Venezuela is Suffering from the Ultimate Case of 'Dutch Disease'

The headline at ZeroHedge back in January said it all. “This is what the death of a nation looks like." It now seems inevitable that Venezuela, for decades touted as a “socialist paradise,” will disintegrate by the end of the year. It’s the ultimate case of “Dutch disease,” a country now rotten from depending far too much on the export of a primary product and, as a result, facing a currency so bloated it can’t maintain productivity and competitiveness. Now the inevitable violence and chaos is starting to spill over. On Sunday, the Financial Times cited reports of the morgue in the capital city of Caracas overwhelmed with the stench of dead bodies piling up.

There’s been no official homicide data from Venezuela since 2006, but El Nacional is claiming “5186” murders in 2016 to date. One local think tank puts the rate at 92 killings per 100,000 citizens — about 22,000 Australians a year in local terms, or 84 murders every weekend in Sydney. It’s almost fives times the rate in the year before Hugo Chavez came to power. US journalist Jeff Berwick recently, bravely, stepped out for a night or two in downtown Caracas. He claims he virtually had the streets to himself. No one else was silly enough to venture outside at night.

Berwick, a US citizen, doesn’t miss the chance to turn the situation into a gun debate. But in Caracas, he may have a point. “No guns” notices are present in every public space, every restaurant. The security guard at his hotel was hiding behind the door when they knocked, because he’s not allowed to carry a weapon. The FT spoke to local man Luis Mejía, who said three members of his family had been shot in the past fortnight. “This is now wilder than the wild west,” he said, adding the morgue attendant who a decade ago received seven or eight bodies every weekend is now faced with 40 and 50. Seventeen years ago Chavez brought his socialist revolution to Venezuela. Now, barely two years after his death, lynchings, prison breakouts, deadly student protests, and mafia executions dominate the pages of national newspapers.


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