“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”—Sir Winston Churchill. These words could apply to Venezuela which is a socialist country that is today sharing its miseries.
Venezuela is one of the most blessed countries. It is endowed with more oil deposits than any other country in the world and the quality of the crude is very good, requiring less refining operations than other countries. Venezuela has eight times the oil reserves of Nigeria, which is beset with myriad problems.
Bureaucracy, oil theft, kidnapping and terrorism are just a few. Yet Nigeria produces more oil than Venezuela today.
It is estimated that Venezuela has about US$14.3 trillion in natural resources, yet it is very poor. Japan, South Korea and Singapore have no natural resources and their soil is very poor, but these countries are very wealthy. Japan is considered an industrial miracle. Apart from being the world’s largest auto manufacturer, Japan also produces electronic devices, computers, petrochemicals, aerospace equipment and pharmaceuticals and is a leading shipbuilder.
Like Japan, South Korea is also an industrial miracle. In the 1970s, it was described by the World Bank as being of “African Standard” which is the code for “broke.” Unfortunately for South Korea, the mineral resources on the Korean peninsula are all in North Korea which is very poor because its leader is busy developing nuclear weapons to destroy everyone else, rather than develop his country.
Today, South Korea is one of the world’s leading industrial giants and one of the Asian tigers producing semi-conductors, automobiles, wireless telecommunications and ship building. It exports US$552 billion of goods annually and is engaged in massive economic expansion programmes.
Venezuela is 1,309 times the size of Singapore, which is about half the size of Berbice. Singapore has no natural resources. It imports water from neighbouring Malaysia. Yet, it has one of the most prosperous and advanced economies in the world. In 2016, its exports were U.S$415 billion while Venezuela could not afford US$5 billion to pay its debts.
Venezuela, Guyana and several countries in Africa and Latin America have an estimated $100 trillion in resources compared to the U.S. with $45 trillion, yet these countries are poor because they have not benefited much from their natural endowments.
Despite being a resource rich country, Venezuela is in a political and economic crisis that has led to shortages of basic goods and soaring inflation of 1,500 percent. Its currency is worthless. It cost 3,000 bolivars to buy US$1. Food shortages are everywhere and many are starving because they do not have money to purchase foodstuffs, which have risen 8,000 percent in the last year.
In addition, there are frequent water and power shortages, and hospitals, schools have collapsed, heaping pain on Venezuelans, especially children. It seems that Venezuela is heading back to the 19th century.
Its economic implosion has forced the Maduro government to use bitcoin and other cryptocurrencies to pay its creditors. The government has told Venezuelans to use the coins to pay taxes and public services. But with the minimum wage hovering around $3 a month, the citizens are unable to buy the coins in large amounts.
Driven by hunger and hardship, Venezuelans are forced to eat rabbit as a cheaper source of meat and they are fleeing by the thousands to Brazil, onward to neighbouring Spanish-speaking countries of Argentina and Chile. Between 2015 and 2017, nearly one million adult Venezuelans and three million children have fled their country.
Despite Venezuela’s problems and President Maduro’s unpopularity, he is expected to win re-election scheduled for May 20th, given that he has barred the opposition‘s most popular leaders from participating in the election.
During the campaign, Maduro has blamed the economic crisis on the United States and the opposition. However, Maduro seems to be running out of options, because the Trump administration might impose more sanctions on Venezuela if the elections are rigged.
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