Venezuela Will Get Worse Before It Gets Better

ForbesSo much for the idea of better angels prevailing withing the ruling Socialist United Party of Venezuela (PSUV). Despite not having enough seats to control congress, President and PSUV strongman Nicolas Maduro pulled the plug on the National Assembly, their legislative body, and turned it into a George Bush-esque Coalition of the Willing: a Constituent Assembly of left wing like minds. Maduro’s “my way or the highway” system of governing has proven to be no match for the opposition parties in the Democratic United Roundtable (MUD) coalition. Months of street protests have stopped. The trickle defection of some in the military has stopped. Hugo Chavez, PSUV’s founder, is God. Washington is, once again, to blame for the crisis in the country according to the Chavistas. And the sun is still shining on Latin America’s hardest left-wing political power.

Venezuela’s GDP will contract again. The bloodletting of cash and the increase in inflation will get worse before it gets better.

Triple digit inflation should further crush the economy. The latest figure from the Venezuelan Industrial Confederation (ConIndustria) shows a 731% increase in the average cost of production in the first quarter. The real economy is showing further declines in capacity for the manufacturing sector with even protected sectors like food production down 20.2% year over year in July, Nomura Securities in New York said on Friday. …



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During the last several decades, the United States has invested billions of dollars in trying to help the governments of Latin America and the Caribbean deliver better lives for their citizens. This has meant helping them increase internal security by combating the illicit growing and trafficking in narcotics and the activities of terrorist groups, as well as helping them to shore up their democratic and free market institutions.

Unfortunately, in recent years, continued progress in these areas has been threatened, not least by the elections of radical populist governments in Venezuela, Bolivia, and Ecuador. These governments have instituted retrograde agendas that include the propagation of class warfare, state domination of the economy, assaults on private property, anti-Americanism, support for such international pariahs as Iran, and lackluster support for regional counter-terrorism and counter-narcotics initiatives.

We are a group of concerned policy experts that fear the results of these destructive agendas for individual freedom, prosperity, and the well-being of the peoples of the region. Our goal is to inform American policymakers and American and international public opinion of the dangers of these radical populist regimes to inter-American security.