Posted on 06/23/2016 3:10:44 PM PDT by Mrs. Don-o
A humanitarian crisis, the likes of which have never been seen in the Western Hemisphere, is brewing in Venezuela and it will be inevitable in a few weeks.
Much has been written recently about the crisis in Venezuela. During the last week, the world’s leading media outlets have amply reported the shortages of food, medicine and other basic supplies in the country. Unfortunately, despite some great reporting by various journalists, the true extent and the reasons for the country’s desperate situation have not yet been clearly understood by the media and the international community.
The majority of those reporting on Venezuela still believe the current crisis has been caused by the collapse in the oil price. If that were true, other countries dependent on their oil export revenues, such as Nigeria, should be facing a similar situation. That is not the case. Nigeria is suffering a severe economic downturn, but it is far from suffering the extreme shortages of food and medicine that Venezuelans now face.
Apparently the world has forgotten that food lines first appeared in Venezuela in early 2014, when the price of oil was still over USD $110 per barrel. Venezuela first suffered an extreme shortage of toilet paper in 2013, nearly two years before the collapse of the oil price
Also, even now, with oil below USD $50/barrel, Venezuela has an export income larger than that of Peru, a country with identical population and where there are zero reported shortages of any kind.
The estimate for Venezuela’s export income this year would place it at an amount almost equal to that of Colombia, a country with nearly double the population of Venezuela. Thus, it is incontestable that the decline of oil income is not the cause of the tragic situation in which Venezuelans find themselves.
Venezuela No Longer Has a Functioning Economy
The fact is that Venezuela, while still pumping oil, no longer has a functioning economy. Seventeen years of nationalizations and confiscation of private industries, farms, cattle ranches, distribution companies, sugar mills, and even shopping malls have completely destroyed not only the local production, but the distribution networks necessary for the normal functioning of the economy.
Ninety percent of confiscated and nationalized companies and farms no longer produce anything. SIVENSA, a private steel company formerly with over USD $1 billion in sales, mostly for export, now has negligible production. A country that during the 1980s boasted about having Latin America’s highest levels of production of cement, which it exported to the USA, now has a shortage of cement, even with insignificant construction levels. For most of the 20th century, Venezuela was among the world’s largest coffee producers. Now, the coffee that Venezuelans drink, if they can find any, comes from Nicaragua.
In addition, a draconian system of price controls that forces most local businesses to sell their wares at a loss has halted any attempts by local entrepreneurs to keep their businesses alive. Thousands of businesses have been closing every week.
While the government intentionally tried to substitute private operators with government companies, which were almost always run by corrupt army officers who know nothing of the industries they were entering, shortages of every kind, not just of food and medicine, began to occur. Currently, there are no tires, no car batteries, no auto parts to be found, except through good connections with the military or in the black market.
The distribution fleets of Venezuela’s largest companies have been depleted to the point of no longer being worthy of the word “fleet.”
In 2004, Hugo Chávez dismantled the old 10,000 strong Caracas Metropolitan Police and other police forces in the country. Since then, crime has skyrocketed, but now it has reached a level unthinkable in civilized societies.
At the Caracas Country Club, the country’s most expensive, and formerly most exclusive neighborhood, home to dozens of ambassadorial residences, there are now at least three kidnappings per week. Entire swaths of Venezuela’s largest cities, particularly in poor neighborhoods, are now ruled by gangs under the control of no authority.
There’s No Capital in the Country with the World’s Highest Inflation Levels
Inflation has reached a level close to 1,000%. Prices fluctuate on an hourly basis. In a country that had a GDP of half a trillion US dollars in 2012, the total amount of lending that the entire Venezuelan banking system can offer, due to devaluations and bank regulations, now amounts to merely US$ 170 million. It would now take a pool of banks to finance the construction of a 20 unit apartment building
As a result, credit has become non-existent and companies without access to capital have closed in ever larger numbers. These are businesses that were essential suppliers of key products, such as pharmaceuticals or medical devices.
This week, after days of widespread looting around the country by desperate citizens going hungry, trucks have been assaulted by organized mobs waiting at the edge of roads for any sign of a delivery carrying anything edible. This has further disturbed the already precarious distribution system for basic goods as truckers prefer not to work rather than risk losing the main asset for their livelihood.
All this will only get worse unless there is an immediate change of government in Caracas. Venezuela desperately needs the immediate dismantling of all regulations devised by the communist clique ruling the country and their inept Cuban advisers.
Maduro’s Incompetent Regime Has to End
Even if the Maduro government were to try a 180 degree change and embrace capitalism overnight, the regime lacks the knowhow to improve and rebuild the country’s supply chain, and provide the needed security to achieve it.
The Maduro government, full of corrupt army officers, drug dealers, and communist apparatchiks, simply cannot even begin to tackle the problem they created.
It's Not about the Price of Oil: 21st Century Socialism Destroyed Venezuela's Economy and Distribution Networks, Causing an Unprecedented Humanitarian CrisisVenezuela: mass famine is imminent due to the Chávez-Maduro regime’s destruction of the productive economy.
At the PanAm Post we warned about the consequences of Maduro’s actions nearly three years ago
Now, what we can see is much worse than even we imagined.
The leaders of all countries in the hemisphere, except for Castro’s Cuba, are meeting now in Washington DC. These leaders will be remembered as those responsible for the first mass famine in the Americas, and the world will not forgive them.
Iffier’n hell. Even if rainstorms fill the reservoirs, they cant get the tools and supplies to do even routine maintenance on any of their infrastructure, including hydro power.
Let us not forget that Venezuelans got the form of government that they voted for. They must feel the bern of their choice. If they don’t feel the bern good and hard, they will go right back to socialism once sufficient outside resources are made available to them.
That is the very nature of socialism: socialism destroys the price signal in the economy by government edict. Without being able to know what things cost to make, nobody can know how much they must be sold for. Without profit, assets are consumed. Without assets, no new goods can be created.
So of course it is almost redundant to say that the country is on the brink of famine and the country has no working economy. Socialism can only function when it can access outside resources that make up for the resources that are destroyed by the effect of the socialist government policies.
Completely understandable.
Stay safe, my FRiend.
Once Freedom is lost. You never get it back.
Will Obama invade?
“Once Freedom is lost. You never get it back.”
Well, not without bloodshed. That’ why the left wants so desperately to disarm us.
“All of the conditions for a successful popular uprising to overthrow the Maduro regime already exist. Venezuela does NOT need, and is not asking, the International community to actively intervene. What it DOES need, and IS asking for, is that the International Community recognize the truth, condemn the existing regime, and acknowledge its lack of constitutionality and democratic legitimacy. When the Opposition controlled National Assembly declares that the president and supreme court are unconstitutional, they need the International Community to understand why, and to not call it a “Coup” and support the illegitimate regime, such as occurred in Honduras.”
I just imagine Obola will “jump right on this matter, not!” In the meantime Travis, stay safe! The US won’t be able to help Venezuela until mid-January next year.
As the Venezuelan people begin to die like flies—still no criticism of Socialism from Bergoglio.
Bernie supporters: “Let’s make America Venezuela!” Ber-NIE! Ber-NIE!
Take care, please.
Paging Danny Glover...
Somewhere in past days saw a reference to commerce occurring cross border, farmers selling in neighboring countries, using another countries currency($-?) for all transactions. Whomever is controlling border traffic must be aware, if not fostering this for a percentage.
The next likely power block in the country may well coalesce from this border region.
Bill Microsoft (can’t remember his real last name, think I’m loosing my memory) tried sending a million chickens to poor families in some Central or South American nation which refused the chickens because they considered it an insult as there were all ready a thriving poultry industry in their country. So why doesn’t he send them to Venezuela, instead?
Twas Bill Gates. He was donating 100,000 chicks, which is really not very many. Enough to supply maybe 15,000 families with egg-layers, and considerably less people than that if they were raising them for meat as well as eggs.
It wouldn’t be enough for Grundy County, TN.
I sort of agree. I think we already passed the point of no return. I’m not sure how much longer we’ll go I hope it is at least 2 years, but preferably longer.
Gives more time to get ready. If I was rich enough, I’d already be done. Have been getting ready bit by bit during the last decade.
Always.
Thanks.
Socialism the the crime of the century.
If there’s nothing in it for me, why should I bother to plant, raise and harvest more than my own family and circle of friends needs?
The Mexicans, Hondurans, Guats, etc. as well.
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