How Venezuela, Once Latin America's Richest Nation, Collapsed

[Marksman_91]

http://time.com/venezuela-brink/?xid=emailshare

In Venezuela the food lines are only the most visible evidence of a nation in free fall. Known as las colas, the lines form before dawn and last until nightfall, several bodies thick and zigzagging for miles in leafy middle-class neighborhoods and ragged slums alike. In a country that sits atop the world’s largest known petroleum reserves, hungry citizens wait on their assigned day for whatever the stores might stock: with luck, corn flour to make arepas, and on a really good day, shampoo.

“I never dreamed it would come to this,” says Yajaira Gutierrez, a 41-year-old accountant, waiting her turn in downtown Caracas. “That in Venezuela, with all our petroleum, we would be struggling to get corn cakes.”

In the capital’s Dr. José María Vargas hospital, a doctor watched a 73-year-old woman die of kidney failure because the hospital lacked the medicine to perform a routine dialysis. In a Caracas police station, more than 150 prisoners crowded into a cell made for 36, standing shirtless (there was no room to sit) in the stench of sweat and feces. In arid Lara state, an elementary-school teacher told of children fainting in class from hunger. The economy contracted by almost 6% last year, and is expected to shrink by as much as 10% this year.

My heart aches. I can't imagine how I will feel when I go back. It's been more than 2 years since I was last there.

[vlyons]

1. what are the causes of this economic contraction?

[DetlefK]

3. They were a major oil-exporter, the price collapsed, and they had no monetary reserves.

Venezuela is a socialist state with a strong and expensive social safety-net. Things worked just fine when the price of oil was high. Things worked so fine that Venezuela spent all the revenue on new projects and the social safety-net instead of setting some aside for reserves.

Then the price of oil collapsed. Venezuela has no longer money to import all the important things from abroad. So they are printing more money. And the currency is in free-fall with catastrophic inflation. There is nothing to buy (because no imports) and even if there is, people can barely afford basic food, because the inflation is making their wages worthless.

And President Maduro is doing nothing, because changing the economy of Venezuela would prove that Venezuela never had this perfect socialist economy. Instead he's just waiting and riding out the storm.





Either that or the evil US are destroying that innocent socialist state to pillage it. They are destroying it by... by... by doing... evil... things?

[EX500rider]

4. And their price and currency controls are making things worse..

.....you can't say you have to sell bread for $.50 when it cost $.75 to make, there won't be any bread....as it is.

And currency controls, all you have to know is they have several exchange rates at vastly different amounts, and none near the blackmarket actual exchange rate. So no US dollars to buy imports and no food on the shelves....all self inflicted wounds.

[exboyfil]

2. Here is a greatest hit from DU's past

http://www.democraticunderground.com/10022467442

[forjusticethunders]

5. But clueless white leftists will defend this

Because it's easier than admitting socialism needs to be fixed and revamped for a new era lol, and a lot of left ideologues flat out ignore key aspects of governance and social stability.

Just because right wingers want to make you think There Is No Alternative to capitalism doesn't mean we should shut down real discussion of how leftism is messing up.

[Marksman_91]

6. Amen. n/t