Escape From Caracas

Elvira Sarmiento and her husband checked one suitcase each at Caracas's Maiquetía International Airport when they boarded a flight to Madrid at the end of February. When they returned to Caracas a month later, the couple had seven suitcases between them—one tangible measure of the $15,000 shopping spree they indulged in during their holiday in Spain and Italy. The 38-year-old mother of three has President Hugo Chávez to thank in part for her spendthrift vacation: when his government introduced foreign-exchange controls in 2003 in a bid to curb capital flight, Venezuelans holding credit cards were allocated an annual quota of $5,000, plus $500 in cash for international travel at the overvalued official rate of 2,150 bolivars to the dollar. Instead of paying upwards of $800 for her round-trip plane ticket, Sarmiento coughed up a mere $360 under an exchange-control regime that favors many of the middle- and upper-class Venezuelans who make up the backbone of Chávez's internal opposition. "Everybody's traveling," says Sarmiento. "If you do the math, it's very cheap to travel at the official exchange rate."

The numbers bear her out. An estimated 1.5 million foreign air-travel tickets were sold in Venezuela last year—a 45 percent jump over 2006—and the trend shows no signs of slowing. During Easter week last month, 139,421 people ventured abroad, a 10 percent increase over the same holiday period in 2007. It's become nearly impossible to find a seat at short notice on a flight from Caracas to Panama City or Santo Domingo.

Why the mad dash? Venezuela's oil revenue windfall in the past three years has boosted disposable income, and that in turn is helping to drive the highest inflation rate in the Americas—which gives consumers even more incentive to spend their bolivars instead of saving them. "There's been a significant increase in the amount of liquidity in people's pockets," notes Humberto Figuera, executive president of the Venezuelan Airlines Association. "Venezuelans feel it's better to spend their money now than put it in a bank account where it's going to lose value."

The entire Caribbean Basin is feeling the ripple effects of the Venezuelan foreign-travel boom. Top-drawer Venezuelan chefs like Edgar Leal of the Coral Gables bistro Cacao are making names for themselves in South Florida, a popular travel destination for Venezuelans. Carolina Sivoli of the Venezuelan-American Chamber of Commerce of Florida reports a 50 percent rise in membership in the past year as Venezuelan and other Latin American entrepreneurs scramble to get a foothold in the fast-growing market. A surge in Venezuelan tourism is fueling the real-estate boom in Panama; Caracas developer Salomón Cohen and the Cacciamani construction firm have both set up shop there. Three restaurants specializing in Venezuelan cuisine have opened in Bogotá and so, too, have boutiques belonging to Caracas-bred fashion designers Angel Sánchez and Mayela Camacho, whose Italian-made clothing appeals to stylish Colombian shoppers.

The widening chasm between the fixed official exchange rate for the dollar and the so-called parallel market rate is sparking some unethical practices. Last year hordes of Venezuelans headed to the Netherlands Antilles islands of Curaçao and Aruba in a resourceful bid to circumvent Chávez's currency controls. For commissions ranging between 15 and 20 percent, vendors on those islands provided fake credit-card invoices for purchases of consumer electronics and other goods to Venezuelan clients and supplied them with greenbacks instead. To deter such schemes, the Venezuelan government required 38,000 citizens to produce receipts last December proving that they had spent their travel allowances on hotel bills, boat excursions and other tourism-related charges.

The trend is challenging Chávez's self-professed socialist principles. To qualify for the yearly four-figure foreign-travel allowance, a Venezuelan must have a credit card—a luxury that, unlike in the United States and Western Europe, is restricted mainly to the rich and middle classes. The policy effectively excludes the urban poor who represent the bedrock of the Venezuelan president's dwindling support. "It's very paradoxical that so much of the policymaking under Chávez turns out to be giveaways to the rich and the middle class," says Francisco Toro, a journalist who writes a blog called Caracas Chronicles. "Yet they still complain bitterly, and it doesn't seem to buy him a lot of overt good will."

But folks like Elvira Sarmiento seem perfectly content to enjoy the subsidized ride as long as it lasts. Next stop on her itinerary: the picturesque Mexican town of San Miguel de Allende, where friends from Peru and Mexico are scheduled to tie the knot later this spring. She'll no doubt need to pack an extra suitcase or two.

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