As reported in the
Miami Herald:
A recent International Monetary Fund report that Venezuela will reach
a 720 percent inflation rate this year — the highest in the world — has
drawn a lot of media attention, but what I heard from a senior IMF
economist this week was even more dramatic.
Robert K. Rennhack,
deputy director of the IMF’s Western Hemisphere department, told me in
an interview that Venezuela is on a path to hyperinflation — the stage
where the economy reaches total chaos — and could reach a “total
collapse of the economic system” in 12 to 18 months if there are no
changes in economic policies...
Many Venezuelans believe the country will explode much sooner than in 12
to 18 months. Prices go up daily, supermarket shelves are near empty,
there are growing electricity shortages — Maduro has declared every
Friday in April and May a non-working holiday in order to save energy —
and crime statistics are skyrocketing...
Here are two comments from a
Reddit thread:
"Venezuelan
here, living in Venezuela. I shared with you guys what life was like
living in Venezuela a few months ago, but incredibly it has gotten
worse. Back then we didn't have that many power outages. Now there are
4-8 hour outages everyday. Weekends start on Wednesdays. Water is coming
super gross through the pipes. What I've noticed recently is that the
country has nearly stopped "moving". That and you hear about looting
nearly every week. Doing anything at the bank or at some public office
takes you so many, unnecessary days because of the power outages. Most people I feel don't even want to work anymore now because the
wages are too low and even if their wages were high there's not that
much to buy. Food is the new money in Venezuela. If you have a lot of
food then you are rich. It kinda feels like a Zombie Apocalypse but
without the Zombies."
"I
live in Venezuela and we don't even know how to prepare for what is
coming. All I can do is work hard to buy as much stuff as I can and save
a little bit in USD. Spending and getting into credit card debt seem
like good strategies (because of the high inflation rate and a lot of
things are cheaper here than abroad). However people like me don't really have a plan for when shit hits
the fan. I have a large family here, so feel responsible for them so I
won't leave the country. I have a good job and I'm able to buy the food my family requires. But still, I wonder how should I prepare..."
Read more here: http://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article73657547.html#storylink=cpy
Read more here: http://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article73657547.html#storylink=cpy
And this from the
Washington Post:
Venezuela, a country of 30 million that despite holding the world’s
largest oil reserves has descended into a dystopia where food, medicine,
water and electric power are critically scarce. Riots and looting
broke out in several blacked-out cities last week, forcing the
deployment of troops. A nation that 35 years ago was the richest in
Latin America is now appealing to its neighbors for humanitarian
deliveries to prevent epidemics and hunger.
The regime that
fostered this nightmare, headed by Hugo Chávez until his death in 2013,
is on the way out: It cannot survive the economic crisis and mass
discontent it has created. The question is whether the change will come
relatively peacefully or through an upheaval that could turn Venezuela
into a failed state and destabilize much of the region around it.
Take note Bernie fans. This is socialism at work.
ReplyDeleteYup. #FeeltheBern
DeleteYou mean like socialism in Norway, Sweden, Finland, Denmark, The Netherlands, Germany?
DeleteThis is all again the problem of trying to make an economic or political system "pure." You can't do it. Whatever approach you take, you have to soften the edges of the system so that it works with actual people and not the theoretical people you expect to populate the "pure" realm. This is why capitalism needs regulation; this is why socialism needs a healthy dose of greed as a motivating factor.
Lurker111
Well said!
DeleteIf Venezuela collapses, that might create a huge sinkhole that will just suck the whole Caribbean down in to it! Not to mention a tidal wave that could reach all the shores.
ReplyDeleteThis is not a problem of socialism per say, but a problem of putting all one's eggs in one basket, i.e. depending on one source, oil with its fluctuating value, for 95% of your country's income. With a seemingly endless supply of product(oil) and foreign income it was cheaper to buy foreign than to produce locally hence the lack of food and most basic supplies.
ReplyDeleteThis is not a problem of socialism per say, but a problem of putting all one's eggs in one basket, i.e. depending on one source, oil with its fluctuating value, for 95% of your country's income. With a seemingly endless supply of product(oil) and foreign income it was cheaper to buy foreign than to produce locally hence the lack of food and most basic supplies.
ReplyDeleteLots of problems with that theory. Oil accounted for 27% of the GDP, which is significant. However, there are 7 other countries in the world which have a higher share of their GDP from oil. All are hurting a bit, but none are teetering on the brink.
DeleteFurther, Venezuela already was rife with problems well before the price of oil crashed in 2014. Things are far worse now, of course.
There are a lot of factors involved,but one of them most certainly is their brand of Socialism, which ruined the currency, incentive to work, made it illegal to prepare ahead of time for hard times, and had such overarching control and corruption over everyday life and items.
Chávez was more Communist than Socialist. And Bernie Sanders is a Democratic Socialist--sort of like the Scandinavian countries, as Anonymous pointed out. Lurker has a great point, too.
ReplyDelete