Venezuela is unusual for South America. It is a country with natural wealth of such magnitude that it should be the richest, most successful place on the continent. Instead, it is today a hellhole filled with starving, unhappy people, a collapsing economy, and a political crisis the outcome of which could shape South American politics for a long time.
Let's start with the wealth. Venezuela has oil and more oil. It has the ability to produce and sell enough oil to satisfy all of its needs. For decades, that oil wealth helped produce a productive and growing economy which covered most people in that nation. That all stopped more than a decade ago when Hugo Chavez got elected to lead the country. Chavez was a Socialist who was strongly pro-Cuban and anti-American. Chavez imposed all sorts of economic controls on the country and used the oil revenues to support his plans. Chavez also took away the chance for most of the oil majors to make money in Venezuela. As a result, the Venezuelan oil industry started to decline. Wells were completed at a slower rate and production declined. Then the world oil price fell a bit and Venezuela went into free fall. Today, we have Chavez's successor who is basically Chavez without the charisma or the intelligence. Venezuela is run by a Socialist thug.
The remedy of the current government to all problems is first to blame the USA, and then to impose more government control. The problem is that the economy has reacted much the way the Soviet economy reacted in the 1980s: production has fallen and inflation has become rampant. People are starving. Nothing is being imported because no one can pay for it.
Right now, there are daily riots and protests. There will shortly be the final confrontation between the government and the people. If the people win, Venezuela has a chance. If Maduro and his thugs win, Venezuela will be a failed state for many years to come.
Let's start with the wealth. Venezuela has oil and more oil. It has the ability to produce and sell enough oil to satisfy all of its needs. For decades, that oil wealth helped produce a productive and growing economy which covered most people in that nation. That all stopped more than a decade ago when Hugo Chavez got elected to lead the country. Chavez was a Socialist who was strongly pro-Cuban and anti-American. Chavez imposed all sorts of economic controls on the country and used the oil revenues to support his plans. Chavez also took away the chance for most of the oil majors to make money in Venezuela. As a result, the Venezuelan oil industry started to decline. Wells were completed at a slower rate and production declined. Then the world oil price fell a bit and Venezuela went into free fall. Today, we have Chavez's successor who is basically Chavez without the charisma or the intelligence. Venezuela is run by a Socialist thug.
The remedy of the current government to all problems is first to blame the USA, and then to impose more government control. The problem is that the economy has reacted much the way the Soviet economy reacted in the 1980s: production has fallen and inflation has become rampant. People are starving. Nothing is being imported because no one can pay for it.
Right now, there are daily riots and protests. There will shortly be the final confrontation between the government and the people. If the people win, Venezuela has a chance. If Maduro and his thugs win, Venezuela will be a failed state for many years to come.
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