The economics and politics of Venezuela

Screen Shot 2015-02-25 at 22.14.00Few countries, writes Dalrymple, are so impervious to experience as Venezuela, which has the world’s largest proved oil reserves (source: US Energy Information Administration, 2013 ranking).
This gift of God has been turned into a curse; for whenever the price of oil goes up, the government distributes largesse by means of subsidy to the populace (though not, of course, without considerable defalcation or malversation on its own part).
Screen Shot 2015-02-25 at 22.16.52Whenever the price of oil goes down,
the subsidies have to be withdrawn, either by means of price rises or general shortage. Either method results in discontent, conflict and a political crisis; and then scapegoats have to be found by whoever is in power. The Venezuelan pendulum swings between hubris and paranoia.
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