Editing Hugo Chávez (section)

====Currency controls====
{{further|Economy of Venezuela#Currency Black Market}}
[[File:Venezuela Black Market 2010-2014.png|370px|thumbnail|right|<span style="color:#4682B4">Blue line represents implied value of the [[Venezuelan bolívar#Hard bolívar|hard bolívar]] (VEF) compared to the [[United States dollar|US dollar]] (USD)</span><p style="color:#f00;"><span style="color:#f00;">The red line represents what the Venezuelan government officially rates the hard bolívar</span><br /><small>'''Sources''': Banco Central de Venezuela, Dolar Paralelo, Federal Reserve Bank, International Monetary Fund</small></p>]]
In the first few years of Chavez's office, his newly created social programs required large payments to make the desired changes. On 5 February 2003, the government created [[CADIVI]], a currency control board charged with handling foreign exchange procedures. Its creation was to control [[capital flight]] by placing limits on individuals and only offering them so much of a foreign currency.<ref>CADIVI, [http://www.cadivi.gov.ve/cadivi/cadivi.html CADIVI, una medidia necesaria] {{webarchive|url=https://web.archive.org/web/20081205143924/http://www.cadivi.gov.ve/cadivi/cadivi.html |date=5 December 2008 }}</ref> This limit to foreign currency led to a creation of a currency [[black market]] economy since Venezuelan merchants rely on foreign goods that require payments with reliable foreign currencies. As Venezuela printed more money for their social programs, the bolívar continued to devalue for Venezuelan citizens and merchants since the government held the majority of the more reliable currencies.<ref>{{cite web |last=Hanke |first=Steve |title=The World's Troubled Currencies |url=http://www.marketoracle.co.uk/Article41552.html |publisher=The Market Oracle |access-date=26 January 2014}}</ref>

The implied value or "black market value" is what Venezuelans believe the [[Venezuelan bolívar#Hard bolívar|hard bolívar]] is worth compared to the United States dollar.<ref>{{cite news |title=Venezuela's black market rate for US dollars just jumped by almost 40% |url=http://qz.com/192395/venezuelas-black-market-rate-for-us-dollars-just-jumped-by-almost-40/#/h/56869,3/ |access-date=27 March 2014 |newspaper=Quartz |date=26 March 2014}}</ref> The high rates in the black market make it difficult for businesses to purchase necessary goods since the government often forces these businesses to make price cuts. This leads to businesses selling their goods and making a low profit.<ref>{{cite news |last=Pons |first=Corina |title=McDonald's Agrees to Cut the Price of a Venezuelan Big Mac Combo |url=https://www.bloomberg.com/news/2014-01-14/mcdonald-s-agrees-to-cut-the-price-of-a-venezuelan-big-mac-combo.html |access-date=26 January 2014 |newspaper=Bloomberg L.P. |date=14 January 2014}}</ref> Since businesses make low profits, this leads to shortages since they are unable to import the goods that Venezuela is reliant on.<ref>{{cite news |last=Goodman |first=Joshua |title=Venezuela overhauls foreign exchange system |url=http://www.businessweek.com/ap/2014-01-22/venezuela-food-giant-warns-production-at-risk |access-date=26 January 2014 |newspaper=Bloomberg L.P. |date=22 January 2014 |archive-url=https://web.archive.org/web/20140214224213/http://www.businessweek.com/ap/2014-01-22/venezuela-food-giant-warns-production-at-risk |archive-date=14 February 2014}}</ref> Chavez used exchange rate subsidies to underwrite imports; this policy was not welfare-maximizing, but rather benefited special interests.<ref>{{Cite journal|last1=Gulotty|first1=Robert|last2=Kronick|first2=Dorothy|date=2021|title=The Arbitrage Lobby: Theory and Evidence on Dual Exchange Rates|journal=International Organization|volume=76|pages=105–125|language=en|doi=10.1017/S002081832100031X|issn=0020-8183|doi-access=free}}</ref>