Venezuela, also known as República Bolivariana de Venezuela), is a federal republic located on the northern coast of South America. It is bordered by Colombia on the west, Brazilon the south, Guyana on the east, and the islands of Trinidad and Tobago to the north-east. Venezuela’s territory covers around 916,445 km2 (353,841 sq mi) with an estimated population around 33,221,865. Wikipedia
So, to give you some way of visualizing the size of the population, Venezuela possess the population size between our number 1 and number 2 states —- California at the upper end (39 million) and Texas (28 million). So we can agree that it is a very populated country.
It is also a country of extreme biodiversity. Why is this important? Because this country is essentially “blessed” with the Andes Mountains, rain forest, plains lands, AND a Caribbean shore! Along with the diverse land, it is home to a wonderful array of natural species, in fact it ranks as the 7th most “blessed” nation for its varieties of animal life. In addition, the climate is really not bad. Amazing!
Since the discovery of oil in the early 20th century, Venezuela has the world’s largest oil reserves and has been one of the world’s leading exporters of oil. Previously an underdeveloped exporter of agricultural commodities such as coffee and cocoa, oil quickly came to dominate exports and government revenues.
So we have now established that Venezuela, as far as its God given attributes, had a perfect framework – in as far as its diverse land, plentiful wildlife, and of course these favorable natural attributes gave rise to the plentiful population. But with the natural resources producing bountiful harvests, oil, favorable and variable climate, access to waterways, etc…….. What could possibly go wrong?
So, along comes the man-made constructs or leadership, personal ambition, mis-management and greed:
Venezuela gained full independence from Spain as a separate country in 1830. During the 19th century, Venezuela suffered political turmoil and autocracy, remaining dominated by regional caudillos (military strongmen) until the mid-20th century. Wikipedia.
Since 1958, the country has had a series of democratic governments. Economic shocks in the 1980s and 1990s led to several political crises, including the deadly Caracazo riots of 1989, two attempted coups in 1992, and the impeachment of President Carlos Andrés Pérez for embezzlement of public funds in 1993. A collapse in confidence in the existing parties saw the 1998 election of former coup-involved career officer Hugo Chávez and the launch of the Bolivarian Revolution, beginning with a 1999 Constituent Assembly to write a newConstitution of Venezuela. This new constitution officially changed the name of the country to República Bolivariana de Venezuela (Bolivarian Republic of Venezuela).
So, the country went through political turmoil…… but is that the only thing? Nope…..
In late 2001 Chavez introduced land reform and oil industry reform legislation that touched on the elite’s two most important sources of economic power. In reaction to this move, the opposition launched the April 2002 coup attempt and the December 2002 oil industry shutdown. These efforts at political and economic destabilization provoked a massive bout of capital flight in early 2003. At first, the government tried to counter the capital flight by intervening in the currency market, using its dollars to purchase the bolivar, in order to keep its price stable. However, this caused the central government to lose dollar currency reserves precipitously and so it abruptly changed gears and introduced a fixed exchange rate in March of 2003.
Afterwards, the currency has been fixed and adjusted very rarely. Only those who meet government conditions to buy dollars with bolivars are allowed to do so. The conditions for gaining access to the official exchange rate include international travel, supporting a son or daughter with their studies abroad, or – most importantly – importing essential goods into Venezuela, among several other types of uses. Of course, almost immediately a black market for dollars sprung up, with an exchange rate that was very different from the official one. At first the official exchange rate was 2.15 bolivars per dollar, while the black market rate quickly reached double or triple that rate.
In mid-2008 the global financial crisis struck and drove the price of oil down from $140 (U.S.) per barrel in mid 2008, to less than $40 (U.S.) per barrel in early 2009. Suddenly the government could no longer cover all of the imports with its oil industry earnings and so in June 2010 the government introduced a new exchange mechanism, SITME, which sold dollar-denominated bonds that could be bought in bolivars at an exchange rate that was double that of the previous rate.
Another measure that the government took during this time was to restrict access to dollars at the official exchange rate. That is, the conditions under which Venezuelans could access dollars were significantly tightened. Fewer dollars were available for travel, for study abroad, and for a more restricted list of imports. The consequence of this action was that the black market exchange rate shot up during this period, going from about 8 bolivars per dollar in 2011, and to 16 in 2012.
I know this is a bit boring but the economic underpinnings as well as the actions of leaders have the ability to change things drastically for a country.
Since fewer goods could be imported at the official exchange rate, more and more importers began to use the black market to import goods, thus driving up inflation. Even if they used the official exchange rate, rather than undercutting importers who had to pay for goods at the black market rate, people knew that they could make a killing by pricing goods at the far higher black market rate and thus did so. Thus corruption.
But let’s back up a bit to the early 2000’s and speak about social policies —- prior to the 2008……. because nothing happens in a vacuum…..
The recovery of oil prices in the early 2000s gave Venezuela oil funds not seen since the 1980s. The Venezuelan government then initiated populist/revisionist policies that initially boosted the Venezuelan economy and increased social spending, significantly reducing economic inequality and poverty. Chavez, was a powerful leader with a populist platform based upon “sharing the wealth”. This was done through the “re-distribution of wealth” among those in the barrios who was essentially his political base. Chavez came into power in Venezuela promising the people that had been left on the margins and ignored by the political class in that country a new opportunity to participate in the economy, participate in the decision-making in the country,”
Under Chavez, specialists were sacked and replaced by party loyalists, foreign oil contracts were radically altered or canceled, making investment in Venezuela risky business for international firms. Venezuelans’ quality of life improved at the third-fastest pace worldwide and income inequality narrowed during the presidency of Hugo Chavez, who tapped the world’s biggest oil reserves to aid the poor.
“He gave a third of the population a sense that they mattered, the material benefits they got are part of his legacy,” said Julia Sweig, a senior fellow at the Council on Foreign Relations, said by phone from outside San Francisco. “But he destroyed the village in order to rebuild it, taking property, spending oil money without reinvesting, mismanaging the resources.”
Homicides rose 23 percent in 2012 to 16,030 from 13,080 in 2010, according to a report Maduro presented to the National Assembly Feb. 28. The Venezuelan Violence Observatory, a non- governmental organization, puts the number higher, estimating 21,692 people, or 59 people a day, were murdered in 2012. The murder rate of 73 per 100,000 inhabitants is the highest in South America. In the U.S., the murder rate was five per 100,000 in 2009, three times that in Chicago, however.
Some critics have claimed that the reason for the failure of the late Hugo Chavez has been that even though he might have improved the distribution of wealth and for a time the plight of the poverty stricken, there was no clear path towards wealth creation. Most of the changes instituted were not sustainable. Under theeconomic policy of the Nicolás Maduro government, greater shortages occurred due to the Venezuelan government’s policy of withholding United States dollars from importers with price controls. Shortages occur in regulated products, such as milk, various types of meat, chicken, coffee, rice, oil, precooked flour, butter prices; and also basic necessities like toilet paper, personal hygiene products and medicine.. As a result of the shortages, Venezuelans must search for food, wait in lines for hours and sometimes settle without having certain products. Wikipedia
In February 2015, there was an 80-90% shortage rate of milk (powdered and liquid), margarine, butter, sugar, beef, chicken, pasta, cheese, corn flour, wheat flour, oil, rice, coffee, toilet paper, diapers, laundry detergent, bar soap, bleach, dish, shampoo and soap toilet.
In March 2016, it was estimated that 87% of Venezuelans are consuming less due to the shortages. There was a 50% to 80% rate of food shortages with 80% of medicine was in short supply or not available.
But is there wealth in Venezuela, you ask? Well, yes there is……. During his lifetime, Hugo Chavez denounced wealthy individuals, once railing against the rich for being ‘lazy.’
‘The rich don’t work, they’re lazy,’ Chavez railed in a speech in 2010. ‘Every day they go drinking whiskey – almost every day – and drugs, cocaine, they travel.’The daughter of Hugo Chavez, the former president who once declared ‘being rich is bad,’ may be the wealthiest woman in Venezuela, according to evidence reportedly in the hands of Venezuelan media outlets.
Maria Gabriela Chavez, 35, the late president’s second-oldest daughter, holds assets in American and Andorran banks totaling almost $4.2billion, Diario las Americas reports.
The figure would make Gabriela Chavez wealthier than media mogul Gustavo Cisneros, whom Forbes named the wealthiest Venezuelan earlier this year with $3.6billion in assets.
In this election year, remember the people arguing that “wealth is bad” yada, yada, yada are only talking about YOUR wealth…. not theirs or their family’s wealth. The Native American “shrilly” decrying Donald Trump as a “money grubber” is worth millions. Warren, the Harvard bankruptcy law professor elected to the Senate in 2012, is worth between $3.7 million and $10 million.
What a co-inkydink. Orwell said it best: “All animals are equal, but some animals are more equal than others.”
So, what does this have to do with anything? VOTE WISELY, do not believe the hype — first woman president or other obfuscations…….. It will be YOU living with the consequences not the new granny , her elderly friends and surrogates nor their families —- just YOU.