Through the Venezue­lan look­ing glass

Financial Mirror (Cyprus) - - FRONT PAGE -

When we hear of a catas­tro­phe that has be­fallen a friend, we feel both em­pa­thy and a sense of ver­tigo. We won­der whether it could hap­pen to us: Is this catas­tro­phe the re­sult of some pe­cu­liar char­ac­ter­is­tic that we for­tu­nately do not share? Or are we also vulnerable? If so, can we avoid a sim­i­lar fate?

The same logic ap­plies to coun­tries. On the week­end of July 16-17, Venezue­lans were given the op­por­tu­nity to cross the border into Colom­bia for up to 12 hours. It was an event rem­i­nis­cent of the fall of the Ber­lin Wall. More than 135,000 peo­ple used this respite to go to Colom­bia to buy ba­sic ne­ces­si­ties. They trav­elled hun­dreds of miles and con­verted their cash for just 1% of the for­eign ex­change they would have re­ceived had they been al­lowed to ex­change it at the of­fi­cial rate ap­pli­ca­ble for food and medicines. And yet they found it worth­while, given the hunger, short­ages, and des­per­a­tion at home.

The in­ter­na­tional press has re­ported the col­lapse of Venezuela’s econ­omy, of its health sys­tem, of per­sonal se­cu­rity, and of con­sti­tu­tional rule and hu­man rights. All of this is hap­pen­ing in the coun­try with the world’s largest oil re­serves, just two years af­ter the end of the long­est oil-price boom in his­tory. Why? Could it hap­pen else­where?

The par­tic­u­lars of any sit­u­a­tion are al­ways, well, par­tic­u­lar, and hence do not travel well. But that can pro­vide us with a false sense of se­cu­rity; prop­erly viewed, Venezuela’s ex­pe­ri­ence holds im­por­tant lessons for other coun­tries.

Venezuela’s cri­sis is not the re­sult of bad luck. On the con­trary, good luck pro­vided the rope with which the coun­try ended up hang­ing it­self. In­stead, the cri­sis is the in­evitable con­se­quence of gov­ern­ment poli­cies.

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