Around 1.85 million Venezuelans have signed a petition to recall the president, Nicolás Maduro, but that may still not be enough. Photo / AP
Around 1.85 million Venezuelans have signed a petition to recall the president, Nicolás Maduro, but that may still not be enough. Photo / AP
They call them bachaqueros. Venezuela's army of black market shoppers descend every day at dawn outside Caracas's biggest stores.
Named after the bachaco leaf-cutting ant that carries several times its weight, the men and women queue alongside hundreds of other Venezuelans for food, nappies, milk and other basic goods.
They stand for hours in the blistering heat, motivated not by hunger, but profit.
Half-empty shelves in most shops means goods bought at government-controlled prices can be sold at a significant mark-up.
Nicolás Maduro, Venezuela's president, has described them as "human beings turned savage".
"There's a lady that I pay 1,500 bolivars a day to clean my house, but recently she told me she'd rather queue and buy and sell products than work for me."
It wasn't always this way. Diego Moya-Ocampos, senior political risk analyst at IHS, says the current crisis is the result of years of "economic mismanagement" by the ruling socialist party.
Led by Hugo Chávez, the country's firebrand former president, the country embarked on a wave of expropriation and redistribution with the charismatic leader offering cut-price fridges, appliances and even new homes to poor Venezuelans.
Chávez wanted to create a socialist paradise, an ideology that has been reinforced by his successor Maduro following his death in 2013.
But the oil price collapse a year later served as a wake-up call for a country that chose profligacy over prudence in the hope that a rainy day would never come.
Oil accounts for 98pc of total exports and 59pc of fiscal revenues, but Moya-Ocampos says the price slide isn't the country's only problem.
"Even under Chavez and $100 a barrel oil, debt was rapidly rising and there were already food shortages," he says, "This is ultimately to do with an interventionist model that is not sustainable and has reached a tipping point."
Hugo Chavez ruled Venezuela for 14 years. Photo / AP
Maduro's declaration of a fresh three month state of emergency has sparked fears that the government will try to seize control of more private companies.
Many Venezuelans have already left the country, including Francisco Flores. "Venezuela has taken good working companies, given them to the poor but not equipped them with the skills to run them so they go bankrupt," he says.
The NHS therapist, who now lives in London, says the regime is based on a principle of keeping everyone "equal but poor".
"This way, the state becomes a nanny and everyone loses the power to do anything because they are so dependent on it."
Venezuela is now suffering from the effects of a deep recession and hyperinflation as the government prints money to try to plug a gap between revenues and spending that is on course to hit 25 per cent of gross domestic product (GDP) next year.
The International Monetary Fund has been banned from conducting its annual economic healthcheck of the country since 2004, but believes growth won't get back to positive territory until the next decade, while inflation is on course to hit 4,505 per cent in 2021.
A recent study by the Council for Public Security and Criminal Justice ranked Caracas as the world's most violent city.
You have to laugh or you'll cry. It's in our DNA.
Venezuela is also one of the most unfriendly places to do business, ranking 186th out of 189 countries in the World Bank's Doing Business index.
Only Libya, Eritrea and South Sudan are further down the list. Bacalhau, 40, describes himself as one of the lucky ones.
The father of two is paid in dollars which can be exchanged on the black market for thousands of bolivars, protecting his family from rapid price rises.
He has a surprising sense of humour for someone whose parents have both been kidnapped. "You have to laugh or you'll cry," he says. "It's in our DNA".
"There is a saying in Venezuela," he adds. "Delincuentes andan con el moño suelto." Laughing, he translates: "Venezuela is a country where criminals can really let their hair down."
Bacalhau, like many middle class Venezuelans, admits paying bachaqueros for goods. "There's someone I contact on Whatsapp when I need to buy milk," he says.
"I still go to the open market to buy fruit but even there it is ridiculous. In April 2015 I bought some fruit and vegetables for 430 bolivars. Last Saturday the same items cost me 14,000 bolivars. Isn't that crazy?"
People chant against the government of President Nicolas Maduro during a march in Caracas, Venezuela on May 14. Photo / AP
While the government regulates factory gate, wholesale and consumer prices, nobody pays attention.
"You know how much this cost me?" asks Bacalhau, waving a plastic bag stuffed with toilet rolls. "9,000 bolivars". The average monthly salary in Venezuela is 15,000 bolivars.
The Venezuelan government is now desperately trying to reduce its imports in order to close the massive black hole that has opened up in the country's public finances.
Its efforts have surprised everyone. "We've had a 40 per cent year-on-year contraction in the first three months of this year, which takes the first quarter back to the same level of imports we had in 2004," says Alejandro Arreaza, an economist at Barclays.
"If we keep on going at this pace, that would represent a contraction of almost £20bn compared to Venezuela's imports last year. These are very aggressive cuts."
The social costs of such a move have been laid bare for all to see. Hospitals and pharmacies are desperately short of even basic medicines.
"People in Venezuela now say they can't afford to get ill because when you turn up at the hospital there is nothing," says Moya-Ocampos.
A vegetables container is used to put a large amount of bills of the sales of days in a local market in Caracas. Photo / Getty
Rich or poor, the situation is critical. "I recently met with a governor of one of Venezuela's biggest states," says one source, who asks to remain anonymous.
"He's very popular and very well connected, but all of his staff needed three days to locate some medicine for his grandson. Three days."
Thousands turn to social media to barter for goods. On Facebook, people offer to swap razors for cough syrup, toothpaste for sugar and oil for wet wipes.
Demand for antibiotics is voracious. In one post, someone offers seven boxes of amoxycillin - a form of penicillin.
Others rely on family, as one Venezuelan businessman describes.
"I fly between the US and Venezuela a lot, and I used to travel with just [hand luggage] because I could avoid long waits at the airport.
"During my last few trips, I've had to go with a huge suitcase because everybody wants me to bring something. Last time I even brought car parts for my brother because he can't find them anywhere."
Maduro's grip on power is weakening.
Around 1.85 million Venezuelans have signed a petition to recall the president. While this is far above the 200,000 signatures needed to kick-start the process, it has been complicated by the government's control of the national electoral council.
Even if the names are verified, the opposition must gather more than four million signatures in a second round to secure a recall referendum.
This must be completed before January 10 next year to remove Maduro from office and trigger fresh elections. Any later, and the constitution states that vice-president Aristóbulo Isturiz will serve out the remaining two years of Maduro's term.
Isturiz has been a loyal sergeant, claiming that Venezuelans have "acted too late" to meet the January deadline. "You don't like Maduro? Deal with it," he said last week.
Venezuela's President Nicolas Maduro still holds control of the armed forces, the supreme court and the electoral authority. Photo / AP
Moya-Ocampos believes the government is buying time in the hope that the oil price will rise again.
"The government still holds control of the armed forces, the supreme court and the electoral authority, and these three players are key if Maduro is to retain control of the country," he says.
There is also the question of whether Venezuela will be able to service its debts, with $116bn due over the next two decades.
Investors are sceptical, and the market is pricing in a 95 per cent chance of default over the next five years.
Around a fifth of payments are due over the next two years, according to Bank of America Merrill Lynch, while PDVSA, Venezuela's state-owned oil and gas company, is due to repay $3.3bn at the end of October and start of November.
If oil averages $44 a barrel this year, Barclays says Venezuela faces a financing gap of $20bn in 2016, even accounting for a massive reduction in imports.
The bank is optimistic in the short term.
"We believe they can part-finance this gap through $5bn from China [through renegotiating its oil-for-loans deal], around $1.5bn in other multilateral and bilateral loans, $2bn from oil companies and promissory notes, and up to $1bn from asset sales.
The rest will have to be financed with the gold that they have in the international reserves and other assets accumulated in other public entities," says Arreaza.
But reserves have been dwindling fast. Venezuela's stockpile of gold is now worth around $11bn, according to central bank data, down from $21bn in 2010.
I live in hope for change, but after living here all my life it's got to the point that if I leave I'll never come back.
Total reserves stand at $30bn, according to the bank, though Baml estimates reserves could be as high as $52bn including other liquidatable assets, down from $69.2bn in 2014.
Either way, the long-term outlook is far from rosy. "What they have been doing so far is depleting assets in order to make their payments - and that is clearly not sustainable," says Arreaza.
He says a new regime could help the country back on its feet, with help from the IMF.
"If we have a new government that could imply multilateral support to manage a transition process [and] we could have a relatively market-friendly restructuring like that seen in Ukraine."
For Moya-Ocampos, the government can only ignore the will of the people for so long. "I go quite often to Caracas and what I feel is that people are starting to lose fear. They are realising that regime change is a possibility."
For Bacalhau, who has a Portuguese passport, the end game is in sight. He is waiting until the end of the year to see if there will be regime change, or he's ready to emigrate.
"The truth is my children don't have a future in this country. It's changed so much," he says.
"Ten years ago I used to go to the beach with my father to camp overnight. Now it would be suicidal. I live in hope for change, but after living here all my life it's got to the point that if I leave I'll never come back."
