Every day seems to bring a new story of suffering and dysfunction from inside Venezuela, whose people are enduring one of the worst economic and political breakdowns in recent memory.Just today the Wall Street Journal reported anti-government protests rocking the country would likely be larger but for the fact that significant numbers of Venezuelans are simply too hungry to join in. Nevertheless, the demonstrations against President Nicolás Maduro’s increasingly authoritarian government have already resulted in seven deaths, the New York Times reports. And U.S. automaker General Motors said Thursday that its factory in the country had been confiscated by the government — the latest episode in a wave of nationalizations of industry that has helped drive foreign investors from the country.
Venezuela’s historic economic collapse shows no signs of slowing. The International Monetary Fund this week projected that the country’s economy will be the worst-performing in the world in 2017, shrinking by 7.4 percent and even underperforming other ugly economies such as Equatorial Guinea, South Sudan, and Iraq.
Keep in mind that Venezuela was also the worst-performing economy in the world last year, when the country’s gross domestic product collapsed by 18 percent amid a currency collapse and a surge of hyperinflation. The IMF estimates that the country’s inflation rate in 2017 will average around 43,000 percent.
Books have been and will be written about the scope of the mismanagement and corruption that brought Venezuela to this crisis point — particularly tragic since it’s one of the richest countries on earth, with literally the largest oil reserves on the planet.But Venezuela’s reliance on its oil wealth has been both a blessing and a curse, as the economy has tended to follow a boom-and-bust cycle based on the price of oil. Populist strongman Hugo Chavez — who died in 2013 — capitalized on soaring oil prices after being elected in 1998 to finance a broad expansion of Marxist-inspired social welfare spending that was popular in the fragmented and unequal country. But the collapse in oil prices in 2014 crushed the country’s revenues, exposed widespread corruption, set off a currency collapse, and forced deep cutbacks in programs many Venezuelans rely on.