Ingenuity: Parallel Economies to Survive Economic Crisis

Dear readers,

I know this is a question many of you want to see answered satisfactorily. I will do my best.

This article will delve into the somewhat out-of-the-ordinary, uncommon ways many Venezuelans turned to informal and innovative economic structures to secure food, medicine, and essential services. Below, you will read some real-life examples of adaptation to combat hyperinflation and economic collapse by creating informal and often innovative systems to secure necessities. What you are reading now is the byproduct of some of those initiatives of mine.

The gap between wages (I simply can’t explain why these are so low) and the price of goods has forced Venezuela’s working-class population to develop multiple and creative ways to earn income. While this phenomenon isn’t new, it has worsened alongside the economic collapse. Hand in hand with dollarization, and something that we could interpret as a revival of commerce, the country has gone from being one of the cheapest to one of the most expensive in South America.

“Tiger killing”

One of the examples is Mr. B., a professional musician born in Caracas, now in his 50s, who found his passion for music influenced by his older sister, another musician. Growing up in the lower-middle-class area of Caricuao, Jaime started playing the flute, along with a Peruvian quena, both of which would become his constant companions in the harsh times to come.

Mr. B is a living example of Venezuela’s relentless struggle to survive, as many other professionals, with a career of over 30 years in music that includes studies at the José Ángel Lamas Conservatory and the Central University of Venezuela. In a country with a formerly vibrant oil and gas industry, diverse technical studies were once the most in demand. However, even then, under the light of economic development in those years, all kinds of activities were decently rewarded. Teachers could make a decent living, even music teachers.

Nowadays, many teachers mostly dedicate themselves to activities with the popular street name as a description: “killing tigers”. Meaning with this expression, that any kind of economic activity is valid: raising chickens, pigs, for those in a more rural environment. In the cities, many people resort to driving a cab, or working part-time in a fruit and vegetables shop, or with a hotdog cart at night, sewing, nails, hairdressing, delivery, private classes, housekeeping, waitress in a restaurant, you name it.

As a side note, the “tiger killing” (not exactly “hunting”) expression means that people will find side jobs doing a variety of different chores.

It seems to derive historically from the second half of the 19th Century, and the first 3-4 decades of the 20th century. Its origin is linked to the peasants who worked as hunters to keep the big feline predator population at bay, to avoid them preying on the cattle in the haciendas, usually surrounded by wilderness. A tiger’s corpse was then delivered to the owner, and he would pay handsomely to the hunter. Considering that back in the day Venezuela wasn’t even 5 million people living in almost one million square km, tigers were a hazard even for peasants in the countryside. Don’t take my word for this, but this is what my dad’s historical memories record exhibits.

Basic family food basket being +$440 means you have to do whatever you can to get the coin. Sure, some people are making it better than others. Qualified professionals in many technical areas flew to greener pastures a long time ago. Others came back after bitter experiences (ahem) abroad, to face the realities of being in a land that is, simply, not a functional country for millions.

I have to mention this: those who know how to create wealth are the ones doing decently in and out of Venezuela. Sadly, it’s a skill that, in my case, is a steep learning curve. But I am working actively on that.

But let’s move on.

Independent business owners

People with independent businesses, like importing merchandise, or all kinds of retail shops and alike, that were once what we could call “prosperous”, can be seen as the least affected and vulnerable. Many of them have their capitals stashed abroad, and transfer all the wealth they can to their international accounts after paying their life expenses.

There is a whole ecosystem of people working on services for this “class”, mostly women doing nails and hair, at home or visiting, and electrician/plumbing/paint/masonry/AC/laundry machine repair guys. And, of course, the mechanics and car electricians. (Need some tools for this? Check scanners, a book on how to use them, voltmeters, tool sets (imperial/metrics here and metrics only here),

With the economy undergoing an adjustment process, prices now hover in dollars. You can see in the shops a number, followed by the abbreviation “REF”, indicating the price in USD.

Just so you can have an idea, with the African-level wages, people try to live in cities with European-level prices. The economist José Guerra (a deputee of the 2015 National Assembly that was wiped out clean and violently dissolved before they could impeach the bus driver) estimates Venezuela is proportionally the region’s costliest. The evidence collected by organizations like the Venezuelan Finance Observatory found staples like rice and eggs cost 10% of wages in Bogotá or Lima, but exceeded that by $10 in Caracas’ working-class barrios. But we will leave it to the DEA to produce the only reasonable explanation for this.

Small tasks

Another example we can quote is Mr. A., a 41-year-old teacher.

He walks dogs, does masonry work, and occasionally moves furniture. He says that service jobs are Venezuela’s lifeline. These tasks allow him to earn $270/month, barely enough for him and his elder mother.

State “social policy” relies on cash transfers (avg. $2/person) and subsidized food boxes known as “CLAPs”, received by 90% of households but delivered monthly to only 35%. According to the 2022 National Living Conditions Survey (ENCOVI), 50% of households “aren’t poor, but inequality soared, making Venezuela Latin America’s most unequal country”. Go figure.

Nothing but the truth there.

Of course, most of these jobs are not formal. Forget the 8-hour per day work week schedule that modern life once promised. Making ends meet to barely survive will demand a lot of energy and strength, only to keep your head above water.

I had already seen this in the 1990s. Being a young man, things were somehow different; nowadays, with my current responsibilities and aging parents, oh, well…you know the drill. Stretching one’s ability to make money is now more like a national sport than ever. The proverbial Venezuelan improvisation is now a basic financial skill. Leisure time is often reduced to a few hours of watching free streaming content on the Internet, or spending a couple of hours chatting with friends over coffee in a cafe.

I remember that receptionists and secretaries in the 90s sold Avon; teachers used some of their free time after class or on the weekends to give some private classes, and office workers used to dedicate a couple of hours to transport people in their cars, as informal taxi driving, or even taking kids to school, given that there are no such thing as school bus since like 30 years. Or more.

I recall that, back in the 1980s and 1990s, many teachers sold Tupperware. One of the most outstanding chemistry teachers in town had a socks kiosk in the Sunday market. That was a “lost decade” tied to “multi-employment” (but in a bad way) to wage decay, hyperinflation, and the reversal of 1970s prosperity, according to the economist Luis Crespo.

Our countrymen now are hustling as fence-painters, cat-nail trimmers, or coffee vendors. A.G., a university graduate, quit a ministry job, migrated to Colombia, had to return, and started to work in Caracas as a taxi driver in Ridery (a local Uber-like app). He earns more in a week than a state employee’s monthly wage.

The widespread spectrum of jobs is simply…outstanding.

University professors teach at public and private schools the same day, jumping from one classroom to another; take consulting gigs, and work 12–14-hour days. There are people with multiple degrees who survive on things like dog grooming ($200/month) and freelance writing ($120). Teaching in a public school pays like $30/month, and that barely covers the bus fare. For many, survival trumps vocation.

Homemade bakery, cakes, sweets, pastries, every single product that people know how to cook, that is tasty, and can be sold with a profit.

Others, more fortunate, can work online, earning over 2500-3000K, but they are a highly skilled minority: usually with a software engineering degree and English fluency. And we can’t forget those who started with Crypto trading, and if you feel like learning about it, click here.

Venezuelans usually like to be well-groomed. A professional haircut for men is close to 8-10$, meaning that with 3-4 customers per day a good hairdresser can get 200$ in a week. Would you like to know more? check here.

Trust me on this one: the best moment to learn is before the situation escalates. When you don’t have the pressure. You may want to collect some information just in case. Won’t do any harm. Remember that building a community network is paramount. One of the aspects impacting my access to a professional labor market right now is that my colleague community is now scattered…or even deceased.

So much to write about, and so little space…This article tries to cover a lot of information!

Let me know in the comments below what you think and how you feel you could build an income, if the actual array of variables suddenly changes.

Thanks for your very necessary support and sponsoring these days to keep us going strong!

Stay safe, and keep tuned.

J.

What about you?

Do you have a side gig or additional streams of income? Please tell us about it in the comments section.

About Jose

Jose is an upper middle class professional. He is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. He has an old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Jose and his younger kid are currently back in Venezuela, after the intention of setting up a new life in another country didn’t  go well. The SARSCOV2 re-shaped the labor market and South American economy so he decided to give it a try to homestead in the mountains, and make a living as best as possible. But this time in his own land, and surrounded by family, friends and acquaintances, with all the gear and equipment collected, as the initial plan was.

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