Venezuela’s Chernenko

Must-read by Fabio Rafael Fiallo at Real Clear World: Venezuela Imploding Like the Soviet Union

The current situation in Venezuela — under the Chavez-designated heir and proclaimed winner of a tainted election Nicolás Maduro — is similar to, and no less untenable than, that of the Soviet Union at the time of Chernenko.

The misallocation of resources brought about by price and foreign exchange controls, the wasting of oil revenue in the funding of domestic patronage and regional alliances, as well as the paralysis of private investment due to the government’s hostility against the entrepreneurial class, have taken a heavy toll on the Venezuelan economy. Rampant inflation, multiple devaluations and chronic shortages of essential goods form just part of the hardships enjoyed by the Venezuelan population.

Gone are the days when Hugo Chávez boasted about being able to cut oil exports to the “Empire” (i.e. America). More than ever before, the Venezuelan regime badly needs the foreign exchange generated by such exports.

As a matter of fact, oil sales to other countries do not provide as much fresh foreign exchange as do the corresponding exports to the United States. Although at a 30-year low, exports of oil to the U.S. are still 50 percent higher than those to China. Moreover, out of the 640 thousand barrels per day that Venezuela ships to China, 30 percent is destined to pay back the debt contracted by Hugo Chávez with Beijing ($42.5 billion).

True, unlike Chernenko’s USSR, Venezuela doesn’t spend in military adventures outside the country. All the same, the Venezuelan government is squandering the country’s financial resources through other means: It keeps alive the Castro regime and provides oil to friendly governments in the region.

Furthermore, the purchase of heavy weaponry by Hugo Chávez has had adverse economic repercussions akin to the damaging effect of the Cold War arms race on the Soviet economy.

What would really make a difference is a quartet: a Venezuelan Lech Wałęsa, a Colombian Margaret Thatcher, an American Ronald Reagan, and a Karol Wojtyła in the Vatican.

We can only dream.

And now, for some humor (in Spanish),

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