There are opportunists on both sides. The main mistake the government made was having an economy that was too heavily dependent on a single industry. After oil prices dropped rapidly it was almost certain you'd see economic turmoil. There's no economic theory that would've saved a country that was too dependent on a single source of income.
> The main mistake the government made was having an economy that was too heavily dependent on a single industry.
That doesn't hold that much water. Nigeria and Russia are both dependent on petroleum dollars as well, and neither of them are convulsing the way Venezuela is. They're not doing well, but they're not running out of food either.
Huge problems are the policies of state price controls and confiscation of means of production, as well as (until now) the refusal to even acknowledge inflation as symptom of economic mismanagement, rather than external economic warfare.
The state price control board (SUNDEE) just went through and slashed prices for all consumer goods by 30% in retail stores for Christmas. That is not the way to control inflation.
>"That doesn't hold that much water. Nigeria and Russia are both dependent on petroleum dollars as well, and neither of them are convulsing the way Venezuela is. They're not doing well, but they're not running out of food either."
To some extent I agree with you. I accept that the Venezuelan government has mismanaged their economy, and the idea that they can keep using wildly different exchange rates for the same currency seems baffling to me. However, regarding the impact of oil revenues...
"As of 2014, Nigeria's petroleum industry contributes about 14% to its economy. Therefore, though the petroleum sector is important, it remains in fact a small part of the country's overall diversified economy."
>"As of 2012 the oil-and-gas sector accounted for 16% of [Russia's] GDP, 52% of federal budget revenues and over 70% of total exports."
...based on those numbers it seems fair to say that the economy of Venezuela is more dependent on oil revenues than Nigeria or Russia, so even without economic mismanagement they would've probably been hit harder by the price drop.
> based on those numbers it seems fair to say that the economy of Venezuela is more dependent on oil revenues than Nigeria or Russia, so even without economic mismanagement they would've probably been hit harder by the price drop.
Sort of a chicken and egg problem. It's only through economic mismanagement (price controls, subsidies on imported goods, subsidies on utilities and commodities, government takeovers of property) that Venezuela is more dependent on oil revenues than Nigeria or Russia.
