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Reply #125


Response to Ken Burch (Reply #123)

Wed Apr 17, 2013, 06:58 PM

125. I could care less who "governs" Venezuela, but this was really close based on pre-election polling.

Of course, Maduro may wish Capriles had been declared the winner, considering the economic tsunami about to engulf the country.
Apparently, oil revenues are dropping precipitously, and guess who's gonna take the fall when the money runs out?


An Economic Crisis of Historic Proportions

Moisés Naím, a scholar at the Carnegie Endowment for International Peace, is a syndicated columnist and author......

......explained that unless the government supplies more dollars to pay for imports, shortages -- from food to medicine -- would be inevitable. "What we will give Fedecámaras is not more dollars but more headaches," replied acting president Nicolas Maduro, the heir apparent to the Chavista regime (and Hugo Chávez's vice president).

Maduro is correct. Crushing headaches will soon be inevitable across the country, including within the private sector but especially among the poor. President Chávez has bequeathed the nation an economic crisis of historic proportions. Venezuela is consuming more than it is producing. This is due to enormous government spending, mounting foreign debt and the mismanagement of its oil industry.

The crisis includes a fiscal deficit approaching 20 percent of the economy (in the cliff-panicking United States it is 7 percent), a black market where a U.S. dollar costs four times more than the government-determined exchange rate, one of the world's highest inflation rates, a swollen number of public sector jobs, debt 10 times larger than it was in 2003, a fragile banking system and the free fall of the state-controlled oil industry, the country's main source of revenue.

Oil-exporting countries rarely face hard currency shortages, but the Chávez regime may be the exception. Mismanagement and lack of investment have decreased oil production. Meanwhile oil revenue is compromised partly because of Chávez’s decision to supply Venezuelans with the country's most valuable resource at heavily subsidized prices. Thus a large and growing share of locally produced oil is sold domestically at the lowest prices in the world (in Venezuela it costs 25 cents to fill the tank of a mid-sized car).

http://www.nytimes.com/roomfordebate/2013/01/03/venezuela-post-chavez/chavez-will-leave-behind-an-economic-crisis


What Chavez did for the poor is to be admired, but there should have been a way to do that without demonizing & chasing away the scholars, the medical professionals, and the high tech talent. What you're left with is a poor and un/under-educated class, totally dependent upon the government for its existence. We're about to see what happens when the good times end, and I have a feeling Venezuelans know this, and it's the reason this election was razor thin.

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LineLineLineLineLineLineReply I could care less who "governs" Venezuela, but this was really close based on pre-election polling.
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