Young Voices Advocate, Katarina Hall, joins Liz Wheeler on The Tipping Point to share the latest in news out of Venezuela. She calls in from Guatemala to break down the faux election, arrests of opposition leaders and the descent into socialist dictatorship
Once the richest country in Latin America, Venezuela is suffering its worst ever economic crisis. Inflation is sky high, products of necessity like food aren’t available, and there are shortages of most medicines and medical supplies. Poverty is crushing large parts of the population, there is high malnutrition, and infant mortality is rising at dangerous rates. Given these conditions, it is not a surprise that Venezuela has become a common feature in international news.
Venezuela presence in the media started after the massive protests in different cities around the country that began in March of this year, since the Supreme Court of Venezuela released a decree to take the functions of the National Assembly of opposition majority which was considered a coup d’etat by the opposition.
Read more in Counter Punch
Venezuela has come under the international news spotlight in recent months and weeks thanks to a dramatic implosion that is roiling the country. The oil-rich Latin American state is presently the scene of numbing economic deterioration, social decay and human suffering. As reports in recent weeks particularly indicate (see this one), the crisis afflicting Venezuela at the moment is fast degenerating into an appalling humanitarian nightmare. For the culprits, toxic socialist policies and concomitant social pathologies unleashed on the Venezuelan state for decades are identified. As the country battles for survival through this tragic yet dramatic instance of the unraveling of a socialist state in the 21st century, alarmed international spectators may find the following important lessons taught or reinforced by the horrific disaster currently unfolding in the country.
- Dependence on natural resources brings disappointment – Venezuela’s journey to this calamity has been spurred by the sustained drop in international crude oil prices that has cut the country’s revenue from the export of crude oil. Oil revenue accounts for around 95% of Venezuela’s foreign earnings. Anti-free market policies adopted in the country in recent decades, such as extensive nationalization of companies or their assets, have denied the domestic economy the shock absorption capacities of a well-diversified economy. Private domestic and foreign investment in especially the non-oil sectors of the country’s economy have been effectively crowded out. Therefore, confronted with a virtual closure of the country’s petrodollar spigot, it is currently scraping for an economic lifeline while flailing before serious threats of state collapse.
- Price controls are harmful – Acute shortages of basic life necessities from food to medicine and diapers to deodorants and toilet papers etc. as reported in Venezuela, shows the harm price controls by the state can inflict on an economy. As the government sought to control the prices of these items and others through price ceilings, their supply dwindled, leading to daily long queues of customers searching for these basic necessities.
Read the full article at the Rational Standard.