Venezuela: On the Brink

 

Lay off those chicharrones, because if you poop in Venezuela, you’d essentially be screwed. For those lucky enough to outlast the 97-degree heat during the average day in Caracas and somehow jostle your way into the ruins of a Venezuelan supermarket, you’d be ecstatic to find a single roll of 1-ply. You also probably wouldn’t know where to get the ingredients for chicharrones because of the rampant food shortages in Venezuela.

 

No fear, Nicholas Maduro is here! In a message to the public, Maduro, the country’s president (regrettably), had this reassurance to the Venezuelan public:

Paran de comer tanto!” or “Stop eating so much!”

This nugget of wisdom and the key role oil prices play in the Venezuelan economic crisis remind me of a quotation from the Republican nominee for President, Donald Trump: “If you look – look at – I mean, look at what’s going on with your gasoline prices. They’re going to go to $5, $6, $7 [a gallon] and we don’t have anybody in Washington that calls OPEC and says, ‘Fellas, it’s time. It’s over. You’re not going to do it anymore.’” As a response to this incoherent garble, someone obviously called OPEC (thanks Trump), because in July of 2014 the price of a barrel of oil lost 50% of its value. Now, as prices slip below 40$ a barrel, it’s easy to see why exporting nations in OPEC like Russia and Venezuela are struggling to compete with the aggressive Saudi supply of crude oil. Saudi Arabia has kept churning out oil to maintain a certain profit margin and isn’t cutting back on production any time soon. And when 95% of your country’s wealth comes from oil you are absolutely and inexorably fucked. And when I say fucked, I mean 755$ for condoms fucked. Yup, that’s how much they cost in Venezuela, and when your new lifeline for toiletries is Jamaica (this is 100% true), “fucked” takes on a whole new meaning.

In all seriousness, Venezuela’s economic woes are also a product of monetary policy. Foreign Policy explains: “Chávez also used Venezuela’s oil wealth to artificially depress prices on over 40 products, largely as a tool to maintain support among the country’s poor. It worked well enough when oil prices were high and the government had the cash to import goods and subsidize consumption.” But that’s not the case, and when Saudi Arabia signaled an increase in production of oil in 2014, and Venezuela started losing big bucks at an unprecedented rate, Venezuelan President Nicolás Maduro, who took the reins of government when Chávez died in 2013, failed to decrease interest rates and faced the full brunt of the OPEC oil catastrophe. At the macroeconomic level, Venezuela’s economy shrank by 8% GDP thus far in 2016, not to mention the 720% inflation rate that Venezuela incurred this year. And it doesn’t seem like this problem will be ameliorated anytime soon. Maduro even signaled an increase in oil production in 2016, and has yet to signal any shift to the agrarian, manufacturing sectors, etc. for economic sustenance.

Chavez and his constituency have flushed any possibility of financial reform down the toilet, and Maduro has learned no lessons. He continually silences those opposed to him by way of controlling the media or arresting “anarchical” politicians. Capitalism is a dirty word to the Venezuelan government and people, and it’s the “failures” of this Capitalism that Chavez capitalized on to rise to power in 1998.

 

So stop eating, Venezuelans, and don’t use hairdryers. No, not because your country has widespread electrical shortages and power surges, but because “your hair looks better when you dry it naturally”. And if you have the common cold, ‘flu, or HIV, sleep it off. You’ll feel better in the morning.

 

 

 

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