Rizal Philippines
April 30, 2017
It seems like a flash since April Fools Day.
We may not be aware of it but Venezuela is experiencing great political (social) and economic turmoil.
From Forbes - worsening crisis in Venezuela
From CNN
and few working days )
Economic:
1. Inflation is at 1,600% . It is predicted to be half this year but at 2,000% in 2018.
2. Food and medicine is at short supply, There is even lack of electricity, despite the fact that it sits on top on one of the richest oil deposit in the world. Most of the food is imported.
3. Unemployment is at massive 25%
4. The govt has taken over multinational companies who shuttered down their operations and pulled out of the country.
This is attributed to: socialist policies of predecessor of Pres. Maduro. (Chavez) The only solution is hike wages, and food stamps for people, and resort to rationing.Change of currency, devaluation, more borrowings will mean the country being nearer collapse, (exacerbate the matters)
Oil was nationalized by the govt (it took ownership of oil production facilities from private owners) and accounts for 95% of country/s export and 25% of the GDP. But oil price has taken a beating because of too much inventory, and cracks at OPEC. (Even Saudi has made massive borrowings to make up for shortfall in national budget) and focused its growth target on non oil business
It was concluded by experts that the country is unlikely to make its debt payments this year and will need massive intervention from the IMF.
Political:
1. Pres Maduro has effectively removed democracy and congress which is largely controlled by the opposition. He is effectively a dictator.
2. Maduro enjoys the support of allies and the military. The military quells the civil unrest and enjoys better economic privilege than the rest of the country (where people can hardly have two meals a day
The crime rate in Venezuela is the second in the whole world (91.8/100,000). Caracas enjoys the distinction where there is the most number of murders (over 130/100,000 - compare that with Mexicos death in drug wars of only 17/100,000) Why is there such a high crime rate? Because of extreme poverty.
Riots and protests are frequent happenings. And a humanitarian crisis is brewing.
Some learning:
1. Democracy is still wanted by most people;
2. Dictatorship can lead to trouble;
3. Socialist policies (supporters of CTP, frequent salary increase, more benefits) can be counter productive to the society. The free Damayan houses at Pandi is a bad precedent.
4. Sound economic, fiscal policies are better than sitting on resources like oil, etc and precious metals
5. Poverty does lead to high crime rate, not war on drugs.
