Life in the South American country of Venezuela is not good. Last summer, on July 30, 2017, Venezuelans voted in a new legislature called the Constituent Assembly. Its 545 representatives replaced the former National Assembly, controlled by those opposed to the government of President Nicolás Maduro.
The new political organization is expected to rewrite the 1999 constitution which, among other things, lengthened presidential term limits and permits indefinite re-elections. Opposition supporters say the new ruling body will erode democracy even further, and have been staging violent public protests against this legalized tyranny.
In the past three months, at least 75 people have died in the civil unrest.
Venezuela’s National Assembly has not brought home a very good report card. Inflation spiked 454 percent after three months of the new law-making system. Reuters reported earlier this month:
“The country is undergoing a major crisis, with millions of people suffering from food shortages, hyperinflation and a currency that weakens significantly every day.”
In fact, as of the fall of 2017, the Venezuelan bolivar has lost over 99 percent of its value over the US dollar since Maduro took office in 2013.
Venezuela experienced an unbelievable 6,147 percent inflationary rate in the 12 months from February 2017 to 2018. Prices rose a staggering 80 percent in February alone.
The National Assembly indicated that the country entered a state of hyperinflation – when the prices of goods and services rise more than 50 percent a month – at the end of 2017.
Ironically, oil-rich Venezuela has seen production outputs drop dramatically since 2011. Reuters points out that the OPEC member nation has been purchasing foreign crude oil to supply its political allies “such as Cuba with oil on friendly credit terms and in exchange for goods and services instead of the cash it desperately needs.”
Maduro has been trading his country’s imported (read: expensive) crude at a loss in order to secure political alliances. Reuters quoted the insider opinion of an unidentified “former top Venezuelan government official:”
“Maduro is giving away everything he can because these countries’ backing, especially from Cuba, is all the political support he has left.”
– RESIDENTS ARE RATIONING TOOTHPASTE because one-third of them earn the minimum wage. At that pay scale, a tube of toothpaste costs half a week’s wages.
Maduro raised the national minimum wage on July 1, 2017 by 20 percent. But, with inflation increasing by thousand-folds, the new minimum wage is about $33 per month, “enough for only about six pounds of milk powder or five cartons of eggs.”
Venezuela is experiencing food and medicine shortages. People stand in line for hours to buy staples. The poverty level has risen from 48 percent to 82 percent since 2014.
Can you imagine life without beef, chicken, salad, fruit, coffee – or chocolate??
– PARENTS ARE ABANDONING THEIR CHILDREN AT ORPHANAGES because they can’t feed their children. There are waiting lists for facilities to take children wanted by their families, but many applicants are turned away due to space limitations.
– KELLOGG (the US cereal company) CLOSED IT OPERATIONS and this week, on May 15, 2018, as 300 workers found out when they came to work only to find a “We’re Closed” notice. The company issued this statement of explanation:
“The current economic and social deterioration in the country has now prompted the company to discontinue operations.”
Claiming victory for statism and its citizenry, the Venezuelan government immediately seized control of the manufactury.
Kellogg is only one in a tide of large multinational corporations that have left the political misery and economic volatility of Venezuela behind. Other mega-companies that have already closed up shop include “Bridgestone, Clorox, Coca-Cola, Colgate, Kimberly-Clark, General Mills, General Motors and Harvest Natural Resources.”
– Despite investment bond rates as high as 12.75% (as compared to a typical US bond paying 2.5% interest), VENEZUELA’S CREDITORS MAY EXERCISE THEIR CONTRACTUAL OPTION TO ACCELERATE THEIR LOANS if they tire of waiting for their predictably late payments. In this scenario, “they have the right to seize Venezuelan oil that’s in the United States or on tankers in the ocean as collateral.”
If the countries Venezuela owes money to force their repayments by taking the little oil the beleaguered country now produces, total economic collapse could be the consequence.
Certainly, now we can all understand why Venezuelans are fleeing their country if and when possible. The nation’s youth, polled recently, want out. They are tired of doing without, especially when they see safer, richer countries relatively close to home – in geographic miles, that is.
The gulf between the life of an average Venezuelan and a typical American is as vast as it is underestimated. Expect to hear more bad news from this poor, little country with a big, bad dictator.