Venezuela Campaign: Aid helps, but fundamental reform is needed

Venezuela Campaign: Aid helps, but fundamental reform is needed

by Joshua Curzon
article from Wednesday 27, February, 2019

WHILE MOST of the West sits around paralysed, debating whether to give any credence to Maduro’s claims that Venezuela does not need aid, people are dying. In Caracas’ only functioning children’s hospital, children are dying every day because the dialysis machines are not working. Other children are dying of malnutrition or are being permanently stunted. Due to a lack of medication, cancer and AIDS patients cannot receive the treatment required to keep them alive.

While aid is desperately needed, it is by no means a long-term or even medium-term solution. Aid is a sticking plaster, and it is wholly inadequate to treat Venezuela’s gaping and festering wounds. A vast quantity of aid is required to feed starving Venezuelans and prop up Venezuela’s collapsed healthcare system. It would be impossible to provide such a large volume of aid for years or even months, even if the Maduro dictatorship was prepared to let it into the country smoothly and not interfere with its distribution. Hospitals and other institutions would require reforms that the dictatorship does not wish to permit.

Venezuela’s humanitarian disaster is wholly man-made: there has been no hurricane, earthquake, flood, drought, or war. The lack of food, medicine, healthcare, and other necessities is solely attributable to the failed socio-economic policies of the Chavista regime.  

Venezuela was once the richest country in Latin America. It had a thriving agricultural sector, it was a founding member of OPEC, and it was entirely capable of feeding itself through domestic production supplemented by imports. That status quo was destroyed by the policies of the Chavez and Maduro regimes. The economy outside the oil sector has largely ceased to function. Agricultural production has shrunk catastrophically. The once proud oil sector is in a state of collapse, with production levels near those of the 1940s and rapidly declining. Four policies have been most destructive:

  1. Price controls made it uneconomical to produce goods and services. Prices were arbitrarily set by the regime, with no consideration to the actual costs of production. These controls have forced thousands of companies out of business and crippled most of the remaining ones.

  2. Nationalisation has eroded any sense of business security. By confiscating private property at political whim, nationalisation has discouraged any investment in the Venezuelan economy and promoted short-termism in Venezuelan businesses.

  3. Political cronyism and mismanagement went hand-in-hand with nationalisation. State-owned and nationalised companies were put under the control of party loyalists and military officers with no commercial understanding other than a desire to line their own pockets. This ensured that any nationalised businesses were run into the ground.

  4. Currency controls compromised Venezuelan’s ability to import vital goods and supplies. Restricting access to foreign currency and fixing the rate enabled the regime and its cronies to make a fortune. But it also undermined the entire Venezuelan economy. The suffering is particularly acute in the healthcare sector, which cannot import advanced medicines such as those for cancer and AIDS.

A serious long-term solution to Venezuela’s crisis will begin with a reversal of these four policies. Once price controls are lifted, farmers will resume production and businesses will once more be able to function. Once currency controls and nationalisation are abandoned and judges once again uphold the law impartially, investment will flow again. Aid is needed to alleviate the worst of the existing problems, but only fundamental political, economic, and social change will restore Venezuela to health.

More information on the Venezuela Campaign can be found on their website

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