> I should also mention that a far less credible explanation is to blame “capitalism”, as some New York Times reporters hilariously tried to do in a recent article:
>>Founded by former President Hugo Chávez, Mr. Maduro’s mentor, the [Venezuelan socialist] movement initially promised to lift millions out of poverty…For a time it did. But in recent years, the socialist model has given way to brutal capitalism, economists say, with a small state-connected minority controlling much of the nation’s wealth.
Holy fuck…
TheRnegade on
Most of the article is behind the paywall. But, from what I’ve read, is that there’s a mix of a ton of different things that all happened one after another.
A good comparison is to compare/contrast between Venezuela and Saudi Arabia. Petrol states that are reliant on a single export. Commodity Dependence or Dutch Disease, where 1 thing is essentially what a country’s economy is based around. When that commodity is in high demand, the state flourish, when it doesn’t, it falters.
Both countries are do have very generous government benefits, paid for by the riches brought in from oil. But you do need to dig for that oil. Saudi Arabia is lucky in that getting to theirs is far easier than the denser lands of Venezuela. But that’s only part of the reason. Saudi Arabia’s Aramco kept up with the latest drilling tech, regularly updating their knowledge with the best western consultants and engineers money could buy. Chavez fired the people who knew the business and filled those positions with cronies. Things worked fine at the start, but when infrastructure started getting old and breaking, those cronies didn’t have the knowledge/care to fix things. They just wanted to get their cut. So things slowly decayed. And when oil prices cratered, Venezuela went belly-up. Iran was likewise hurting as well (this is when they came to the table during the Obama Administration for that Iran Deal).
Saudi Arabia saw what could have happened, had the Saud family been just a bit more lackadaisical with their running of Aramco. So began their pivot to trying to diversify Saudi Arabia’s economy with their [2030 Vision](https://en.wikipedia.org/wiki/Saudi_Vision_2030).
small44 on
The sanctions are surely not one of the factor
Vivid_Pen5549 on
From what I’ve read kinda generally is that Maduro engaged in a policy of Austerity and disguised it as corruption, where instead of just announcing prices would go up and certain jobs and Benefits would be cut, money just never shows up, and if you’re in the civil service your essentially gambling on wether or not you’re going to be payed, remember Maduro earmarked more money in a budget than there was currency in circulation.
4 Comments
> I should also mention that a far less credible explanation is to blame “capitalism”, as some New York Times reporters hilariously tried to do in a recent article:
>>Founded by former President Hugo Chávez, Mr. Maduro’s mentor, the [Venezuelan socialist] movement initially promised to lift millions out of poverty…For a time it did. But in recent years, the socialist model has given way to brutal capitalism, economists say, with a small state-connected minority controlling much of the nation’s wealth.
Holy fuck…
Most of the article is behind the paywall. But, from what I’ve read, is that there’s a mix of a ton of different things that all happened one after another.
A good comparison is to compare/contrast between Venezuela and Saudi Arabia. Petrol states that are reliant on a single export. Commodity Dependence or Dutch Disease, where 1 thing is essentially what a country’s economy is based around. When that commodity is in high demand, the state flourish, when it doesn’t, it falters.
Both countries are do have very generous government benefits, paid for by the riches brought in from oil. But you do need to dig for that oil. Saudi Arabia is lucky in that getting to theirs is far easier than the denser lands of Venezuela. But that’s only part of the reason. Saudi Arabia’s Aramco kept up with the latest drilling tech, regularly updating their knowledge with the best western consultants and engineers money could buy. Chavez fired the people who knew the business and filled those positions with cronies. Things worked fine at the start, but when infrastructure started getting old and breaking, those cronies didn’t have the knowledge/care to fix things. They just wanted to get their cut. So things slowly decayed. And when oil prices cratered, Venezuela went belly-up. Iran was likewise hurting as well (this is when they came to the table during the Obama Administration for that Iran Deal).
Saudi Arabia saw what could have happened, had the Saud family been just a bit more lackadaisical with their running of Aramco. So began their pivot to trying to diversify Saudi Arabia’s economy with their [2030 Vision](https://en.wikipedia.org/wiki/Saudi_Vision_2030).
The sanctions are surely not one of the factor
From what I’ve read kinda generally is that Maduro engaged in a policy of Austerity and disguised it as corruption, where instead of just announcing prices would go up and certain jobs and Benefits would be cut, money just never shows up, and if you’re in the civil service your essentially gambling on wether or not you’re going to be payed, remember Maduro earmarked more money in a budget than there was currency in circulation.