Where's the most expensive McDonald's Big Mac in the world?
Clue: It's also homeplace of the world's cheapest gas.
Caracas, Venezuela — Venezuela might have the world's cheapest gas. But if you are heading through a McDonald's drive-thru, don't expect the same deal: It's got the most expensive Big Mac in the world.
The Economist's most recent "Big Mac" index shows that the McDonald's trademark will run you just over $9 in Venezuela, whose capital city Caracas now also ranks among the top 10 most expensive in the world, according to the Economist's cost of living index. It's the only city in the Americas to land in the top 10, sandwiched between Paris and Geneva.
Of course, as the Economist points out, cost calculations in the birthplace of Venezuelan President Hugo Chavez's "Bolivarian Revolution" are inflated. They are made using the country's currency controls, which peg the dollar at about a quarter of its street value.
Changing money on the black market is technically a jailable offense, but anyone who's entered a Venezuelan airport knows finding a trader is as easy as hailing a cab.
This is good news for travelers seeking a quick trip to Angel Falls, or for locals with access to foreign currency that they can exchange. But for most Caraqueños the city is no bargain.
Besides overpriced hamburgers, Venezuela has one of the world's highest inflation rates, which many economists blame on the "protectionist" policies of President Chávez. Analysts calculate that the average costs for a three-child family have jumped 19 percent over the past year. And on Friday, Venezuela devalued its currency by a third, which could potentially push up inflation even higher.
There are certainly some deals to be had though, even beyond cheap gas. For budget shoppers, for example, price controls and subsidies allow for low prices for many basic consumer goods.
But that's only when they are available. Sporadic shortages are also a part of life in Caracas and when store shelves are empty, it's common to see scarce goods being flipped for four times their worth on the streets.
Chávez has blamed the opposition for hoarding and speculating, causing shortages and price distortions. Critics of the Chávez administration say the problems stem from the government's failure to provide local businesses with enough foreign currency to meet import demands. Foreign goods are crucial to feeding the population, and when businesses can't get the dollars, they turn to the same black market used by locals and travelers, driving up costs.
Finger pointing aside, one thing is clear: Whether or not Caracas is the most expensive city in the Americas largely depends on which type of currency you're carrying.