If you have a friend from Venezuela, you may have wondered what is this “Cadivi” thing that he or she is always talking about. And why is it such a big deal?
“CADIVI (Commission for the Administration of Currency Exchange) is the Venezuelan government body which administers legal currency exchange in Venezuela.”
In 2003, Venezuela’s government decided to create an Institution which main goal is to control currency exchange… and screw Venezuela’s economy. Every Venezuelan who wants to travel abroad for any reason, to any country, has to go through the arduous process of begging government to allow them to buy foreign currency with their own earned money. For example, students who have been granted an F-1 Visa, and need to exchange Venezuelan currency to dollars or euros, have to prepare a folder with A LOT of documents. Some of these documents are copies of their ID, passport,VISA, and plane tickets; letter of acceptance from the school, as well as schedule of activities, and curriculum; a letter explaining the reasons of your major of choice, bank references and other legal requirements.
Subsequently to submitting the folder to the bank, it’s sent to Cadivi for evaluation. And this is the start of an inefficient process which could take 2, 3, 4 months or even more, before you finally receive an email informing you of their final decision. After that moment, there are two possible scenarios.
First Scenario: CADIVI approves the request
Nowadays, getting consent by Cadivi can be compared to winning a lottery, no one really understands the process or the factors which are being taken into consideration for the decision making. Although this scenario should be the only one, it happens and the majority of Venezuelans don’t trust the process because rumors of corruption are everywhere.
Most importantly is to say that people work hard to save the money in order to apply for CADIVI exchange rate and it’s not something that the government is giving for free.
For the lucky ones, the next steps would be going to the bank, have the money in the account and wait for the exchange.
Second Scenario: CADIVI denies the request
Although you did everything exactly as they asked, Cadivi still denied your request. Massive denials are being received by students around the world, particularly in the last month.
Sadly, you only have 3 options
- Try again and introduce a “reconsideration”.
- Go to the “black market” to get the foreign currency you need.
- Go back to Venezuela.
Going through reconsideration is a lost war. Your legal representative (mom, dad or the person in charge of your legal matters back home) has to go to the bank with a letter explaining your current situation; which they already know because it was one of the first requirements. Your legal representative probably has to submit more documents to support your request. Once again, you will need to wait 2, 3 or 4 months for their decision.
2. The Black Market
The only way besides CADIVI to have access to a foreign currency is going to the “black market” for selling/buying dollars in this case. This means buying dollars from independent people sources instead of those from the Central Bank. This is not legal but it’s the common practice.
You may be asking by now, why would people decide to go back to Venezuela if they have the option of getting dollars on the black market? Right? Here is the answer:
Math, simple math (Dollars vs. Bolívares — Venezuelan currency)
The Venezuelan Bolívar (Bs) is the currency of Venezuela (VEF). There are different exchange rates depending on what it is going to be used for. For academic purposes, for instance, the official rate is US $1.00 which is equivalent to Bs. 6.30.
In the Black Market the price for buying or exchanging bolivares into dollars is in constant change. There’s a popular website called dolartoday.com in which Venezuelans check, daily, the cost of the dollar.
According to DolarToday.com, October 22nd $1.00 is equivalent to Bs.100.52
That means that any Venezuelan needs to have 15 more times the amount of bolívares to get the same amount of dollars than going through Cadivi.
Insane, right? That explains why many students around the world are facing difficult times when being denied by Cadivi.
Finally, let’s see an example.
Master of International Business at Hult Business School
This example shows the life’s cost for an International student at Hult Business School for a one year Master program.
(*)Cadivi limits students to spend maximum $1,300.00 per month for personal expenses.
- In Venezuela, with Bs. 379,890.00 you can buy a KLR650 Kawasaki motorcycle.
- In Venezuela with Bs. 6,030,000.00 you can buy a 70m² apartment in Caracas (the capital of Venezuela).
- In Venezuela, the minimum wage is Bs. 4,251.78/month.
- In Venezuela, a professional with a Master degree and 5 years of work experience could expect to earn Bs. 25,000.00/month.
For collecting the money for the Master Program at Hult, after being denied by Cadivi:
- Venezuelan students need to have and sell 15 Kawasaki motorcycles.
- Venezuelan students need to have and sell an apartment in Caracas.
- Venezuelan students need more than 100 years to save the money with a regular job.
- Because no one lives more than 100 years, Venezuelan students need to find a really good job and save money for around 20 years.
Although Venezuela has the world’s largest known oil reserves and it’s the fifth oil exporting country around the world, crisis is everywhere, affecting the future of the ones who live there and the ones who have to go back.
3. Back to Venezuela
After seeing the cost of living for students who got rejected by Cadivi, it’s easier to understand why most of them have to give up their dreams and go back to Venezuela. The amount of bolivares that they need to finish their studies is absurd, and few families can afford it.
This is me…
Sad but true, this is the reason why Cadivi is an issue for all of us. This is why we fight for our rights of studying the career of our choice in the institution and country we like, without depending on an unreliable institution for getting access to foreign exchange. In the end, our true purpose is to become better professionals, to gain knowledge, and learn from the great experience of studying abroad,in order to one day go back to our country, and be part of a generation that is capable of making a change, and build the foundations for a better country.
Katy Da Silva