Socialism creates humanitarian disaster in Venezuela

Juan Carlos Hidalgo:

Venezuela's accelerating economic meltdown is rapidly turning into a full-fledged humanitarian crisis. For too many in that country, the pervasive shortages of food, medicine, electricity, and other basic goods are making everyday life a nightmare. It is Venezuela’s version of the “winter of discontent,” except that it has been brewing for much longer and its unfolding consequences are far more frightening.

Margaret Thatcher’s dictum that the problem with socialists is that “they always run out of other people’s money” faced a unique challenge in Venezuela: during the course of a decade and a half, the government received nearly $1 trillion in oil revenues— the equivalent in today’s money of more than seven Marshall Plans. This was enough to mask the effect of hundreds of expropriations, stifling economic controls, and otherwise running the private economy into the ground.

Part of the windfall was spent on social programmes, which temporarily improved some social indicators and made the regime popular among poor Venezuelans. But a couple of years ago, the then minister of education admitted that the aim of the regime’s policies was “not to take the people out of poverty so they become middle class and then turn into escuálidos” (a derogatory term to denote opposition members). In other words, the government wanted grateful, dependent voters, not prosperous Venezuelans.

What defenders of the Bolivarian revolution have seldom acknowledged is that a significant portion of the oil revenues was simply stolen. It is difficult to specify an exact figure thanks to the government’s opaque finances, but two former ministers-turned-critics claim that it amounts to $300bn— an estimate consistent with independent analysis. No wonder Transparency International ranks Venezuela alongside Haiti as one of the two most corrupt countries in the Western Hemisphere.

Thatcher’s axiom did eventually catch up with Venezuelan socialism. Even when oil prices were hovering above $100 per barrel, the government’s finances went increasingly into the red. Now that a barrel of Venezuelan crude is trading at only $25, the situation has reached a breaking point. External debt has gone up by 115 per cent in the last decade and inflation is out of control: the IMF says it will reach 720 per cent this year. The situation is so bad that the government recently had to use 36 Boeing 747 cargo planes to import five billion notes of its worthless currency.

Behind the macroeconomic figures is a deepening humanitarian crisis. The government lacks the dollars to pay for imports which, compounded with price controls and their devastating effect on production, has caused widespread shortages. People queue for hours only to find empty shelves in government-run supermarkets. Even if they’re lucky, they can only buy a few products— in return for which they must undergo fingerprint scanning under the country’s rationing system. A national poll found that the percentage of Venezuelans eating two or fewer meals a day increased by more than 10 percentage points last year. Looting is now a common occurrence.
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There is more.

Bernie Sanders take note.  Venezuela can not claim it was caused by a US boycott.   The theft is only partially blamed for a real world failure of socialism which clearly does not work.  The problem was compounded by the attempt by the government to repeal the law of supply and demand which has made products scarce and caused disastrous rationing.  Healthcare has also gone into the tank even with the "help" of Cuban doctors.