It's more than that: it's the government doing anti-market things such as forcing stores to sell products below cost, then lamenting that shortages are happening. That government has no concept of basic economics. Central planning has never worked -- ever. They need to read more Adam Smith and less Karl Marx.
That may be true, but many other countries are weathering the storm of falling oil prices just fine. Venezuela simply doesn't have enough of a free or business friendly economy to allow them to diversify enough. If Maduro came out today and said "all price controls are off, all taxes are cut in half, all business regulations are on hold for 1 year", things would rebound very quickly. It would take awhile to generate food but once that trains starts, to the extent that the government and crime don't interfere with it their people will have no problem finding food.
> Venezuela simply doesn't have enough of a free or business friendly economy to allow them to diversify enough. If Maduro came out today and said "all price controls are off, all taxes are cut in half, all business regulations are on hold for 1 year", things would rebound very quickly.
This is not Venezuela's problem. The problem is that Maduro is trying to control capital flight by fixing the exchange rate. The currency is not free floating and when companies want to buy goods overseas, they have to go to the government and ask permission to exchange their Bolivars to Dollars. This causes two problems, the government is really slow to approve the conversion of Bolivars to Dollars and the exchange rate does not reflect the real world value of Bolivars. Every time someone exchanges Bolivars to Dollars, the government loses a lot of money. The government does not want this to happen so they are not approving a lot of outbound capital. The import business has ground to a halt because of this.
It's not that easy. Venezuela was blocked from access to the financial market by an US-american Hedgefond together with a private court in the aftermatch of the 2008 crash. Add to that the failing oil price. While Venezuela strived to be a socialist country before, part of what happened later was pure necessity.
I really haven't read anything about that. In fact, Venezuela has been issuing debt bonds without any blocks. Are you sure you are talking about Venezuela?
Oh. That's embarrassing, I think I mixed it up with the situation in Argentina. Venezuela did have problems to access the financial market and it does explain some recent anti-capitalist measures, but that was not directly related to an earlier hedge fond ruling as I was convinced, it was a more simple case of not paying because of having too much debt. It it related to the argentinian situation, but not the same. Source: https://www.weforum.org/agenda/2016/10/restructuring-venezue...
I wonder whether there was an earlier situation like that for Venezuela that got resolved beforehand, which would explain why I remember differently, but I found no source for that. Maybe the ISDS rulings against it. I'd delete the comment above if I could.
> Venezuela was blocked from access to the financial market by an US-american Hedgefond together with a private court in the aftermatch of the 2008 crash.
