Chad Lundquist/Nevada Appeal
Venezuela, a beautiful Caribbean/South American country where I lived and worked for seven years during my diplomatic career, is on the verge of economic collapse due to falling oil prices and the sheer incompetence of its Socialist President, Nicholas Maduro, a former bus driver.
Ralph Kramden (Jackie Gleason) of “The Honeymooners” was a bus driver too, but he was much smarter than Maduro, as is Democrat presidential candidate Sen. Bernie Sanders of Vermont, a self-described Socialist. However, Maduro puts these guys to shame when it comes to mismanaging budgets and money.
Although Venezuela once provided an economic lifeline to Cuba, its Socialist neighbor in the Caribbean, it now has by far the weakest economy in South America, nearly four times worse than second-place Argentina. Here’s how Bloomberg Business News describes the situation: “With a crashed oil market that makes up 95 percent of its exports, the Venezuelan economy is spiraling into crisis under Socialist President Maduro, with shortages of (consumer) goods spiking violent crime, power outages and lack of medicine piled on top of a repressive regime.” Not a pretty picture. Bloomberg estimates Venezuela’s inflation rate will rise from 98.3 percent last year to 152 percent in 2016.
Other Latin American countries with deteriorating economies include Brazil (which will host the 2016 Olympic Games), Uruguay, Colombia and somewhat surprisingly, Costa Rica.
Things are so bad in Venezuela Barbie herself got caught up in the economic crisis during last year’s Christmas shopping season. The Associated Press reported in December “mothers, grandmothers and beaming little girls were grabbing armfuls of the doll in toy stores across Caracas, taking advantage of the government’s order that large chains sell the plastic figurines at fire-sale prices during the holiday shopping season.” As we know, Socialist governments manipulate prices, resulting in shopping riots and runaway inflation.
AP noted “Venezuela’s government has long imposed price caps on essential products from milk to laundry detergent, and threatened merchants who hoard goods or sell them at unfairly high prices with jail time.” President Maduro cut Barbie doll prices as part of his “Operation Merry Christmas” in order to prevent speculators from ruining the Holidays. This move was ironic because Maduro’s late predecessor, Col. Hugo Chavez, once denounced “the stupidity of Barbie . . . a tool for capitalist consumerism.”
Simultaneously, the Maduro government was also selling big-ticket consumer products like computers and refrigerators for a fraction of their true cost, which produced some happy shoppers along with hour-long checkout lines and the world’s highest inflation. Conclusion: Consumers like “free” stuff.
Although Venezuela’s oil-based economy has collapsed in recent years, many influential Venezuelans are hoping for a turnaround following an opposition victory in last year’s parliamentary elections, and there’s talk of removing Maduro from office before his term ends in 2019. How would that happen? An intriguing intelligence report from the respected Stratfor organization predicts “it’s becoming increasingly clear that President Maduro’s term could come to an abrupt end because both the opposition-controlled Legislature and Maduro’s own party are calling for him to resign.” And moreover, both parties “have already discussed . . . the possibility of forming a joint post-Maduro junta to govern the country.”
I always have two key questions when political crises occur in Latin America: (1) Who has the guns? and (2) Who counts the votes? In Venezuela the answers to both questions are “the Maduro government.” Stratfor asserts Maduro “has depended on the loyalty of the military” since Chavez died in 2013, but notes “those ties are now fraying.” Translation: If Maduro doesn’t keep military members happy, they’ll dump him. Stay tuned.
Guy W. Farmer is a retired U.S. Foreign Service officer.
