What economic system produces this result? Image courtesy of Adobe Stock.
The political and economic conditions in Venezuela continue to deteriorate.
7/3/17 – Bloomberg – Venezuela’s Poor Rebel, Roiling Maduro’s Socialist Strongholds – The power base for the leaders of the socialist country is poor people.
From previous reading I’ve done, massive subsidies to the poor successfully bought their allegiance. The collapse of services including water outages, random outages of electricity, and empty store shelves are rapidly undermining support from the poor. Protests has spread to many of the poor communities in Caracas. There have been nightly protests in a number of communities for several weeks.
7/5/17 – Wall Street Journal – Maduro Supporters Storm Venezuela’s Congress – Government thugs stormed the national congress and beat a number of opposition representatives with sticks and pipes. Several members were bloodied and one unconscious congressman was taken away in an ambulance.
7/15/17 – Wall Street Journal – In Venezuela, a Latin American Throwback: Political Prisoners – Before democracy spread across much of Latin America in the early 1980s, it was routine for a lot of the political opposition in a country to be thrown in jail. That repression tactic has faded as democracy spread.
Venezuela is back to the dark days, per the article. There were 117 known political prisoners before the protests stepped up in early April. Today, there are 440 known prisoners held for their political activity. There have been around 3,500 detained, the vast majority of whom have been released.
To increase the repression, military tribunals are now trying many of the opposition, with the accused (or framed, if you wish) allowed minimal access to their attorney, who in turn may not find out about a hearing until the last minute, and even then only be allowed a few minutes with the client before the hearing/trial/kangaroo court.
7/27/17 -Rueters – U.S. orders family members of Caracas embassy staff to leave Venezuela – Spouses and children of embassy staff were ordered to evacuate Venezuela.
Staff are allowed to leave if they wish. That’s called a voluntary evacuation.
Conditions continue to fall apart.
Oh, by the way, what economic system produced this mess?
7/29/17 – Wall Street Journal – The Agony of Venezuela / Nicolás Maduro’s bid for an electoral coup is leading to civil war. – Editorial says what had been obvious for a while, specifically that the constitutional referendum is an attempt by the current president to neutralize the remaining competition and take complete control of the country.
Last week the US finally took some actions showing opposition to the coup-in-progress.
Thirteen senior officials had their visas to visit the US revoked and saw their parked assets in the US frozen. (I think that tells us that even senior officials in Venezuela want to have a pile of some just-in-case money stashed away.)
Hints from the US suggest more officials will be sanctioned if the constitution shredding vote moved forward.
7/31/17 – Wall Street Journal – U.S. Freezes Assets of Venezuela’s President – The US Treasury department placed sanctions on the president of Venezuela, freezing any assets he may have stored in the US.
The US continues to drop hints of possible sanctions on Venezuelan oil exports of the government goes through with plans to shred, I mean, rewrite their constitution.
8/2/17 – Wall Street Journal – Venezuelan Default Fears Rise With Billions in Debt Coming Due Soon – Venezuela has $5B of principal and interest payments due by 12/31/17 with only $3B in foreign reserves at the moment. That raises concerns whether they will be able to export enough oil to meet their scheduled payments.
If the US were to impose sanctions on either their exports to the U.S. (which makes up 49% of their exports) or imports of light oil from the U.S. (which are used to get the oil out of the ground and ready for export), it is quite unlikely they will make their payments.
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