For the past few years, Venezuela has been sliding toward the abyss. Now, with the South American nation teetering on the brink of a full-scale rebellion against President Nicolas Maduro, it’s worth examining how the socialist policies of Maduro and his predecessor Hugo Chavez led Venezuela to the edge of national collapse.
Here are the 10 leading indicators that socialism has failed in Venezuela.
10) Prices have skyrocketed.
Hyperinflation has led to a spike in consumer prices on some items between 14,000 percent and 19,000 percent in four years. In February, President Maduro raised fuel prices by more than 6,000 percent to try to cover Venezuela’s next debt payment.
9) The economy is getting smaller.
Despite having the biggest proven oil reserves in the world, Venezuela’s economy contracted by 5.7 percent in 2015 and is expected to contract by an additional 8 percent this year. Government-imposed price controls take away the incentive for domestic manufacturers to make and sell anything besides oil. Therefore, Venezuela imports almost everything.
8) Venezuela is buying oil from the United States.
Venezuela has long been one of the world’s leading oil exporters. However, the government has come to rely too heavily on the industry, as oil accounts for half of the Venezuelan government’s revenues. Falling global oil prices have dramatically slashed oil revenues, and the economy has not been nimble enough to make up for the losses elsewhere. Venezuela’s state oil company is struggling to pay its debts and has stopped providing its workers with new boots, gloves and helmets. The company pays its workers so little they can barely afford to eat.
So the government has been forced to turn to the hated United States for help. Earlier this year, the U.S. began shipping more than 50,000 barrels a day of light crude to Venezuela.
7) Dirt-cheap electricity prices have led to power shortages.
Power shortages have been a recurring problem in Venezuela over the past 17 years of socialist rule. Lately the regime has taken drastic measures to conserve electricity. Earlier this year, Maduro granted the entire country an extra three days off from work at Easter. Then he proclaimed every Friday in April and May a holiday for public employees to cut power usage in federal office buildings. In February, the government ordered hundreds of shopping malls to go without electricity from 1 to 3 p.m. and 7 to 9 p.m. He also encouraged women to stop using hairdryers. In May the regime shifted the country’s time zone forward 30 minutes to reduce electricity usage in the evenings.
As William Murray, author of “Utopian Road to Hell: Enslaving America and the World with Central Planning,” has noted, the Venezuelan government fixed the official price of electricity at 3 cents per kilowatt hour, whereas it costs about 10 cents per kilowatt hour in the United States. And while the official rate is 3 cents, Murray said most Venezuelans pay only about half a cent for it. The problem is that electricity cannot be delivered for half a cent, so the artificially low price leads to demand that is greater than supply.
6) The government has introduced forced labor in the fields.
To combat severe food shortages, Maduro signed a decree in July giving his labor ministry the power to require any public or private sector worker with “enough physical capabilities and technical know-how” to work in the country’s fields for either 60 or 120 days.
5) Food, medicine and common household items such as toilet paper are in short supply.
Some Venezuelans have spent 12 hours waiting in line outside the supermarket for food, only to find they were not able to buy what they wanted. Hungry crowds have shouted, “We want to buy stuff!” When a BBC journalist tried to film the long lines, Venezuelan soldiers forced him to delete his footage.
Meanwhile, a lack of clean water has led to a rise in stomach illnesses and skin problems around the country, but doctors do not have the medicines they need to treat all their patients.
Maduro responded to the shortages not by adopting free market reforms, but by putting the military in charge of distribution. The Great Mission of Sovereign Supplying, as the initiative was called, also tasked the military with oversight of the nation’s ports to monitor donations of food and medical supplies from overseas.
4) The country is too broke to pay for its own money.
The Maduro regime managed to turn inflation into hyperinflation. Venezuela had a 63 percent inflation rate in 2014, at which time the regime more than doubled the supply of paper bolivars. Inflation promptly skyrocketed to 275 percent and was expected to surge to 720 percent by the end of this year. It’s the highest inflation rate in the world.
The Venezuelan central bank’s own printing presses didn’t have enough security paper or metal to print more than a small portion of the money the government ordered, so they flew in dozens of cargo planes full of bolivars printed abroad. However, Venezuela did not have enough U.S. dollars with which to pay the printing companies for all the new bolivars, leading to an awkward situation in which Venezuela couldn’t pay for its own money.
3) People are eating garbage to survive.
It’s the sad reality of life in a country with a floundering economy and a severe food shortage. A recent study found a stunning 15 percent of Venezuelans say they can feed themselves only with “food waste discarded by commercial establishments.” The same study found almost half of Venezuelans had been forced to take time off work to search for food, while more than half had gone to bed hungry. Three-fourths said they were unable to eat breakfast, lunch and dinner every day.
2) People are eating dogs, cats and pigeons.
Desperate times call for desperate measures. Mobs of hungry Venezuelans have looted grocery stores, stealing the food they desperately crave. Some have even resorted to hunting animals such as dogs, cats and pigeons to avoid starvation.
1) Venezuelans are eating each other.
Venezuelan prisoners, anyway. Earlier this month, Juan Carlos Herrera told local media his 25-year-old son and two other prisoners were seized by 40 people, stabbed, hanged to bleed, butchered and fed to other detainees.
The gruesome scene occurred during a month-long mutiny that began when prisoners protested overcrowded conditions in the Tachira Detention Center. There have been roughly 200 prison riots in Venezuela this year alone, with rising poverty and chronic food shortages putting prisoners on edge.