Saturday, January 23, 2016

Dear Venezuela: I really, really wish I knew how to quit you

Venezuela was the first country that I visited after coming to America.  It has been a long association with that country, which has been nothing but a poster-child for oil as a resource curse.  With the price of oil in a free fall of sorts, I was sure the news about Venezuela would not be pretty; after all, "Venezuela needs oil prices to hit $111 a barrel just to break even" and oil is trading at less than $30!

The Wall Street Journal opens its report with this:
The plunge in the price of oil is causing more investors to bet that Venezuela will default on its $120 billion pile of foreign debt, an event that would trigger a messy battle over the country’s oil shipments and deepen its economic and political crisis.
When pretty much all the oil-export revenue will go to serving the debt obligations, it leaves little for anything else:
The government owes more than $50 billion to private companies that service its economy, ranging from oil contractors and airlines to supermarkets that need dollars to import everything from flour to toilet paper. Major airlines have halted flights to the country and auto manufacturers and others have shut plants after the government was unable to pay for imports of needed parts and materials.
Oil prices are not projected to go up anytime soon.  So, more misery for the people in Venezuela.
Venezuela’s consumer inflation, already the world’s highest, will more than double this year to a level above all estimates from economists surveyed by Bloomberg, the International Monetary Fund said.
Inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner.
720 percent?
Venezuela’s economy will shrink 8 percent this year following a 10 percent contraction last year, according to the IMF. 

When economic conditions worsen, then what happens to stuff that people need?  Remember this post from last April about the shortage of toilet-paper thanks to the screwed up "socialism" of Hugo Chavez and his anointed successor?

The situation has worsened, to say the least, since last April.
It’s also having a serious impact on the sex lives and health of many Venezuelans.
How so, you ask?
Contraceptives, including birth control pills and condoms, are also on the growing list of hard-to-get items. Only one-tenth of the normal volume of contraceptives used by Venezuelans was available last year, El Pais reported earlier this month, citing the head of the country's pharmaceutical federation. 
No milk. No toilet paper. No contraceptives.  Hmmm, can it get any worse?
Experts have been warning of the potentially devastating consequences of the contraceptive shortage in a country that already has one of the highest rates of HIV infection and teenage pregnancy in the region. ...Venezuela's economic crisis could turn into a health disaster.
Oh my!  Add to this the Zika virus too.

How awful!

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