Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

For years, one tragedy after another forced them from Venezuela: Hyperinflation, famine, malaria outbreaks and a grid collapse that left the entire nation in the dark for a week. In all, 6 million people fled in what’s become the greatest humanitarian crisis in modern history in the Western Hemisphere.

Now, a reversal is starting to take shape. Tens of thousands are coming home.

It’s a twist so unexpected that even Venezuelans greeting the returnees find it hard to believe. The pandemic, though, has been particularly cruel to the migrants scattered across the region. Jobs are scarce and xenophobia is rapidly on the rise. Meanwhile, back home, the economy has, against all odds, stabilized. After years of heavy-handed government meddling that shrank the oil-rich nation’s GDP to a fraction of what it once was, the socialist leader Nicolas Maduro has carried out a series of free-market reforms that are beginning to fuel growth.

It's a big victory for Maduro, a ruthless authoritarian whose regime was rocked a few years ago by a flurry of U.S. sanctions similar to those slapped on his close ally Vladimir Putin over the past two weeks. In a sign of just how strong Maduro's hold on power now appears -- and how much stronger Venezuela's financial position has suddenly become -- the Biden administration sent an envoy to Caracas this weekend to negotiate a possible lifting of the sanctions. A deal would allow Venezuela to export more oil, helping offset the loss of Russian barrels in international markets, just as prices skyrocket.

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

Coming up with a precise number on the returnees is next to impossible as is, for that matter, knowing whether the trend will last for years or fade away in months. But signs of their arrival are piling up everywhere in Caracas: in the booming market for apartment rentals; in the surge in private-school enrollments; in the cars clogging streets once left empty by the exodus; and in the scores of freshly painted shops throwing their doors open to customers for the first time. In small towns along the western border with Colombia, it’s evident too. For years, the traffic was only one way — out. Now, locals say, just as many people are coming home as leaving.

Alejandro Rivas is one of them. 

“I wouldn’t choose to migrate again,” he said one recent weekday as he waited for the lunchtime crowd to arrive at his small pizzeria near downtown Caracas. Rivas, 34, returned last year from the Dominican Republic, where he also ran a restaurant, and opened Mamandini — local slang for “broke” — with three partners.

After overcoming the kind of challenges that come with investing in an economy in ruins — like having to rebuild the crumbling sidewalk in front of the restaurant — Rivas has been pleasantly surprised by his sales of pizza (about 12 pies a day) and plates of lasagna (30) and pasta (33). His customers aren’t high-society types but rather blue-collar workers who can suddenly afford to spend $5 for a meal out.

This was unthinkable back when Rivas left in 2015. A few years later, though, Maduro took one of the single biggest steps in his reform push — adopting the U.S. dollar as the country’s unofficial currency. Today, a majority of companies pay their workers in dollars and conduct transactions in dollars. This has played a crucial role in curbing hyperinflation and helping restore some of the purchasing power Venezuelans have lost.

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

The financial odyssey of a cab driver named Alejandro Barreto illustrates how great the impact has been.

Barreto had left Caracas during the worst of the economic crisis. At the time, he was barely eking out the equivalent of $50 a month as a cab driver. He landed in Lima, where he quickly scored a job in a shop that printed T-shirts. It paid about $350 a month. Then the pandemic hit and he found himself out of a job and on the street hawking candy. He was back down to earning about $150 or so a month and, he says, miserable. “It was a lonely life, with no friends or family.”

So he caught a bus back to Caracas and started driving a cab again. He now often pockets the same $350 a month he made at the T-shirt shop in Lima. “Coming back was the best decision I’ve made lately,” Barreto, 35, says.

That some migrants can now make more money at home than they did abroad shines a light on one of the true oddities of Venezuela under socialist rule. Because of its idiosyncratic and byzantine policies, the country is an island unto itself that’s largely impervious to broader global forces.

So while economies up and down Latin America are still struggling to recover from the pandemic-induced collapse, Venezuela’s improved markedly. 

Not only has GDP finally stopped contracting — Credit Suisse predicts a second year of growth in 2022 — but inflation has plunged from a peak of some 2,000,000% a few years ago. This isn’t just for those earning in dollars. Even in bolivars, inflation slowed to an annual pace of 25% over the past six months, according to an index compiled by Bloomberg. Oil production has finally started to rebound too, climbing to above 800,000 barrels a day. 

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

To be clear, it’s a stabilization that came only after years of cataclysmic declines that left millions living hand to mouth. According to one study, the economy would have to grow 10% a year for 18 straight years to get back to its size in 1997, a year before Hugo Chavez, Maduro’s mentor and predecessor, won the presidency for the first time.

Nobody is claiming the humanitarian crisis has ended, either. Thousands continue to leave. But emigration has slowed dramatically — the net outflow was down 60% last year from 2020, according to a study by researcher Datanalisis — while the number of returnees has surged, especially in the middle-class neighborhoods that ring downtown Caracas.

“People are coming back, that is clear,” said Luis Vicente Leon, who is leading the Datanalisis study. This, he says, is pushing net migration towards zero. (The government doesn’t publish migration figures and it didn’t respond to requests for comment.)

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

No country has received more migrants than Venezuela’s western neighbor, Colombia. Some 1.8 million have resettled there, turning upside down the decades-old economic order that saw Colombian laborers cross the border into wealthier Venezuela in search of work.

The Venezuelans mostly landed jobs in Colombian retail shops, restaurants and hotels, precisely the industries hardest hit by the initial pandemic lockdowns. After the jobs vanished, the second part of the financial squeeze came when inflation soared — in Colombia and many of the migrants’ other host nations. In Chile, the annual inflation rate has more than doubled in less than a year to 7.8%. In Brazil, it’s climbed to 10.4%.

The economic hardship has only further stoked xenophobia across the region. Anti-immigrant protests have become commonplace in Chile, a nation long seen as tolerant to the plight of migrants. A hashtag that roughly translates to “it’s not migration, it’s invasion” has been trending on Twitter there of late. And in Trinidad, a small island just miles from Venezuela, the coast guard recently opened fire on a boat full of migrants, killing an infant.

Venezuelan Migrants Are Coming Home as Maduro Embraces Capitalism

Sensing the shifting tides, Maduro has launched a program to repatriate people. He calls it “Return to the Homeland.” It’s brought back some 28,000 people by plane and by boat, according to the government. In a recent speech on state television, Maduro implored the diaspora to come home as he announced a plan to triple the number of flights the program offered. “Stop suffering over there. Come back!”

To Victor Soto, this is all just political theater. 

Like most Venezuelans living abroad, he thinks little of Maduro. But Soto, 37, is making plans to return to Barquisimeto, a small, steamy city several hours west of Caracas. He’s been living in a working-class neighborhood along the sea in Lima that became popular with Venezuelans. When he arrived in 2017, he says, almost everyone in his building was Venezuelan. So many have since left — either to go home or to try their luck in other countries — that they make up less than half of the occupants today.

The reports Soto’s been getting from friends back home paint a picture of a very different Venezuela than the one he left. The grocery store shelves are full. The interminable lines to buy basic goods are gone. Inflation no longer immediately destroys the value of money. He plans to open a little restaurant in Barquisimeto and is optimistic it will throw off enough cash to roughly match the $300 he makes a month as a janitor in Lima.

Soto’s biggest priority, he says, is providing for his mother. It was seeing her standing in those lines day and night to buy food at government-set prices that had prompted him to look for work in Lima. “In Venezuela, I believe that I can give my mom the financial peace of mind that I’ve been giving her from Peru.” And, besides, he just really wants to be home again. “The fact that Maduro is still in power won’t stop me.” —With Matthew Malinowski, Valentina Fuentes, Andreina Itriago Acosta

©2022 Bloomberg L.P.

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