Venezuela’s ravaged economy

The demolition of the Venezuelan economy has entered a phase that will be difficult to curtail for a government that is focused on adopting inefficient, headline-grabbing measures rather than seriously addressing the deep reforms necessary to prevent Venezuelans’ living standards from declining to the lowest levels in decades.

Ignoring not just the advice of international organizations but also the majority opinion of Venezuelans, Nicolás Maduro insists on a stifling course of economic intervention and refuses to accept that the policies begun 15 years ago by Hugo Chávez have brought the national economy to the brink of the abyss.

The emergency measures recently introduced by the executive, such as ration cards – in which digital prints have replaced traditional cardboard stamps – have not solved the shortage of food and other basic products in some of the country’s main cities.

Oil is the latest part of the economy to suffer the same fate as tourism, fishing and coffee

The government’s price-setting has fueled a flourishing black market that hurts the supply chain even more, encourages smuggling and feeds corruption among the law enforcement bodies in charge of stopping it. And all this is taking place amid a general scenario of progressive degradation that increasingly resembles a self-contained dictatorial regime rather than a vigorous country with a wealth of natural resources.

Speaking of resources, the Caracas government is about to fall into its umpteenth paradox. Venezuela, which not only belongs to the Organization of the Petroleum Exporting Countries (OPEC) but also sits on the world’s largest reserves of oil, will soon be forced to import light crude oil because of collapsing production at the nationalized Petróleos de Venezuela (PdVSA). Oil is the latest part of the economy to suffer the same fate as tourism, fishing and coffee, which once brought in millions of dollars in revenues and are now visibly struggling.

Maduro cannot keep turning his back on the economic implosion and on the social tragedy resulting from policies that have taken the Latin American nation back several decades. The extent of the damage is such that recovery will not be easy; in fact, recovery will be utterly impossible without broad social consensus, including from the opposition.