Ailing Venezuela Pushed To Offer Diamonds, Gold As Payment For Medicines

In the midst of a financial crisis that only promises to deepen, Venezuela is now being pushed to adopt the barter system. According to a Wall Street Journal report, the country recently offered diamonds, gold and coltan as alternative compensation to foreign pharmaceutical suppliers for supply of medicines.

It isn’t clear if the pharma companies will accept the offer since, according to the report, they were baffled by the proposal. “The proposed exchange perplexed the pharma representatives, whose companies had no policies on accepting precious gems and metals as payment, according to three people familiar with the meeting last month where Venezuela’s health minister made the offer.”

Bartering has reached the streets as well among regular people, as the government has run out of resources to print enough currency. The Nicolás Maduro administration has been in the process of creating a digital cryptocurrency, called the Petro, to be backed by the country’s reserves of oil and gas as well as gold and diamond holdings. This could be used to pay off the foreign suppliers as well, the Wall Street Journal reported the president’s aides as saying.

Once the most prosperous country in Latin America, Venezuela’s economy has deteriorated because of lower crude prices and nearly two decades of excessive public spending. Various news reports in August last year brought to light the chronic food shortage in the country.

Food prices in the markets have skyrocketed. In March last year, a basket of basic grocery items which includes eggs, milk and fruits cost 772,614 bolivares, close to four times the monthly minimum wage, according to the Venezuela-based Center of Social Analysis and Documentation.

Over the last one year, the Venezuelan Bolivar has plunged by 95.5 per cent against the US Dollar on the black market. The International Monetary Fund has estimated that inflation will top 2,000 per cent in 2018.