Bad leadership has destroyed Venezuela but one wonders who benefits from the policy of economic sanctions practiced by the US and other countries, which are hurting the common people even more?
The Empire Files’ Abby Martin says that Venezuela’s humanitarian crisis has been manufactured by the local elite colluding with the US. Until recently, Martin was on the payroll of the Venezuelan government’s satellite TV network, teleSUR but her show’s budget was cut, due to the impact of US economic sanctions. She joins Lee Camp to tell the “Bolivarian Revolution’s” side of the story. I am running this video not because I agree with her but because I don’t. This is not to say that everything she says is false. I think it’s important to listen to all sides of a story.
Given the long history of US meddling in all of of Latin America and the likely involvement of the CIA in the 2002 failed coup against Hugo Chávez, it’s not out of the realm of possibility that what’s occurring in Venezuela is a massive asset-stripping event and a scramble by powerful interests to control the world’s largest underground oil reserves through economic warfare.
Venezuela’s recession is the largest in the history of the Western Hemisphere, almost twice as large as the US’ Great Depression, with inflation hitting 61,000% as of last week and the economy shrinking by more than 30% over the previous 2 years.
How did Latin America’s richest country go bust?
Pressed by a subscriber, I spent all day researching the past 17 years of Venezuela’s history to answer that question and if there was ever a case where the truth of a situation depends on who’s telling it, this is it.
While it can be agreed that the current chaos is being exploited and that the opposition party might be sabotaging the ruling Socialist regime in every way possible (if what Abby Martin says is true, and who could blame them, after their businesses had been stolen and nationalized by the ruling party and commerce has been incapacitated by reams of bureaucratic red tape), nobody can say that the string of bad decisions that have culminated in this chaos weren’t made by Hugo Chávez and Nicolás Maduro. Attempts to assign blame elsewhere are just not true.
Hugo Chávez was a charismatic Robin Hood-type figure who seized the opportunity caused by high oil prices in the mid aughts and early teens to embark on a disorganized program to redistribute the wealth of Venezuela, taking on billions of dollars of foreign debt to finance many social programs.
The vast income from increased petroleum revenues was totally mismanaged, with no “rainy day” funds set aside. While other oil-producing nations, like Kazakhstan, took advantage of this market boom to create robust financial buffers for themselves, Chávez spent all of the money, like it was going out of style.
Venezuela’s economy had been wracked by an oil glut in the mid-1990s. Rather than creating incentives to diversify the economy so that it could be more resilient to oil busts, Chávez nationalized the major industries and infrastructure and he ballooned the government bureaucracy with redundant agencies, which were expensive and unproductive. He also did nothing to stem corruption.
Because oil prices were very high for a decade, it was easy for Venezuela to pay their bills – and for Chávez to look like a hero. Everything seemed to be working – if you can call stealing people’s businesses “working” – but as soon as oil prices went back down, the non-diversified economy, now further crippled by being nationalized began to falter, the imports became unaffordable and the foreign debts became unpayable. And then Chávez got cancer.
Chávez’ hand-picked successor, Nicolás Maduro has ruled by decree since shortly after his contested election in 2013. In May of 2017, Venezuela’s opposition-majority congress was dissolved with legislative powers assigned to a supreme court staffed by judges controlled by Maduro. The Organization of American States (OAS) called this a “self-coup”. Abby Martin might tell you that it was necessary to dissolve congress because it was totally obstructionist but there is absolutely no way to justify his dissolution of the legislative branch of government! Sorry, Abby!
Venezuela’s non-compliance with its own constitution led to the final nail in its coffin: US economic sanctions, starting in July 2017, followed by similar sanctions from Canada and Panama. With Venezuela’s ability to finance debt restricted to only 30 days, this has destroyed its financial system. Venezuela has mainly been servicing its $150 billion debt with $21 billion in gold reserves, which are expected to be gone by early 2018. Earlier hopes of opposition leaders, of restructuring their debts through the IMF, in a deal similar to that of Greece have gone out the window with the sanctions.
The hyperinflation, combined with the inability to create credit has led to a humanitarian crisis, with over 2 million people fleeing the country so far and an ecological crisis caused by oil wells that are not being maintained and leaking masses of toxic crude into South America’s largest lake, Maracaibo.
Is it right and is it fair for powerful governments to add to the affliction of millions of innocent people? No. This is war. How will a people who have on average lost 24lbs (11kg) over the past year from lack of food ever turn this situation around?