Miami on the cheap? Venezuelans traveling to Florida face new restrictions

A woman speaks on her cell as she seeks information about flight sales Friday from a closed United Airlines office in Caracas, Venezuela.  Delta, American Airlines and Panama's Copa Airlines were also among carriers whose offices were either closed or had halted sales on Friday after the government devalued the local currency for flights abroad.
A woman speaks on her cell as she seeks information about flight sales Friday from a closed United Airlines office in Caracas, Venezuela. Delta, American Airlines and Panama's Copa Airlines were also among carriers whose offices were either closed or had halted sales on Friday after the government devalued the local currency for flights abroad.
Alejandro Cegarra / AP

Venezuelans heading to Florida will have to learn to travel cheap. On Friday, the government enacted a new law that severely limits how much foreign currency travelers can purchase.

In the past, Venezuelans had the right to charge $2,500 to their credit cards and get $500 in cash for trips at the official, preferential rate. While those totals stand for the rest of the United States, travelers to Florida will only be allowed to charge $700 on their credit cards and purchase $300 in cash.

Florida is thought to be home to more than 100,000 Venezuelans and these new rules are expected to hit hard.

“These measures are just another attack on Venezuelans and a way to punish the opposition, which has strong ties in Miami,” said Elio Aponte, the head of the Organization of Venezuelans in Exile, or ORVEX, which is based in South Florida. “You can’t justify having these kind of currency controls in a country that is extremely rich.”

Meanwhile, many airlines in Venezuela on Friday were refusing to sell tickets after the government this week devalued the bolivar for international flights.

The offices of American Airlines, Delta, United and Panama’s Copa were all either closed or had halted sales on Friday as the higher exchange rate took effect, the Associated Press reported.

Airlines claim they have some $3.3 billion locked up in Venezuela’s currency control system. Ecuador’s TAME airline, which had several flights a week to Caracas, recently quit flying the route until the government pays $43 million it’s owed in ticket sales.

In a separate law, also enacted Friday, Venezuela made it illegal for companies to turn too much of a profit.

The moves come as the country is fighting inflation, which hit 56 percent last year — the highest in the hemisphere and among the highest in the world. It’s also struggling to keep up with the demand for greenbacks, which are needed for imports and travel.

Under the “Fair Price” law, the government created The National Superintendent for Socioeconomic Rights, or SUNDDE, which will set the profit margins for each sector of the economy — with a maximum of 30 percent. The SUNDDE will also set the rental price of commercial real-estate.

President Nicolás Maduro says the moves are needed to fight the “economic war” being waged by the “parasitic” bourgeois.

“We want to establish a necessary equilibrium between costs of production, imports and earnings,” he said of the new law.

But others see the Fair Price law as just one more way to attack a struggling private sector.

“This law is pure propaganda,” said Luís Florido, a national director of the Voluntad Popular opposition party. “The government is trying to prove that it’s taking a hard-line on inflation but all it’s doing is hurting the productive sectors.”

It’s far from clear what kind of impact it will have. For years, the late President Hugo Chávez fixed the prices for many basic goods — a practice that Maduro has followed —but it hasn’t made a dent in inflation.

And the price controls have had unintended consequences.

Regulated items are often hard to find, as many are hoarded and sold for a profit on the black market. Importers say they don’t have access to the foreign currency they need to bring in items. Venezuelans often line up for hours to buy a few rolls of toilet paper or flour — this in the country with the world’s largest oil reserves.

At the root of the problem is a currency that is out of whack. While the government has an official, fixed rate of 6.3 bolivares to the dollar — access to those dollars is extremely limited. Instead, businesses are forced to go to the black market where buyers pay more than 10 times the official rate.

Last week, the government said it was expanding its dollar auction mechanism, called SICAD, but it’s unclear if it can still meet pent-up demand.

What is clear is that the new rules raise the stakes for business owners. Companies that bank too much profit, for example, can be temporarily closed or even confiscated.

Also, those caught hoarding regulated goods will face prison terms of eight to 10 years, and those caught smuggling items — most often to neighboring Colombia — can be jailed from 10 to 14 years.

Aponte said the new rules are simply another turning of the screw for common Venezuelans.

“Business owners, entrepreneurs and people with means are leaving Venezuela, but many people are getting trapped there,” he said. “The government wants to control their life and take away their liberty.”

This report contains material from The Associated Press.

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