A country with more oil reserves that Saudi Arabia has death-causing shortages of food and medicine. Image courtesy of Adobe Stock.
(Cross-post from my other blog.)
The humanitarian disaster in Venezuela keeps getting worse. Ponder for yourself what form of government created this crisis since no news reports will make the connection.
6/26 – Slate – How Much Worse Can Venezuela Get? / The country’s problems are profound and complex, with no easy answers in sight. – After the New York Times front page article noticed the humanitarian travesty, even Slate has an article by writers who noticed the suffering.
A few indicators of suffering these authors see? Food riots breaking out all over. Caracas is now the most violent city in the world. The government-owned and run oil company is seeing production drop because of neglect. Lack of medical supplies is causing unknown numbers of death. Dozens of political prisoners are in jail.
Article goes into more detail than usual as to the cause of the suffering. Corruption and general mismanagement are the most notable reasons cited.
The current turmoil is painted as conflict between the government and opposition in the legislature with both sides blaming the other as the cause of the problems. Most of the power is in the hands of the government with little likelihood of early resolution.
Article says there are simple economic steps the government could take to ease the economic turmoil. In the meantime, people are learning to adjust to the economic distress.
I guess that means the authors want us to think the problems aren’t all that bad really, with some fixes easily available. And people are adjusting to the inconveniences.
Article says the current president retains 25% support and the current economic and political orientation of the government (i.e. chavista) is popular with 40% of the public.
The human suffering must be really bad if the New York Times and now Slate and the Washington Post are paying attention to the devastation.
Oil production is dropping.
6/14 – The American Interest – Venezuelan Oil Output Plunges – A Wall Street Journal article reports oil production in May dropped 120K bopd and was 2.37M bopd for the month.
The monthly output is 10% under the average for 2015.
The monthly target is 6M bopd with actual at 2.37M bopd and dropping.
6/27 – Bloomberg – Venezuela’s Oil Output Decline Accelerates as Drillers Go Unpaid – Check out the bills that are due:
- $1,200 million – Schlumberger’s receivables from the government
- $765 million – Halliburton’s receivables
That’s a few bucks short of $2 billion the government is stiffing their oil drillers.
Want a good belly laugh?
The government is going to start taking over some of the work that the service providers are stepping back from. The government has created Camimpeg, a drilling company that’s going to pick up the slack.
Yeah, stop laughing. One analyst with a straight face says there will be steeper declines in output because the company won’t have experience enough to maintain production. That is putting it rather mildly.
Analysis from Barclays is guessing a worst-case scenario of 1.7M bopd by end of 2016.
6/28 – Washington Post – Venezuelans are storming supermarkets and attacking trucks as food supplies dwindle – Even the Washington Post is noticing the devastation in Venezuela. Article opens with the story of the delivery of a few thousand pounds of cheese was protected by a squad of soldiers.
Article says there are an unidentified number of daily incidences of stores getting looted. Since the first of the year there are 254 reported looting incidences with 172 in May alone.
As is usual, the only visible cause in the article for this devastation is declining oil prices. There is of course some political turmoil but that’s not the cause. Article does mention about halfway through that the government has expropriated private companies, increased the scope of price controls, and generally taken steps to discourage private production. But the biggest problem is oil prices dropping in the last two years. Obviously we are left to conclude that all those government policies are unrelated to the massive suffering.
Lufthansa, Aeromexico, and another airline have stopped flying into the country because they cannot get paid.
7/12 – Associated Press – Life on the line in Venezuela as economic crisis worsens – Thieves and muggers work the long lines of people waiting to buy goods. One time the thieves shot and killed a man who ran away from a mugging, then looted his pockets as everyone in the line watched. Nobody wanted to lose their place in line.
Article says people are assigned only two days a week they are allowed to shop. People are averaging 35 hours a week standing in line and are allowed to buy only 2 of whatever item happens to be in stock on that day.
People are standing in long lines hoping to get another 5 gallons of water to drink. ATMs are swarmed on Fridays because the daily limit is $8 and the ATMs aren’t restocked on the weekends.
Can someone far smarter than me please explain why the form of government which caused this massive suffering has any shred of moral standing?
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