What Next for Venezuela?
Even before the international community started rallying behind Venezuela's opposition leader, Juan Guaidó, the country's interim president, Nicolás Maduro, was running out of runway. It is now clear that the Chavist regime cannot survive, and that the country will need massive humanitarian and financial support after it falls.
MEXICO CITY – The world has witnessed many sharp economic declines over the years, but Venezuela’s is surely one of the worst to date. The country has experienced a loss of real (inflation-adjusted) GDP greater than that of most war-ravaged countries during World War II, and its inflation rate is expected to reach 10,000,000% this year. At well over 100 times the black-market rate, the official exchange rate depreciates so rapidly that a quote has lost its meaning by the time it is published.
Under these conditions, food – 90% of which must be imported – is so scarce that the average Venezuelan is estimated to have lost 24 pounds (10.9 kilos); and an estimated three million Venezuelans (representing around 10% of the population) have fled. Power outages, water and medicine shortages, and near-famine have been persistent features of President Nicolás Maduro’s brutal and incompetent reign.
Until the 1960s, Venezuela’s per capita GDP was the highest in Latin America, at around 80% that of the United States. Today, it is under 30%, and also well below that of Chile, Brazil, Mexico, and Colombia. For comparison, in 1990, Colombia’s per capita GDP was about half that of Venezuela.
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