reyxe t1_j2db8eq wrote
Reply to comment by qrussman in The Venezuelan opposition on Friday dissolved the "interim government" led by Juan Guaido, once the popular and internationally recognized face of the drive to oust leftist leader Nicolas Maduro by DoremusJessup
Nope, don't lift that shit.
As of right now, Venezuela is having a resurgence period caused by sanctions.
As backwards as it might look like, it's true. Sanctions caused Maduro to make the market "freer" because they can't launder money outside the country so they are forced to use it here.
New businesses have popped up EVERYWHERE. Wages have steadily risen to what felt impossible.
If you lift the sanction, we go down to shit again.
McGuv19 t1_j2en9d6 wrote
Do you think the grey/informal economy is an important part to Venezuela’s recovery? Because I think I saw that in 2022 around 1/5 of Venezuela’s GDP right now comes from black market trade. And actually in the past two years Venezuela’s GDP has actually increased overall I believe which is nice.
For me I think the cause of the economic crisis is a mix between the long term effects of Chavez’s economic policies, but also because of the short term effects of the US embargo.
Chavez’s management of the Venezuelan economy led to an over dependence on oil exports, which was fine while the value of oil remained high; but in the 2008 recession, demand for Venezuelan oil from China fell by a lot, meaning the value fell too, sending the economy into a slowdown. The long term impact of this was that the Venezuelan economy was already slowing down before the US embargo even happened.
One could say that Chavez’s policies had already weakened the Venezuelan economy a lot, but the US embargo was the event that was the trigger for the current catastrophe. After the embargo the Venezuelan economy nearly tanked, and its GDP fell by around a third in only a year. Lifting the US embargo would lead to the best outcome for not only Venezuela, as it would allow oil exports to resume and drive economic growth, but also it would be preferable to the US, since the US needs to replace their Russian oil and gas with something else.
Please correct me if anything I said seems wrong, I have only researched this topic; you have lived it and therefore would have a better understanding of the situation on the ground.
reyxe t1_j2epkb9 wrote
Depends on what you mean by "informal economy". We used to have buhoneros which were people who would throw a blanket on the floor in the middle of the street and sell basically anything, if you mean that kind of thing, nope.
If you mean businesses that let's just say don't pay taxes or work legally then yes. A bunch of people started selling cakes and many othe things.
While sanctions definitely caused our situation to worsen at first, it's been positive for us because the cash injection the country got is absolutely massive. Average wage went from like 5 usd a month to almost 100$. Chávez created a shit country to have a business in, external investment fell sharp and many businesses left because of it. More people unemployed and his stupid idea of throwing money at the poor was our downfall.
Thing is, our worst years were between 2014 and 2016. There's no doubt about that and that coincidentally matches the first years of Maduro's term, sanctions on the country started 2017, so no, sanctions didn't cause our collapse as we had already collapsed for a long time. Lifting the embargo would just take the external investment away. Not like the embargo did anything terrible to us, government doesn't invest on Pdvsa anyway or anything worthwhile so not being able to use our money is better.
qrussman t1_j2ezssa wrote
Another perspective to consider:
"foreign sanctions 'constitute violations of international law' and have exacerbated Venezuela’s economic crisis with 'ineffective and insufficient' carve-outs for humanitarian issues."
"Venezuela’s state-controlled economy began to decline in 2014 with falling oil prices and has been corroded by mismanagement and corruption. By the time the US first imposed broad economic sanctions in 2017, Venezuela already had the highest inflation in the world and was experiencing chronic shortages of basic goods.
However, Douhan’s report emphasizes that existing 'calamities' were exacerbated by 'unilateral sanctions increasingly imposed by the United States, the European Union and other countries.'"
"broad sanctions remain, complicating the country’s access to basic medical and food supplies, despite exemptions for humanitarian needs.
'Impediments to food imports, constituting more than 50 per cent of food consumption, have resulted in the steadily growth of malnourishment in the past 6 years,' Douhan’s report reads, noting that hungry Venezuelans’ “coping mechanisms” include reducing their number of meals per day, selling household assets, and child labor, among other things.
The impact of trade sanctions is particularly felt today in the Venezuelan countryside, where agricultural activities have all but stopped since imports of diesel fuel dried up. Venezuela is still capable of refining limited amounts of normal gasoline but cannot refine diesel, used in heavy trucks and agricultural machinery. Many farmers have been forced to leave their fields unattended as their machinery stood still."
"She also called on the US, the UK and Portugal to release frozen Venezuelan foreign assets – estimated at $6 billion – so that Maduro’s government can purchase supplies needed to confront the Covid-19 pandemic."
"Nevertheless, Douhan described the ultimate economic toll of sanctions on ordinary Venezuelans as unjustifiable, and noted that the US-led 'maximum pressure campaign' also 'violates the principle of sovereign equality of states and constitutes an intervention in the domestic affairs of Venezuela.'"
https://www.cnn.com/2021/02/12/world/us-venezuela-sanctions-alina-douhan-intl/index.html
reyxe t1_j2f3icb wrote
>"broad sanctions remain, complicating the country’s access to basic medical and food supplies, despite exemptions for humanitarian needs.
>
> 'Impediments to food imports, constituting more than 50 per cent of food consumption, have resulted in the steadily growth of malnourishment in the past 6 years,' Douhan’s report reads, noting that hungry Venezuelans’ “coping mechanisms” include reducing their number of meals per day, selling household assets, and child labor, among other things.
Ah Douhan the diplomat from Belarus? Belarus the ally of Russia?
I mean, her report had some pretty obvious bias and how she didn't mention any of the rest of the causes of our collapse. You just know her takes are shit when she says sanctions "don't allow the government to import food and medicines" when that's just not true.
1st off, the government never stopped importing food for their shit food boxes, ever.
2nd, the medicine crisis has existed in this country since early 2010's, blaming it on sanctions is LAUGHABLE.
Also sanctions explicitly say food and medicines are exempt, government doesn't import them though, that's always been the issue since most food was produced by private businesses and not the government itself (since they bankrupted most of the food businesses they took over)
qrussman t1_j2f68jj wrote
Another perspective:
"The report details how U.S. sanctions are affecting the most vulnerable in Venezuela. While U.S. sanctions don’t explicitly restrict food and medicine imports, Venezuela’s economy is heavily dependent on oil revenue as a source of hard currency so that private and public businesses can import needed goods. U.S. sanctions have contributed to a steep drop in Venezuelan imports. The report finds that the value of average monthly public imports dropped by 46 percent (to $500 million) in 2019 and another 50 percent (to $250 million) in 2020."
"A tendency towards risk aversion has led banks and financial institutions operating in Venezuela or with Venezuelan institutions to over-comply with U.S. sanctions. This has had an impact across Venezuelan society. As a result, human rights groups, humanitarian organizations, and private companies have had their bank accounts closed, and seen legitimate transactions denied or frozen for long periods of time."
"WOLA, a research and advocacy organization dedicated to advancing a negotiated political accord that leads to free and fair elections in Venezuela, has repeatedly joined Venezuelan civil society in expressing concern about the impact of U.S. sanctions in the country. On September 1, WOLA joined with 115 Venezuelan organizations and individuals in urging the U.S. government to refrain from widening sanctions to restrict the flow of diesel in the country."
qrussman t1_j2f6wh0 wrote
One more:
"What is worse, sanctions have merely exacerbated the plight of citizens in Venezuela, decreasing the likelihood of mass protests and other civic movements, which can help the country restore democracy."
"A report by Weisbrot and Sachs indicates that the sanctions have contributed to not only destabilizing the economy, but also have made it harder for citizens to reach basic goods such as food and medical supplies due to the reduction in imports (Weisbrot & Sachs, 2019)."
https://www.unaa.org.au/2021/10/01/us-sanctions-in-venezuela/
reyxe t1_j2f7umb wrote
Our economy is dependent on the hard currency that the government limited. This is not sanctions fault, it's all Chávez's.
Since the market was freed and USD is able to be used normally our economy started to resurge. Almost like a freer economy is a better economy lmao
No private company has had their accounts closed if proven they share no connection to the government. I'm an accountant.
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