August 13, 2018

BECAUSE SOCIALISM. NEXT QUESTION? Venezuela has dirt-cheap fuel, so why is driving nearly impossible?

Under the late Hugo Chávez, who ushered in Venezuela’s socialist revolution in 1999, a new constitution and numerous elections placed nearly all government institutions under the control of the ruling Socialist party.

This concentration of power was aided by a feuding opposition which carried out ineffectual campaigns and electoral boycotts. After Chávez died of cancer in 2013, he was succeeded by Nicolás Maduro who is even less tolerant of dissent.

Growing political authoritarianism has coincided with greater state dominance over the economy. But expropriations, price controls and mismanagement have led to a 40% contraction of the economy in the past five years.

Oil accounts for 96% of Venezuela’s export income but many foreign companies have been driven out and production has dropped to a 30-year low.

The resulting fiscal crisis has prompted the government to print more money, which has led to hyperinflation and a collapse of the currency.

It also means that the government can’t import enough food and medicine to meet demand.

Maduro has rejected economic reforms out of loyalty to socialism and because many government officials are allegedly getting rich off the economic distortions – through exchange rate scams and by selling scarce food on the black market.

Hand it to The Guardian’s Joe Parkin Daniels and Mariana Zúñiga for some refreshingly straight reporting.

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