Venezuela currency crumbles

Great failures of socialism can be seen today in the collapse of Venezuela. The latest example is the national currency, the bolivar, sinking faster and faster under an intensifying political and economic crisis that has left citizens destitute and increasingly desperate. People are starving. 

Its depreciation accelerated this week, after a disputed vote electing an all-powerful communist styled "Constituent Assembly" filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.

Click here and here and here and here for previous Tulsa Today stories.  While we are a "hyper-local" news service strongly objecting to globalization - all economies make an impact locally and savage dictators are a concern to all free people.

An AFP story appearing on France24.com reports that on Thursday alone, the bolivar slumped nearly 15 percent on the black market, to be worth 17,000 to one US dollar.

In a year, the currency has lost 94 percent, a dizzying decline by any standard, but largely ignored by the government, which uses an official rate fixed weekly that is currently 2,870 Bolivars to one Dollar.  AFP reports further:

Ordinary Venezuelans, however, refer only to the black market rate they have access to, which they call the "dolar negro," or "black dollar."

Protesters between events. Photo: AFP by SANCHEZ

"Every time the black dollar goes up, you're poorer," resignedly said Juan Zabala, an executive in a reinsurance business in Caracas.

His salary is 800,000 bolivares per month. On Thursday, that was worth $47 at the parallel rate. A year ago, it was $200.

The inexorable dive of the money was one of the most-discussed signs of the "uncertainty" created by the appointment of the Constituent Assembly.

Venezuelans who are able are hoarding dollars.

"People are protecting the little they have left," an economics expert, Asdrubal Oliveros of the Ecoanalitica firm, told AFP.  Click here for more from France24.com.

Venezuelan shortages - photo: www.ecuadortimes.net

The Christian Science Monitor crafted an excellent commentary July 19 on Venezuela's crisis and collapse from civilization titled "Why the ground shifts under Venezuela's regime".  The Monitor wrote:

A defining moment in a democratic revolution often comes when a nation’s poor, who mostly focus on daily material needs, join others in demanding basic rights and uncorrupted governance. A fruit vendor in Tunisia, for example, sparked a revolution in 2011 after taking a public stand for equality of law. In recent months, as Venezuela nears a breaking point in a political crisis, its poor have begun to join the peaceful efforts of others in seeking an end to the Maduro regime’s grab for indefinite power.

This widening support among Venezuelans to restore democracy, reflected in months of protests and a large voter turnout for an unofficial July 16 referendum by the opposition, has forced other countries to seek a resolution as the crisis slides toward chaos.

Photo: Sky News

The Trump administration, for example, promises stiff sanctions if President Nicolás Maduro goes ahead with a pre-rigged vote on July 30 to rewrite the Constitution and move Venezuela closer toward Cuba-style authoritarian rule. The United States, says President Trump, “will not stand by as Venezuela crumbles.” The Obama administration first imposed sanctions in 2015.

So far, however, outside powers have yet to influence the regime. The main action remains the steady loss of legitimacy of Mr. Maduro among the poor. His economic mismanagement has led to mass shortages despite the country’s vast oil reserves. Polls show 69 percent of citizens do not want him to stay in power. Nearly the same percentage oppose his attempt to alter the Constitution.

Opposition supporters clash with riot police

The opposition controls the National Assembly but its powers have been side-lined by Maduro by various maneuvers. Now, with widening dissent among the poor, the opposition has set up a parallel government and plans to name new judges for the Supreme Court. It has also called for a 24-hour strike by businesses on July 19. In addition, the government is heading toward a showdown with foreign creditors with a $3.5 billion payment on the national debt due in October.

The crisis in Venezuela is the largest in Latin America in decades,but it is one that is now ripe in showing how much the region has embraced democratic principles. As is often the case, democratic progress can be led by poor or rich alike.

Click here for more of this editorial from www.csmonitor.com.