In the upscale Itler district of Besiktas, on the European side of Istanbul, Turkey, the "Nusret" meat restaurant, owned by the famous Turkish chef "Nusret Gökçe", is used to the presence of celebrities from politics, art and sports from all over the world to enjoy eating expensive beef steaks From the hands of the famous chef, however, on the evening of one of the last days of October, the restaurant received an unusual guest who was expected to be the Nusrat restaurant, which would be the last place he could go in light of the circumstances that his country was going through.
On his accounts on the social networking sites Instagram and Twitter, where he is followed by millions of people, "Nusrat" posted three videos before deleting them shortly after publication, showing Venezuelan President Nicolás Maduro and his wife Celia Flores having dinner while enjoying themselves while the chef The Turkish famous for cutting steaks in front of them, and after eating dinner, "Maduro" started smoking a luxurious Cuban cigar from a box emblazoned with his name, and he is trying to wear a shirt as a gift with the image of "Nusrat" while making his famous salt movement (1) .
Maduro was on his way back from China when he passed through Turkey, and it seemed as if the Turkish luxury tours were a regular thing for the Venezuelan president and his wife, who had previously visited the filming site of the series "Ertugrul Resurrection" in Istanbul, and expressed his pride and pride in watching The famous Turkish series (2).
At the same time, thousands of kilometers to the east in the north of the South American continent, where Maduro has been ruling for five years, there have been events of another kind that are taking place more quickly, as the famine that has struck the country for years is claiming the lives of dozens of Venezuelans non-stop(3). It is a famine, some of whose statistics indicate that nearly two-thirds of the population of Venezuela have lost about 11.8 kilograms of their weight as a general average in the past year 2017 due to food shortages and economic collapse, or what the population calls the "Maduro diet" in a sarcastic reference to the Venezuelan president< sup>(4), who many Venezuelans see likes to watch Turkish soap operas while turning their backs on the real hunger games on their country's soil.
On the edge of the knifeGoing back to the era before Lieutenant Colonel Hugo Chavez attempted with a group of leftist officers to carry out a failed coup in 1992, after which they were imprisoned, and then ran in the presidential elections that brought him to power in 1999 as a populist hero, it is difficult to believe that Venezuela at that time It exists now. In the 1980s and earlier, Venezuela was the richest country in all of South America, with the highest rates of economic growth and a gross domestic product that surpassed economies such as Spain, Greece and Israel, the lowest levels of inequality, and one of the most stable democracies in the Americas(5) Nearly most of Venezuela's population had access to clean drinking water, sanitation and electricity(6), but since then it has become like a country it hit A civil war, where social and financial ruin perches on the pillars of the country, which is home to about 32 million people.
The Venezuelan economy has been in free fall since Maduro came to power in 2013 after Chavez's death. Per capita productivity is close to half, meaning that it is actually worse than the economy of Syria, while the Venezuelan economy is classified as one of the few economies that witnessed the most violent cases of inflation or high prices in history, which is a short list that includes the inflation that occurred in Germany in 1923, and in Zimbabwe in the late 1920s. in 2000, and then Venezuela in 2018.
Last July, the eyes of observers of global economic affairs in general, and Venezuelan ones in particular, were probably hanging in great amazement at the International Monetary Fund report, which periodically predicts economic growth and inflation rates in Latin American countries during the current year 2018 (7), as it is expected that inflation in Venezuela during the second half will reach one million percent, and this very large number of inflation rates means that the prices of goods and services have increased by a million times over the past year, If, for example, a Venezuelan buys a pen at the price of one bolivar (Venezuela's currency), then based on the rate of inflation, the price of the pen has become one million bolivars.
This significant acceleration in price levels prompted many merchants to refuse to deal in the Venezuelan currency because its value is eroding very quickly, and the rich Venezuelans converted what they owned bolivars into other alternatives such as bitcoin, and the prices of menus in restaurants change almost daily, while the price of the dollar sold On the black market, it reached 3.5 million bolivars(8), and at this point, Venezuela appears cynical and fragile, as if duct tape envelops it, waiting for collapse at any moment.
In addition to inflation, Venezuelans suffer from what we can call "political tyranny", as we find that "Maduro" has been leading, since assuming power, a major security crackdown that led to protests and the killing of dozens, and it was announced that he won the vote this year for a second term that extends Until 2025, amid the failure of this to be accepted by Venezuelans at home before the international community abroad, and the lack of food and medicine and the continuous cuts in electricity and water forced hundreds of thousands of Venezuelans to flee the country to neighboring countries such as Colombia and Ecuador, prompting those countries to declare a state emergencies, while most of the Venezuelans staying turn to earning money illegally, as the rates of violence and crime have risen sharply, in 2014 the murder rate - only reported - was equivalent to the rate of civilian casualties in Iraq in 2004 after the US invasion, so Venezuela ranks second The highest murder rate in the world right now, and perhaps, with what is to come, it will move to the fore soon.
The Roots of FragmentationIt is impossible to separate the current situation in Venezuela without addressing the roots of this economic fragmentation, and the fact that its golden status was based on the huge oil reserves that financed most of its wealth, until the decade of the eighties came when politicians pushed the fears of running out of oil to the limit Unfortunately, this reduction was accompanied by an oil glut in the global markets, which led to a sharp drop in oil prices from $120 a barrel, after accounting for the inflation rate in 1980, to $24 a barrel in 1986(9), and the combination of low oil production and low prices led to the Venezuelan economy finding itself in a state of severe bleeding, until the country's gross domestic product decreased between 1980 and 1990 by 46%(10).
With Chavez assuming power, he worked to radically change the country's economic policies. While socialism was dying in the countries of the world, and the global economy was witnessing a new era of trade openness and strengthening economic and financial relations, the historic Venezuelan president insisted on taking a different pattern and path to achieve Economic development in his country, in addition to exporting a propaganda image of a socialist hero fighting US imperialism in the South American continent and third world countries.
In 2002, in the midst of an economic recession, public anger against Chavez's policies rose, ending in protests that threatened his presidency, so he ordered the army to restore order, but instead a group of army officers arrested him personally and announced his forced resignation and installed a new leader, but that The military coup saw the light for only two days, when Chavez was able to return to the presidential palace in Caracas, announcing the failure of the coup and taking additional measures to tighten his grip on power.
The next blow to the Venezuelan economy came shortly after the coup from its pearl and the envy of all South American countries, so to speak, the state oil company "Petróleos de Venezuela", known as PDVSA< /b>" It is the largest oil company in Venezuela, when the workers held a strike in it, and Chavez always denounced the company because of its association with business elites and the United States. In a country that considers oil its lifeblood, the strike carried with it the destruction of the economy and thus the authority of Chavez himself, so the latter dismissed 18,000 workers from PDVSA, most of them technicians and skilled managers, and replaced them with 100,000 of his supporters(11)< /sup> Unsurprisingly, the inevitable outcome when allegiance was given over efficiency: Oil production plummeted, falling by 25% from then until death ousted Chavez from power in 2013.
The Curse of Resources"Venezuela's dependence on oil will make it a destitute country... Twenty years from now we will see, oil will bring us ruin, it is the devil's excrement."
(Juan Alfonso, former Venezuelan oil minister, made a statement in the 1970s during the Venezuelan oil boom*)
Chavez was not satisfied with what he did in the oil company PDVSA, but rather approved an economic policy that was a major cause of almost killing the Venezuelan economy, as it shifted Venezuela from dependence on oil to total dependence on it, which is more accurately explained by the former Venezuelan Minister of Privatization, Gerfer Torres. ", noting that in 1998 oil accounted for 77% of Venezuela's exports, but by 2011 it accounted for 96% of exports(12), which means that 4 Only 1% of the goods Venezuela exports are non-oil products, unlike its Latin neighbors who have long relied on exporting a single commodity but have since diversified.
The decline in oil production and the economy's dependence on it exclusively with Chavez's socialism constituted a magic mixture to push the country's economy from the top of the hill down as quickly as possible, as the Chavez regime worked on the practice of nationalization on a large scale, and the confiscation of many companies that are difficult to count due to their abundance in various sectors , including aluminum, cement, gold, iron and steel companies, agricultural companies and others in the sectors of transportation, electricity, food production, banking, paper and the media, so the number of private companies in the industrial sector alone decreased from 14 thousand companies in 1998 to only 9 thousand in 2011, which reduced The country's ability to produce anything but oil.
When the global financial crisis occurred in 2008, and investors decided to resort to more stable markets away from the major economies in which the waves of the crisis collided; Their destination was the developing and emerging economies, including the countries of Latin America, as they displaced about 150 billion dollars towards those countries in 2011, money that Brazil devoured a little less than half, and Venezuela's neighbors also received their share, such as Colombia, by about 13 billion dollars, while the appetite of the Venezuelan economy did not move. Only for five billion dollars. Not only did the matter stop with the flight and reluctance of foreign investments, but local companies also began to exit to avoid expropriation and for fear of the cloudy Venezuelan economic future, while those who remained suffered from high crime rates, as we mentioned.
It is not possible to talk about Venezuela reaching these high levels of crime without referring to the bloody alliance that Chavez established after the coup against him with the organized crime groups known as "Collectivos" (Colectivos) to help him control the streets in front of The demonstrators, which are gangs that were roaming the streets on Chinese motorcycles, dispersed the demonstrators in brutal ways, and Chavez was lavishing them with oil money, and giving them guarantees of legal consequences, so that they could infiltrate the state and become politically influential within the system, until they became a challenge to the Venezuelan police, which is what It became clear in 2005 when they managed to expel the police from an area in Caracas, the capital, that had tens of thousands of residents.
In any case, Chavez's fourteen-year period was certainly not pure economic evil, as there were some years that witnessed strong economic growth and a decrease in the poverty rate, noting that they were the same periods in which the economies of Latin America fully flourished, as the rest witnessed The continent's economies are more prosperous than Venezuela, but those glimpses of prosperity ended at the hands of Chavez's disciple and deputy, "Maduro", who took power after him in 2013, to take the country to a point where Venezuela passed the stage of anxiety from economic collapse to actual collapse.
The Maduro eraBecause he theoretically graduated from Chavez's school, Maduro tried to repeat the rules of the game that his predecessor used to follow, but he failed greatly because of two factors that provided Chavez without him(13), The first was Chavez's populist figure. He was widely known and represented a kind of political wizard with extraordinary abilities to persuade people of all different backgrounds to join his cause, even if he was a failure in it. Growing up as a poor child in the Venezuelan countryside was enough to give him The ability to communicate smoothly with the poor and the working class from which he came, so he gathered a coalition of leftists, military officers, large segments of the middle class, and Venezuela's long-neglected poor, a combination that enabled him to remain in power for about a decade and a half despite the great economic downturn.
As for the second matter, it was related to the unprecedented oil boom. Despite the decline in oil production in Venezuela due to the process of replacing skilled workers with less knowledgeable associates, oil prices were largely allies of Chavez. The president's historic system has about a trillion dollars pumped into the state treasury.
In contrast to the above, Maduro never enjoyed the Chavista charisma, so to speak, in addition to the collapse of oil prices at the end of 2014, that is, one year after the first came to power, which led to the collapse of the Venezuelan economy as a result. Although prices recovered relatively later, reaching around $80 a barrel recently, Maduro - and his amazing mismanagement - made Venezuela's vast oil wealth, which exceeds that of Saudi Arabia and the United States itself, rendered it unable to give the country the necessary lifeline. To revive it, because the Venezuelan oil industry suffers from mismanagement, lack of investment, cash flow problems, dilapidated infrastructure(14), lack of overall maintenance, weak refining capacity, flight of technical personnel to the Colombian capital Bogotá or Miami-Dade County, Florida, USA(15).
Therefore, it was not surprising that the US Energy Information Administration(EIA) expects oil production in Venezuela to drop to only 1 million barrels per day in Our current year, then to 700,000 barrels by December 2019, while Venezuela was producing at the time of "Maduro" about 2.8 million barrels per day(16), and in In an economy where oil represented 96% of its exports, dollar flows were so weak that the government was unable to pay the costs of basic imports such as food and medicine(17).
Instead of carrying out real reforms, such as trying to diversify his country's economy and investing in local production, or even taking care of and developing the Venezuelan economy, "Defsa", Maduro has resorted to one of the worst economic solutions ever, and instead of addressing the lack of oil revenues, he has Another, easier source of funds, he went to, was to print them heavily and with no real cash cover, while the simple dollar revenues, coming from the meager production, were allotted to him; To spend on the political, military and judicial departments that ensure his survival in power, and his luxurious lifestyle, leaving the local currency to the people flooding the markets, until that runaway inflation appeared.
The hyperinflation (hyperinflation) is a major economic catastrophe, as it is very rapid and out of control inflation, and it occurs when price increases are so large that the concept of inflation is unable to describe the realistic state of any economy, which pushes consumers to The need for carts full of money to buy daily necessities, for example.
This type of inflation is also considered a disaster because it means, in one way or another, the death of the affected currency, as when the value of a country's currency drops sharply; Citizens lose confidence in them and view them as having little value, and therefore people start hoarding and storing goods and commodities that have value, thinking that there is an upcoming increase in their prices, and with the rise in prices, basic commodities such as food and medicine become scarce, which leads to price increases many times in upward spiral.
As a result, the government is forced to print more money in an attempt to stabilize prices and provide liquidity, which further exacerbates the problem(18), which is what is happening in Venezuela , as the bolivar printing machines are working at full capacity, and Maduro continues to spend and historical devaluation of the currency, until toilet paper is actually more valuable than bolivar notes, to the extent that some Venezuelans make handbags from the collapsed currency notes and sell them on the Colombian border. (19).
Cartel of the SunsMaduro's rule does not only result in inflation, but rather his regime represents an answer to what can happen to a country when a "cartel" drug trade takes over the management of its economic and financial affairs, as it empowered the army during his reign, an institution that was less influential in Under Chavez, it was able to control the drug trade, food and gold mining, and of course it did not miss the national oil company.
Last May, Washington officially accused "Maduro" and "Diosdado Cabello," the second official in the ruling party, of profiting from the shipment of illegal drugs, which was the first time that Washington linked Maduro to the drug trade, and the Treasury said The US said in its statement that Capello seized quantities of drugs from small dealers and collected and exported them through an airport owned by the Venezuelan government, and the proceeds from these shipments were divided between Capello, President Maduro and others, and the Treasury imposed sanctions on all of them, including Cabello's wife who heads the National Tourism in the country(20).
In Latin America, criminal businessmen carry out their work from within "organizations" that usually specialize in smuggling and exporting drugs, but the situation is slightly different in Venezuela, as the drug cartel is managed from within the government, according to the "Insight Crime" institution concerned with criminal investigations
b>(21), drug smugglers sought to infiltrate the state, facilitate their work, and place state resources at their disposal if necessary. Corrupt government actors turn a blind eye to drug trafficking in exchange for rewards that may not be enough for them, so they are forced to move on.
The drug-trafficking elements of the Venezuelan system are called the Cartel of the Suns after the gold stars worn by generals in the Venezuelan National Guard. Over the past three years, Insight Crime has built up dossiers of current and former senior Venezuelan officials involved in cocaine trafficking, employees who, rather than sidelining them at the very least, have been promoted by Maduro to the highest positions, such as Tarek El Aassimi, likely to be One of the most important participants in this profitability network, and he has held the portfolio of the Ministry of Industries and National Production since last June, and he was a deputy to Maduro before that, and when Maduro's nephews were arrested in the United States on charges of conspiracy to bring 800 kilos of cocaine; At that time, they admitted that the quantity belonged to the El-Aysami network(22).
A few days ago, the United States imposed new sanctions on Venezuela's gold exports, and prohibited American citizens from dealing with personalities and institutions involved in "corrupt or fraudulent" gold sales from Venezuela, as the Americans put it, sanctions that sent Venezuela to the Bank of England It requests the return of its gold reserves amounting to about 15 tons, valued at $550 million, which it had previously kept in the bank's vaults(23), and a few hours ago Europe extended sanctions against Venezuela for a full year. Sanctions that include a ban on arms sales and equipment used in internal government repression, along with an extension of the travel ban and asset freeze of 18 Venezuelan officials for "violating human rights and undermining democracy and the rule of law," as the text said(24) .
failureAmong those lessons, ignoring which may lead to catastrophic events; Is that external economic factors can cause an internal economic collapse, the sharp drop in oil prices in late 2014 led to an acceleration of the economic collapse in Venezuela, and the economic failure can be hidden behind unbiased statistics and through the media of the ruling regime, as happened during the era of Chavez when some of the factors that contributed to the economic collapse were presented as advantages. When he came to power, he promised people that his socialist policies would bring them out of poverty, stimulate consumer spending, and "lead to heaven." The media exported that image to people despite the collapse of the Soviet Union years ago. Few at the time, and the failure of many countries that pursued socialist policies.
However, governments and regimes do not go as soon as the economy of their countries most likely collapses. Despite the current Venezuelan failure under Maduro, he is still marketing that what is happening is just an external conspiracy by the United States and Colombia in cooperation with businessmen at home who monopolize commodities and speculation. On the Bolivar, and that the next is better.
In general, it is not possible to say for sure about the end of the match between the current Venezuelan regime and the West, despite the vast differences in power, and despite the undoubted weakness of the Venezuelan economy. However, the match between the Venezuelan people and its ruling regime has turned since Maduro took over in one direction. For Venezuelans directly, in a country that is on its way to joining the club of extremely poor countries whose recovery needs a major miracle that does not seem to come soon in any case.
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margins:
*– The devil's excrement: Is oil wealth a blessing or a curse?