September 21st, 2017

The Crisis in Venezuela: 9 Postcards from Hell

Team AEC

Venezuela is living a humanitarian tragedy. Which was once the richest country in Latin America suffers today a terminal crisis.

Victim of the socialist policies of the Chavista regime, Venezuela has become a serious warning for all countries that flirted with populism, violation of the rule of law and private property.

Below, nine postcards from the Venezuelan hell.

I. Economic Collapse

The drop in Venezuela’s GDP since 2013 has been 35% (and 40% per capita). To understand the magnitude of the catastrophe, we have to think that during the “Great Repression” of the United States fell 28% between 1929 and 1933.

II. A Poverty Never Seen

Poverty in Venezuela has reached 90% of the population.

III. Lack of Food

In early 2016, 70% of Venezuelans claimed that they ate 3 meals a day. By the end of 2016, that number dropped to only 34%.

IV. Financial Irresponsibility

Last May, the state-owned oil company PDVSA signed a “deal” with Goldman Sachs. In exchange for US$865 M the country pledges to pay, up to 2022, a total of US$ 3650 M. That is equal to an interest rate of 48% per year in dollars.

V. Miserable Salaries

The minimum wage in Venezuela is 7 dollars per month (approximately).

VI. Isolation

Delta Airlines is the airline which has most recently stopped flying to Venezuela. It joins a long list of air carriers such as Avianca, Air Canada, Alitalia, Aerolíneas Argentinas, GOL, Tiara Air, Lufthansa, Latam, Aeroméxico, and United Airlines.

VII. Brutal Repression

Only this year, 133 people have been assassinated by the Chavista regime in the framework of massive protests against the dictatorship.

VIII. Closure of Parliament

As Adolf Hitler in 1933 or Alberto Fujimori in 1992 did, the government of Nicolas Maduro dissolved the Parliament this year.

IX. The Hunger Horror

“Hot dog stands are street classic in Caracas. To stop to eat a sausage with a mountain of cabbage, onion, Ruffles, corn, yellow cheese, ketchup, mayonnaise and mustard, with open legs to avoid staining, is an unforgettable experience. Any afternoon, anyone who eats it and throws the napkin with the remains of sauce and some last corn stuck, will see a child running to rescue it to lick the wrap and ask for the last sip of the beverage can. Hunger wreaks havoc.” (Leonardo Mindez)

Federico N. Fernández is a Senior Fellow at the Austrian Economics Center and President of the Fundación Internacional Bases.

Source: Free Market Diaries

Translated into English by Florencia Barreiro.