Venezuela vows crackdown on 'currency tourists'

Reuters

By Andrew Cawthorne

CARACAS, Oct 5 (Reuters) - President Nicolas Maduro'sgovernment plans to use fingerprint machines at airports to tryto root out no-shows who buy tickets to scam travel-relatedcurrency controls without even flying, in the latest symptom ofVenezuela's economic chaos.

Most flights out of the South American OPEC nation arebooked solid months ahead because locals buy up tickets toenable the purchase of dollars at a preferential rate.

In a phenomenon Venezuelans have dubbed "currency tourism,"many do not even bother taking the trips, meaning planes oftenfly out half-empty. People sell their dollar allowances on theblack market for a profit of up to seven times their officialworth.

Stung by a barrage of headlines on the subject, officials atthe weekend said they planned to put fingerprint machines atairports, ports and borders to identify the no-show scammers.

Only after people registered at those machines would theirhard currency allowance be activated, the immigration serviceSaime said in a statement.

"Dollars have to be used to feed the national economy, notto speculate with," Saime head Juan Carlos Dugarte said, addingthat his organization was working with state currency boardCadivi to stop the scam.

The surge in "currency tourism" has been added to annualizedinflation of 45 percent, frequent blackouts, and shortages ofbasics such as toilet paper and milk as another symbol of theeconomic problems piling up.

Maduro narrowly won a vote this year to replace socialistleader Hugo Chavez, who died of cancer, but he has beenstruggling to deal with Venezuelans' grassroots problems, forgehis own political identity, and keep the ruling Socialist Partyunited.

'THE SCRAPE'

Chavez introduced currency controls a decade ago and thedisparity between the official price of 6.3 bolivars to the U.S. dollar and the illegal black market rate, which is nearly seventimes higher, is wider than at any point since then.

There are strict limits on the availability of dollars atthe official rate but with a valid airline ticket Venezuelansmay exchange up to $3,000 at the government rate.

They profit from that using their credit cards in anarbitrage process known as "el raspao," or "the scrape." Eitherthey use credit cards abroad to obtain a cash advance which theythen carry home, or they send their cards to friends overseaswho swipe the cards and send the cash back.

Sometimes people fly abroad carrying multiple cards offriends and relatives that they "scrape" in one go.

Critics of Maduro, led by opposition leader HenriqueCapriles who lost the April presidential poll by 1.5 percentagepoints, say failed socialist economics and mismanagement are toblame for this and a host of other economic distortions.

But the government alleges that a silent "economic war" isbeing waged by rich opponents encouraged by the United States.Maduro expelled three American diplomats this week over theissue and has promised to "radicalize" government in response.

The scramble for airline tickets has led to a huge rise inprices, often double or triple what they were a few months back.

Local consumer group Anauco criticized the plan to introducefingerprint machines as "improvised and uncomfortable" forhonest travellers, saying authorities could easily identify theno-shows by cross-referencing immigration data and flightmanifests with registers held by currency board Cadivi.

"Our airports often collapse anyway due to the normalsecurity processes, so we can ill afford a new measure orpossible queue before boarding," it said.

Economists are clamoring for an easing of the foreignexchange system to stop problems like "currency tourism".

"Nothing is going to work unless you attack the rootproblem: reducing the gap between the official and parallelrate, or at least making it manageable," said Asdrubal Oliveros,of local think-tank Ecoanalitica.

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