Venezuela’s Modest Economic Liberalization Has Created a ‘Hellscape of Inequality’

Tony Frangie-Mawad

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In mid-November, a glassy Saks Fifth Avenue-like department store opened in Caracas’s wealthy commercial district of Las Mercedes. The store, Avanti, is owned by a Palestinian-Venezuelan businessman and sells high-end fashion brands—Balenciaga, Gucci, Versace, Valentino—and luxury goods such as a $110,000 Samsung television that quickly racked up a waiting list.

Although Avanti was built in the capital of Venezuela, a country where most of the population lives in poverty, the store is hardly an aberration. Throughout Caracas, hundreds of new restaurants, fashion stores, and nightclubs have popped up in the past year—including a restaurant hanging from a crane, with diners overlooking the Caracas skyline.

This “Bubble,” as it’s sometimes called on social media, has arisen from a change in President Nicolás Maduro’s economic policies. After experiencing one of the world’s largest economic collapses outside of war, followed by a series of sanctions, Venezuela’s authoritarian government has drifted away from the orthodox socialist policies of Maduro’s predecessor, Hugo Chávez, and toward a mild economic liberalization. This new approach in recent years has included the elimination of tariffs on many imports, the lifting of price and currency exchange controls, and a nationwide de facto dollarization, in which U.S. dollars have been widely used in place of bolívars.