still early. With my two bags still with me, not trusting the hotel to take care of them, I wandered across Plaza Altamira, the site of the great obelisk, in order to find the apartment of Jorge Silva, a photographer I’d met in Mexico. It was impossible not to look north, and up, to the side of the majestic green Ávila mountain. On the other side of it was the sea I’d flown over. The square itself, pedestrianized and flanked by two major streets to its east and west, as well as another main road running along its southern side, was bustling. I noticed, however, that everything seemed a little grittier than it had been in Mexico.

Jorge’s apartment was in a wealthy district called Los Palos Grandes. Buildings there had names like Americana, Covent Garden, Houston, or Cristal Palace, something that harked to a wealthy American-European world, where many of Los Palos Grandes’ residents had studied or their children would go on to study. It was like Mexico City’s Condesa, and people here were known as sifrinos. It was a term I’d see Chávez use liberally to lambast his opponents. Most of the foreign correspondents lived here.

It was a relief to see Jorge at his window. I walked up to his apartment—cool, hip, and welcoming—and relaxed a little, dropping my bags to the ground and not having to keep an eye on them for the first time since leaving my apartment in Mexico the night before. After a cold drink, I explained what had happened with the money, nervous he’d tell me I should have received a better rate. The rate I’d been given was fine, he said, verifying it on that same Lechuga Verde website. I took a closer look on my laptop. The number “eight” was highlighted in the middle of the screen, and underneath it read, in Spanish: “Many people think that this is the price of the black-market dollar. There could be nothing further from the truth. This is the price of green lettuce in Caracas, Venezuela.”

Jorge laughed as I worked through the text with my imperfect Spanish before putting me out of my misery. “It is the black-market rate,” he explained, “but no one is allowed to publish it here.”

It dawned on me that this country was going to be both extremely difficult and extremely exciting to cover. That no one, not even journalists, could publish this all-important black-market exchange rate—and had to pretend that bolivars traded for 4.3 to the dollar—was telling of an authoritarian government, a troubled economy and, therefore, a fascinating story.

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In 1998, aged forty, Chávez won the presidential election in a landslide. Four years later, he would face a failed coup attempt himself and a strike by the country’s all-important oil sector, which hardened his resolve and pushed him to double down on socialist policies. The country’s elites and business leaders, as well as some of those who were more prophetic in the middle classes, were starting to realize that those policies may not be in their interests. They started pulling money out, which caused Chávez to institute currency controls in 2003 that pegged the bolivar to the U.S. dollar.

The U.S. dollar fluctuates against the euro based on supply and demand. Market forces dictate rates between them. The bolivar didn’t partake in that global dance, officially clinging tightly to the stability of one currency, the US dollar. From February 6, 2003, Venezuela’s government decreed that the bolivar would be worth 1.6 to the dollar and it would stay at 1.6, no matter what the market dictated. Anyone who wanted to convert bolívares to hard currency, such as the U.S. dollar, Euro or Colombian peso, would have to go through the government and get it at the 1.6 rate. That figure was shored up by the high price of oil, of which Venezuela has the largest reserves in the world.

Soon, the government was unable to provide enough hard currency, leading to the formation of a black market, in which people paid a premium for turning their bolivars into dollars. As time went on, people were willing to pay a higher and higher premium. This would push the value of the bolivar down, and eventually lead to hyperinflation.

For nearly twenty years, the government would repeatedly devalue its official exchange rate in a futile attempt to catch up with the black market, but it never caught up. And that’s how I had ended up exchanging $100 for 800 bolivars in my hotel lobby, far more than the government-decreed 430 I should have received. I and everyone else realized that to use the official rate would be madness; we’d be “losing” nearly half our money if we were to use an ATM. That huge difference meant that the black-market rate wasn’t cloak-and-dagger as the name suggests at all. It was the rate and everyone knew it—but, as I’d learned from Lechuga Verde, no one could openly publish it.

By the time I would leave Venezuela in late 2018, $100 could buy seventeen million bolivars.