While many ideologues blame “socialism” for the country’s economic ills, most economists point to a set of policy errors that
have little or nothing to do with socialism. Most devastating has been the dysfunctional exchange rate system, which has led to a worsening “inflation-depreciation” spiral over the past four years, and now hyperinflation. Free gasoline and price controls that didn’t work also contributed to the crisis. The Trump administration’s financial sanctions—more than all previous destabilization efforts, which were significant—have made it nearly impossible for the government to get out of the mess without outside help.
As if this profoundly distressing situation weren’t enough, media outlets have frequently published exaggerated accounts of the conditions in Venezuela, depicting widespread starvation, for instance. To be sure, soaring food prices have contributed to increased undernourishment throughout the country, but this is a far cry from
a large scale famine.
More importantly, there has been scant U.S. media reporting on the further economic damage provoked by the Trump administration’s financial sanctions, announced in late August last year (shortly after Trump’s statement about a “military option” for Venezuela).
As my colleague
Mark Weisbrot has explained, Trump’s unilateral and illegal financial embargo – which cuts Venezuela off from most financial markets – has had two major consequences, both of which entail increased economic hardship for the Venezuelan people. First, it causes even greater shortages of essential goods, including food and medicine. Second, it makes economic recovery nearly impossible, since the government cannot borrow or restructure its foreign debt, and in some cases even carry out normal import transactions, including for medicines.
The United States’ Hand in Undermining Democracy in Venezuela
