Водночас імпорт із Росії до ЄС зріс на 24%: напередодні нафтових санкцій країни ЄС різко наростили постачання нафти
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Like many Venezuelans, Carmen Mendoza has learned to get by with a patchwork of different income streams in different currencies – her pension, renting out a property, and roughly $150 per month her two daughters send from Spain.

But it is no longer enough.

Resurgent inflation is devouring the income of Venezuelans — even the relatively privileged ones like Mendoza who have access to U.S. dollars.

That is leaving them hungry and struggling to buy food and medicine, they told Reuters.

“Neither dollars or bolivars are enough. I can’t afford anything,” said 68-year-old Mendoza, who lives in Los Teques, the capital of Miranda state.

Hunger is a familiar specter in Venezuela, which suffered years of hyperinflation in the second half of the last decade, as the government of President Nicolas Maduro printed money to pay its debts amid a slow-down in oil prices.

Many Venezuelans were left to scour through garbage to find food, and millions fled the country to build new lives across South America and beyond.

Maduro relaxed currency controls in 2019, allowing a de facto dollarization. Combined with orthodox economic policies including limiting the expansion of credit, reducing public spending, and raising taxes, inflation fell to single digits for about a year.

But in late 2022, Venezuela’s consumer price growth began to accelerate sharply. As countries around the world have grappled with rising inflation in the wake of the coronavirus pandemic, Venezuela’s price growth has been spurred by growing demand for dollars, increased government spending, and weakening of the bolivar, prompting fears of a renewed era of hyperinflation.

Prices rose over 37% in December compared to the previous month, according to a non-governmental group of economists who calculate indicators in the absence of official data, and who estimated 2022 inflation at over 300%.

Even Venezuelans who benefited from dollarization through remittances or salary payments are being hit by the higher prices, while those earning in bolivars have seen their meager earnings decline further.

Since the start of this year, Yaselin Garcia, 32, has watched as groceries bought with the $20 she makes each week selling cigarettes and other items have dwindled to just 15 eggs, 3 kilograms of corn flour, some grains and some cheese.

“If I were earning in bolivars I wouldn’t be able to buy anything,” said the mother-of-four in Los Teques.

Monthly private sector pay averages $139 and public sector salaries are around $14 per month, according to the Venezuelan Observatory of Finances, while the average family grocery shop comes in at some $370 per month.

“Wage increases are lagging behind,” said economist Asdrubal Oliveros, director of local analyst firm Ecoanalitica. “The purchasing power of salaries paid in dollars has fallen.”

Oscar Lochunga, 66, sells vegetables at a street market in the capital, Caracas, but is seeing demand fall each week as people limit their purchases.

“Whether you pay in bolivars or dollars it is not enough,” Lochunga said, sitting in front of his stall.

Markets are full of food which few can buy, which pushes people to skip meals or rely on help from charities, said Ania Pulido, a nutritionist at advocacy group the Venezuelan Observatory for Food Security and Nutrition.

Money “which today got you 20 products by tomorrow won’t even get you…. half that,” Pulido said.

Some 50% of Venezuelan households live in poverty, according to a national poll carried out by the Universidad Catolica Andres Bello, and 41% of those polled said they skip one meal per day.

For Yusmary Tovar, 42, who cares for her 5-year-old daughter and her elderly mother, $80 in monthly earnings from cleaning houses and babysitting is no longer enough.

Tovar has a kidney problem and must use a catheter to urinate. The catheters’ high cost forces her to boil them in water and reuse them.

“You get ill just thinking about how to make it through one day to the next,” she said.
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When Moheidein Bazazo opened his Beirut mini-market in 1986, during some of the fiercest fighting in Lebanon’s civil war, he didn’t expect it to thrive. But several years later, he had shelves full of food and needed 12 employees to help him manage a bustling business.

Those days are over. Bazazo now mostly works alone, often in the dark to reduce his electric bill. Regular customers are struggling to make ends meet, and as they buy less so does he, leaving some shelves and refrigerators bare.

With the Lebanese economy in shambles and its currency in free fall, Bazazo spends much of his time trying to keep up with a fluctuating exchange rate. Businesses like his are increasingly leaning on one of the world’s most reliable assets — the U.S. dollar — as a way to cope with the worst financial crisis in its modern history.

“I once lived a comfortable life, and now I’m left with just about $100 after covering the shop’s expenses” at the end of the month, Bazazo said, crunching numbers into a calculator. “Sometimes it feels like you’re working for free.”

The Lebanese pound has lost as much as 98% in value since late 2019, and now most restaurants and many stores are demanding to be paid in dollars. The government recently began allowing grocery stores like Bazazo’s to start doing the same.

While this “dollarization” aims to ease inflation and stabilize the economy, it also threatens to push more people into poverty and deepen the crisis.

That’s because few in Lebanon have access to dollars to pay for food and other essentials priced that way. But endemic corruption means political and financial leaders are resisting the alternative to dollarization: long-term reforms to banks and government agencies that would end wasteful spending and jump-start the economy.

Other countries like Zimbabwe and Ecuador have turned to the dollar to beat back hyperinflation and other economic woes, with mixed success. Pakistan and Egypt also are struggling with crashing currencies but their economic crises are largely tied to an outside event — Russia’s war in Ukraine, which has caused food and energy prices to soar.

Lebanon’s woes are much of its own making.

As the country felt the impacts of the COVID-19 pandemic, a deadly Beirut port explosion in 2020 and Russia’s invasion Ukraine, its central bank simply printed more currency, eroding its value and causing inflation to soar.

Three-quarters of Lebanon’s 6 million people have fallen into poverty since the 2019 crisis began. Crippling power cuts and medicine shortages have paralyzed much of public life.

Currency shortages prompted banks to limit withdrawals, trapping millions of people’s savings. It’s led some in desperation to hold up banks to forcibly take back their money.

The damage of the last few years was magnified by decades of economic mismanagement that allowed the government to spend well beyond its means. The head of the country’s Central Bank was recently charged with embezzling public funds and other crimes.

The pulverized Lebanese pound fluctuates almost hourly. Though officially pegged to the dollar since 1997, the pound’s value is dictated now by an opaque black-market rate that has become standard for most goods and services.

Last month, its value fell from about 64,000 pounds to the dollar to 88,000 on the black market, while the official rate is 15,000. Making things worse for a country reliant on imported food, fuel and other products priced in dollars, the government recently tripled the amount of tax — in Lebanese pounds — that importers must pay on those goods.

This will likely lead to more price hikes. For small businesses, it could means selling products at a loss just minutes after stacking them on the shelves.

Dollarization could give the impression of greater financial stability, but it also will widen already vast economic inequalities, said Sami Zoughaib, an economist and research manager at Beirut-based think tank the Policy Initiative.

“We have a class that has access to dollars … (and) you have another portion of the population that earns in Lebanese pounds that have now seen their income completely decimated,” Zoughaib said.

The shift to a more dollar-dominated economy happened not by government decree, but by companies and individuals refusing to accept payment in a currency that relentlessly loses value.

First, luxury goods and services were priced in dollars for the wealthy, tourists and owners of private generators, who have to pay for imported diesel. Then it was most restaurants. And now grocery stores.

Caretaker Economy Minister Amin Salam said the Lebanese pound was “used and abused” over the past three years and that dollarizing grocery stores will bring some stability to fluctuating exchange rates.

As more people and businesses reject the local currency, the dollar gradually becomes the de facto currency. The lack of trust in the Lebanese pound has become irreversible, said Layal Mansour, an economist specializing in financial crises in dollarized countries.

“People are fed up with the fluctuation of the dollar rate, and having to spend lots of time changing it, so practically, on a societal level, it’s better to use dollars,” Mansour said. “This is the end of the Lebanese pound as we know it.”

Without a strategy to address the economy’s underlying problems, the government “is allowing this to happen,” said Lawrence White, an economics professor at George Mason University.

Dollarization means the Central Bank can’t keep printing currency that fuels inflation, and having a more reliable currency might create more confidence for businesses. But many people could be further squeezed if Beirut officially adopts the greenback as its currency.

Millions in Lebanon who tolerated the dollarization of luxury items may not respond similarly to groceries, whose prices were already surging at some of the highest rates globally.

Over 90% of the population earns their income in Lebanese pounds, according to a 2022 survey by the International Labor Organization and the Lebanese government’s statistics agency. Families that receive money from relatives abroad spend much of it keeping the lights on and covering medical expenses.

They would have to be paid in dollars to adequately adjust, which most businesses and employers, especially the Lebanese state, are short on.

Public school teachers have been on strike for three months because their salaries barely cover the cost of gasoline to commute. Telecom workers are threatening walkouts because their wages have not been adjusted to the Lebanese pound’s falling value.

Lebanon is nowhere near implementing the kinds of reforms needed for an International Monetary Fund bailout, such as restructuring banks and inefficient government agencies, reducing corruption, and establishing a credible and transparent exchange-rate system.

Zoughaib, the Beirut economist, said he fears the absence of sound policy and economic reforms means that dollarization will likely only deepen poverty, making it even more difficult for families to pay for health care, education and food.

Bazazo, the market owner, acknowledges that pricing in dollars will help him manage his finances and cut a small portion of his losses but worries it will drive away some customers.

“Let’s see what happens,” Bazazo said, sighing. “They’re already complaining.”
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As the Egyptian economy struggles against negative headwinds from many directions, some sectors appear to be performing well.

Ordinary Egyptians are buying lower-end merchandise as their purchasing power is eroded by inflation and the effects of Egypt’s weakening currency on the prices of imported goods.

President Abdel Fattah el Sisi told a gathering of international leaders several months ago that the Russia-Ukraine conflict was seriously affecting Egypt’s economy. Egypt buys most of its grain from Russia and Ukraine and the price of importing wheat for a population of more than 100 million people has gone up drastically.

David Butter, an economist at Britain’s Chatham House research group, told VOA that Egypt’s rocky economy has been affected by a large increase in external and internal debt, made worse by a succession of crises, including COVID-19, the Russia-Ukraine conflict and increases in U.S. interest rates that have aggravated capital outflows from the country.

“It’s a structural, fiscal deficit, big buildup of external debt, which is allied to large public debt, so there’s a whole lot of heavy burdens that the economy is carrying and it has depended on to get through this situation on having a sustained period of relatively high growth and improved balance of payments. So, as soon as one or two wheels fall off this rather unstable wagon, then they’re in big trouble,” he said.

Butter notes that Gulf states came to Egypt’s rescue by adding $13 billion in deposits to Egypt’s central bank after international investors pulled $14 billion out of the country last year. Gulf states and the international community have helped Egypt out of numerous economic crises in recent years, including a $3 billion IMF loan in December.

Egyptian political sociologist Said Sadek told VOA that Egypt has agreed to privatize large portions of its economic sector in the next few years and that Prime Minister Mustapha Madbouli just returned from a trip to Qatar, where he discussed investment opportunities in Egyptian companies.

“Devaluation is expected this month, with the hope that this would push Gulf states to buy Egyptian companies that are listed and that would generate a lot of foreign currency that the government needs to pay debt and interest on debt,” he said.

A shortage of dollars has caused Egypt’s central bank to raise interest rates and triggered a decrease in the value of the Egyptian pound, making prices rise, since the country imports 65% of what its citizens consume.

Many merchants like Abdou, a dry cleaner, said they are downbeat.

“The economy is terrible,” he said. “It’s a struggle to make enough to live on. Lots of people come to rummage through the merchandise,” he said, but that they don’t spend a lot of money because they don’t have a lot of money to spend.

Consumers have complained about how the crisis is affecting them. Jamila, a 45 year-old homemaker, buys chicken from a merchant who sells government-subsidized meat from a trunk along a large boulevard in the Cairo suburb of Dokki. She said that despite the subsidized prices, the meat is still too expensive.

While many people and businesses are struggling, others are flourishing. Jurgen Sterkau, who is the general manager of the Cairo Marriott in the Zamalek area, said that his hotel is completely full and that business has never been better.

“All the major hotels on the River Nile in Cairo,” he said, “are doing extremely well (right now), despite the previous setbacks of the Russia-Ukraine conflict, as well as COVID-19.”

Egypt also has prospects of increasing natural gas revenues from undersea fields.

Said Sadek points out that Egypt is the only country in the eastern Mediterranean that is capable of liquifying natural gas and sending it to Europe by pipeline, giving it a huge economic advantage over regional rivals.
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