Monday, May 16, 2016

The Western Hemisphere's Economic Basket Case

"[I order] all actions to recover the production apparatus, which is being paralyzed by the bourgeoisie."
"Venezuelan business people who sabotage the country [through halting plant production will be] put in handcuffs".
"Washington is activating measures at the request of Venezuela’s fascist right, who are emboldened by the coup in Brazil."
Venezuelan President Nicolas Maduro
Venezuela’s President Nicolas Maduro speaks during a meeting with ministers at the Miraflores Palace in Caracas. | Photo: Reuters
"If you obstruct the democratic way, we do not know what could happen in this country."
Opposition leader Henrique Capriles

"You can hear the ice cracking. You know there's a crisis coming."
Senior U.S. intelligence official

Venezuela's natural resource of the world's largest oil reserves, at 298 billion barrels, enabled the late Hugo Chavez to buy the loyalty of his country's marginalized population. That wealth was used by     then-President Chavez, when oil was at a high-per-barrel demand, to mount a populist program heavy on wealth distribution from the wealthy to the poor. Although the government of Venezuela was swimming in revenues it invested none of it in upgrading its oil-extraction and -refinement infrastructure.

But it did subsidize oil to its neighbours, to its great supporter, Cuba, and even to the poverty-stricken in the United States where most of the Venezuelan oil was exported and where he delighted in showing his credentials as a radical. Now, a failing economy with a rampant inflation, imports oil from the United States, its mortal enemy. Under Chavez, and now under his protege, Venezuela consolidated warm relations with Iran and Libya, while blaming the U.S. for plotting its downfall.

Venezuela's poor and its disadvantaged continue to give full loyal support to the Chavista-style of governance where foreign investment shies away from an empty treasury in the country which seized assets of foreign investors, nationalized their companies, persecuted regime critics and stimulated an exodus of the nation's scientists, doctors and entrepreneurs who left in favour of starting over elsewhere.

In a country dependent for 94 percent of its earnings from oil exports, the collapse in oil prices means a collapse in the subsidizing of schools, health clinics, gasoline and basic foodstuffs. Venezuela, already beset with a high rate of violent crime has become the most violent and crime-ridden nation in the world. Where mass looting attacks take place and energy blackouts are common occurrences.

Most recently, public employees were placed on a mandatory two-day work week to economize power usage. Hours and days are spent on food lines and food riots take place, injuring people. There were only 15 days' worth of inventory left, according to the Venezuelan Chamber of Food. This, in a country where 45 percent of citizens admit to struggling to secure money to feed their families.

A petition to force President Nicolas Maduro to resign though his mandate is through to 2019 has acquired over two million signatures. This nation of 30 million people is suffering, and they want an end to their hopeless travail. Shortages of food, of medicine, or toilet paper, of hope and opportunity, is draining peoples' patience at the state of their country's fortunes, in ruination thanks to its extreme form of socialism.

Crowds demonstrate in Caracas, demanding that the National Electoral Council rule for the validity of the signatures favouring a referendum to allow the country to move forward. Yet a decree was given granting Maduro expanded powers in the face of this deep economic crisis. Presidents Chavez and Maduro succeeded in changing the constitution by invalidating term limits. Their loyalists pack key institutions.

Secretary General Luis Almagro at the Organization of American States may call for a special session to debate Venezuela's crisis, and to enable a vote on measures that might include expelling Venezuela from its membership; at the very least to rebuke the Maduro government for its administrative failures.

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