36608
Venezuela’s Vicissitudes
World Economy

Venezuela’s Vicissitudes

Sorcery is alive and well in Venezuela, once the richest country in South America, now an economic disaster. Hand over $100 and–hey presto!–you get a wad of notes the size of two house bricks: 100,000 bolivars.
But that’s an all-too-simple trick on the black market. Shopping for chicken, rice, toothpaste, soap, flour and toilet rolls has been turned into a vanishing act. The government’s fixed prices for staples are at such low values shops lose money if they sell them–so they don’t, BBC reported.
Pop-up queues appear when rumors swirl that a supermarket might have a batch of staples at the fixed price. That people in the country with the biggest oil reserves in the world queue for food is black magic indeed.
Four soldiers in flamboyant uniforms–black shakos, red feathers, gold brocade–guard the shaman responsible. Hugo Chavez lies in his tomb, a hero to his supporters, to his enemies the founder of a political cult. The mausoleum smacks of a shrine to a god suffering, like his country, from devaluation.
Alive, Chavez - “El Comandante” - at least had charisma. The sorcerer’s apprentice, President Nicolas Maduro, used to drive a bus. The bad news for Chavismo–the movement or cult Chavez created–is that wheels on the Maduro bus are falling off.
Under Maduro the bolivar is currently suffering from inflation of 141%, according to the government’s own figures. The IMF predicts it will hit 720% later this year.
One number is that the country is $120 billion in the red, with oil revenue–responsible for nine-tenths of the state’s export revenue–collapsing. Without the oil money, the country can’t feed itself.

 Default
There are $10 billion in debt payments due later this year and Venezuela can’t borrow easily because the international market suspects it will default. Investors are already spooked because it has expropriated billions of dollars worth of foreign-owned companies.
Governing party MP Ramon Lobo told Newsnight: “The economic war has become even more vicious. It’s an attack on the real economy. The oligarchs who still dominate food production are looking for a way to hang us by cutting production on purpose.”
Murder numbers are notoriously dodgy in South America, but Caracas, by some estimates, suffered nearly 4,000 murders last year, making it one of the most dangerous cities in the world.
Petrol here is the cheapest in the world–an absurdity that Maduro dare not address lest he trigger riots, like the “Caracazo” chaos in 1989 in which hundreds died.
Financial meltdown, political stalemate: it might not come to it but some people fear this could lead to violence and even a military coup.

Short URL : http://goo.gl/haqNwi
  1. http://goo.gl/QFIOYd
  • http://goo.gl/MGcfXh
  • http://goo.gl/Lo30YJ
  • http://goo.gl/6Z2UWZ
  • http://goo.gl/JVvAO7

You can also read ...

China Challenges US Solar Panel Duties
China says it is challenging a US tariff hike on solar panels...
In a retaliatory move, President Recep Tayyip Erdogan’s government on Wednesday announced higher tariffs on some US imports, namely on passenger cars (120%) and leaf tobacco (60%).
Turkey has raised tariffs on some US imports, including...
File picture of Kim Jong-un (L) and Moon Jae-in at the truce village  of Panmunjom, South Korea.
South Korea President Moon Jae-in on Wednesday offered a bold...
World trade volume growth peaked in January at almost 5.7% year-on-year but nearly halved to less than 3% by May.
Cyclical indicators point to slower and more uneven growth in...
Nigeria CPI Drops to 11.14 Percent
Nigeria’s National Bureau of Statistics says the consumer...
Surging Inflation Mars Philippines Growth
The Philippine economy in 2018 is a story that can be summed...
Moody’s Predicts Slower Fiscal Progress in S. Africa
South Africa’s fiscal consolidation will be slower than the...
Transport tickets and fuel have driven up costs for consumers.
Inflation in the UK climbed in the month of the July, as had...

Trending

Googleplus