CARACAS—McDonald’s is telling a lie. Or it is in Venezuela.

At a downtown Caracas outlet of the famous fast-food restaurant chain, an advertising poster is promoting “McDuos,” an offer that includes a Big Mac and a medium soft drink “for just one price” — 73 Venezuelan bolivars.

But that is not one price at all.

Depending on which exchange rate you use — the unrealistic official one or its vertigo-inducing black-market counterpart — that lunchtime burger combo is going to set you back the equivalent of a hefty $11.59 or else it’s a South American steal for only 84 cents.

No wonder they call Venezuela the world’s least expensive country. On the other hand, it’s also among the priciest.

It all depends on the exchange rate you use, and the result can leave you either pretty darned happy or else very, very mad.

These days, a lot of Venezuelans are not happy at all. They blame soaring crime rates and what they see as an oppressive government, but the high cost of foreign exchange is a big source of unease as well.

“There is no foreign exchange,” grouses Jean Carlos Cano, manager of the Nacho bookstore in central Caracas.

Greetings from the front lines of the dollar wars, an increasingly violent conflict in which roughly 12 lives have been lost and dozens of people injured, as this deeply divided South American country struggles through its worst turmoil in years and as a self-proclaimed “revolutionary” government carries out its plan to impose a socialist system in a land where about half the population is bitterly opposed.

“If I was a member of the Venezuelan middle class, I would be terrified,” says Larry Birns, director of the Council on Hemispheric Affairs, a Washington think-tank. “The country is heading for a social conflict.”

A lot of Venezuelans would say it’s already there.

“I’m against the criminality, the inflation, the economy, the lack of food,” says Williams Garaban, a Caracas lawyer who is working his cellphone outside a downtown mall.

He is also, it’s safe to assume, against the high price of dollars.

There is a paradox here because the cost of dollars in Venezuela is quite low — either 6.3 or 11.8 bolivars to the dollar on the two-tiered system the government set up four years ago.

But that system isn’t working anymore.

“The basic issue with the exchange rate is that the demand for dollars in Venezuela is actually quite high,” says Harold Trinkunas, a Venezuela expert at the Brookings Institution in Washington.

After all, about two-thirds of basic consumer goods in Venezuela have to be imported, but the only legitimate source of dollars is the federal government, which spends a lot of that currency on its socialist revolution.

“They have committed the country to major social reforms,” says Birns. “It’s an ambitious program in which major acts of corruption have occurred.”

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Venezuela’s revolutionary largesse is funded by the petroleum industry, a state-owned monopoly that accounts for 95 per cent of the country’s foreign earnings. With a degree of generosity it can no longer easily afford, Caracas sells most of its oil at subsidized prices to countries as close as Cuba and as distant as China and India.

None of this was a problem when oil prices were high, but now they are falling.

Nowadays, if you need dollars, you can either line up at the dollar-depleted central bank — and good luck to you — or else work something out on the street, where precious greenbacks are selling at a black market rate of 87 to the dollar. “A lot of importers have to go to the black market to get dollars,” says Trinkunas.

Or they do if they can afford it. Many cannot.

The result is an ongoing scarcity of consumer goods, from sugar and flour to powdered milk and motorcycle parts, that enrages many Venezuelans.

The government has responded largely by printing more money. The bricks of 100-bolivar banknotes needed to purchase even a modest quantity of U.S. cash on the black market are invariably crisp, shiny and new.

But the result has been inflation, which last year reached an annual rate of 56 per cent, among the highest in the world.

“They’re still trying to manage this as a cash-flow problem,” says Trinkunas.

In an effort to ease the shortage of foreign currency, the government has lately added a third tier to what was a dual official exchange rate, allowing purchasers to bid on foreign money, a measure that introduces an element of supply and demand to the system.

Maybe this will work. Maybe not.

In the meantime, get your McDonald’s McDuos at the low, low price of 84 cents while you can — and pray that Venezuelans bridge their differences peacefully.

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