The Curse of Chávez’s Ghost

In the wake of the abrupt drop in global oil prices, Venezuelans have experienced a shortage of food, paper goods and medicines. The Maduro administration makes no effort on economic reforms and instead blames the United States for its heavy dependence on oil revenues and other economic troubles. “There is still no commitment from the government to hike the cost of gasoline, which is heavily subsidized – to the tune of some $12 billion a year – and spurs cross-border fuel-smuggling, especially with Colombia,” explains María Elena Candia for Foreign Policy. “Venezuelans can fill their gas tanks for only 6 cents a gallon at the official exchange rate, but those who can trade on the black market can get it almost for free.” Venezuela has the world’s largest oil reserves, and the commodity represents 95 percent of its hard-currency reserves. Candia notes that the government purchases basic supplies on credit and continues to rely on “regular currency devaluations, expropriation of private companies, and rampant inflation resulting from unsustainable public spending.” – YaleGlobal