Venezuela: A perfect storm of disaster that shouldn't have happened

Share |

June 18, 2016

Keen observers saw it coming. Intelligence projected it would happen and others were in denial. It doesn't matter now. The odds are perhaps the perfect storm of disaster was allowed to happen for copious reasons.

Beyond the conceived theories, I think it boils down to gross economic mismanagement, squandering approximately a trillion dollars and quite a lot more in mineral resources. Inadequate oversight and measures to mess with the market (price-fixing/price control distortion), a worthless currency and runaway inflation made matters worse.

In search of a scapegoat that has overwhelmed President Nicholas Maduro's government officials are accusing Curacao and Aruba for contributing to the shortage of vegetables, fruits and fish, going to great lengths explaining that this contraband is harmful for Venezuela.

Historical perspective
Back on November 5, 2013, I wrote the column Oil for food - a crisis of confidence in reference to the shortages of 53 items that made up Venezuela's basic food basket and the 23,000 distribution centers -- supermarkets, little stores, open air markets that make food and other commodities available to the people of Venezuela.

And I asked the question: But, with Saint Lucia's membership of ALBA, has the government developed a plan for the production and export of goods and services to help out a fellow friend?

"Oil for food! Oil for toilet paper! Oil for soap! Oil for bananas! To add too Simply Beautiful!"

Forced to live with little food, perhaps the need for toilet paper has subsided? But the thought process is the same then as it is now - PetroCaribe is more ideological suicide that it is economically practical.

Almost two and a half years later, the limits of courage and endurance, the sometimes intolerable demands of conscience have taken their toll. In sombre brilliance Maduro traveled to Jamaica and Trinidad and Tobago to affirm deals on energy, trade, security and foreign affairs. On May 23, 2016, Venezuela agreed to buy US$50 million in food from neighboring Trinidad and Tobago.

"Among the priority items Venezuela had requested were butter, chicken, pork, ketchup, rice and black beans. The Trinidad and Tobago government also signed a memorandum of understanding with Maduro to purchase gas from Venezuela, which Maduro said stood to benefit both countries."

On October 21, 2015, I detailed Nicolas Maduro's 'Caribbean engagement' a flamboyant optic in autocracy.

"Addressing the joint session of parliament in Saint Lucia, Maduro referred to "ALBA, PetroCaribe and CELAC as the new architect in the region to move forward and achieve all the successes that we enjoy today... a new integrated and productive economy, to transform these zone in a dynamic zone for investment for commerce.

"Further, Maduro's concept of commitment to advancing the cause for the creation of a PetroCaribe economic zone is heading into the realm of deception that is likely to crash and burn under the weight of Venezuela's economic underpinning in oil revenue that accounts for approximately 96 percent of Venezuela's foreign income, consistently under US$50 a barrel."

Indeed, the noise of the time has silenced the narrative like a broken record. Actually, feelings and intentions coupled with the elegant fiction of power, is unable to supersede reality and economics.

It happened, that on February 15, 2016, I wrote Venezuela's collapse has happened.

"This means, as long as oil prices stay historically low, a power struggle looms and a new round of instability could keep growing. Venezuela has overshot both on the high side and on the low side. It is time to cut the denial and accept; it is time to look to the future."

Avoiding the worst
This can't be - the mind may refuse to believe what is happening, but truly, what happens next depends on President Maduro, perhaps to remember that charity begins at home.

How does one pray to the deity living a sham, feelings and intentions when government owns the means of production and is inept as well as corrupt?

Oil rich Venezuela is struggling with widespread blackouts and shortages. Looting and growing street protests are commonplace in the search for basic necessities of life. And the fear of economic bankruptcy and deterioration of the oil sector has increased exponentially.

Of course it can be put back, but economic and political insurgencies are perhaps right that socialist rule no longer needs to exist.

The desire for freedom and the simultaneous need for political and economic reform is too great to pigeonhole 30 million Venezuelans.

On the basis of that trend, I am not alone in believing that President Maduro's government will fall. It's only a matter of time! This is supported by multiple intelligence and open cracks in his government that can be heard from a distance as pressure is applied.

Up front
President Maduro's government is essentially the problem. The thought of prolonged suffering, more indignation of the country's wealth and the squandering of natural resources are unimaginable. Destiny at this point is seemingly an escape route from the worsening crisis not likely to harbour him to complete his term through to 2018.

The clock is ticking to find a democratic resolution. A coming together of the armed forces, the opposition Democratic Unity and 30 million civilians will have to step forward with a common agenda to free Venezuela from a despot and the exposure to existential threat.

And so, the open smack down from OAS Secretary General Luis Almagro referred to Maduro as a petty dictator, a traitor and a liar, nevertheless surprising and unforeseen in the typical button-up formality to be diplomatic - the sad story is the pain, suffering misery and dying people of Venezuela who thirst for aid and assistance from despotic rule.

Taking control

It is self-evident that the Eastern Caribbean Central Bank (ECCB) is showing proactive leadership and seems preparing for the eventuality of a humanitarian crisis. A run on the reserves of the ECCB is not far-fetched, which means preservation of the EC dollar remains paramount to the region's financial strength.

Indeed, it is incumbent on regional governments to adjust accordingly in the throes of historical upheaval in Venezuela, the Americas and the sub region and the need to look deep and hard to develop a true regional frontier.

So whereas the price of oil will rise, Venezuela's social, political and economic re-configuration is inevitable. Likewise, the Bolivarian Alliance of the Americas (ALBA) and PetroCaribe. History has proven repeatedly that socialism does not work - the Soviet Union, Cuba and now Venezuela are vivid examples.

The argument
If this somehow wasn't understood before, the sub region will once again undergo a political and economic transformation. But most significantly, to avoid repetition of errors the level of political, economic and ideological perspective must be elevated.

Forward discussions on Venezuela are likely to centre on a new and stable democratic government; modern reform and free-market policies; economic diversity to become greater producers; investments in renewable energy; efficiency of existing oil assets; debt restructuring, a reliable currency and adherence to human rights and security.

So really, if not drowned in falsehood and having learned the right lessons, from irresponsible fiscal policy and phony leadership, I believe, better is possible with a sense of urgency to remedy what is happening in Venezuela.

o Melanius Alphonse is a management and development consultant, a long-standing senior correspondent and a contributing columnist to Caribbean News Now. He can be reached at

Click here to read more at The Nassau Guardian

News date : 06/18/2016    Category : Opinion, Nassau Guardian Stories

Share |