Caracas (AFP)

The scene would have seemed incongruous a few months ago. In Caracas, Rosmary sells pancakes stuffed with "1 $" each. Proscribed for 15 years, the dollar makes a smashing comeback in Venezuela with the blessing of Nicolas Maduro who puts his country on the budget diet.

Venezuela, which derives 96% of its oil revenues, faces squaring the circle. His crude oil production is in free fall and he suffers US sanctions that target not only his oil sector, but also the socialist president and his entourage.

At a liquidity price, Nicolas Maduro has flexibilized the exchange controls and prices that prevailed at the time of his predecessor Hugo Chavez (1999-2013). As long as the price of a barrel was high, the late head of state could take out the checkbook to import everything without worrying about the national production.

But with the drop in crude oil prices and the plummeting Venezuelan production, from 3.2 million barrels a day ten years ago to 700,000 today, the model has become untenable.

And Venezuelans pay the price: shortages of food and medicine have multiplied, inflation has exploded and the local currency - the bolivar - has seen its value melt.

So the government is on the road to laissez-faire. "I'm not going to impose any control on you, I'm not going to fine you for the prices you're charging, but it's up to you to bring the capital" to make a business work, sums up the economist Luis Arturo Barcenas.

Meanwhile, Caracas, criticized for years for its lack of fiscal discipline, has decided to make draconian cuts and severely restrict access to credit.

As a result, galloping inflation has decelerated - but should still reach 200,000% in 2019 according to the IMF - and shortages are beginning to subside.

Nevertheless, GDP is expected to contract this year by 35%, according to the IMF.

"We finally seized what was the origin of hyperinflation: monetary financing of the deficit," says Luis Arturo Barcenas. Clearly: the overheating of the printing press.

- "People pay in dollars" -

Faced with the hyperinflation and depreciation of the bolivar, Venezuelans seek refuge in the dollar.

"It's a way of defending oneself," says Rosmary Paz, who sells "hallacas" (stuffed pancakes) in Caracas.

It is also a reversal of history. Since 2013 and his accession to the presidency, Nicolas Maduro had repeatedly denounced the "criminal dollar", saying that the prices displayed in the US currency were "manipulated".

Recently, however, he made a 180 degree turn.

In a recent interview, he said he had nothing against the de facto dollarisation of the economy, even claiming to see it as a "valve" to soften the "economic blockade" of Washington, which put in place a Venezuelan oil embargo. in April.

It is above all the recognition of a state of affairs. In Caracas, the shops that sell French cheeses and American steaks in dollars abound.

But, again, in the popular neighborhoods too, the greenback has its entrances. "People come and they pay in dollars," says Junior Nieves, a grocer in the El Valle neighborhood.

The dollar gives social status to the one who owns it in a country where the minimum wage is about $ 9. "I wish I had dollars, but I do not have any," laments Eloy Rivas, a 57-year-old car washer.

According to the firm Ecoanalitica, only 15% of Venezuelans have cash inflows in foreign currency on a regular basis and 35% occasionally.

And for "having" dollars, often "remesas", the sending of money by relatives living abroad, are the solution. It is also to facilitate their flow that the government has flexibilized the exchange control.

According to Ecoanalitica, the "remesas" sent this year to Venezuela should exceed $ 3.5 billion.

According to the UN, 3.6 million Venezuelans have fled the country in crisis over the past four years.

© 2019 AFP