US BAD NEIGBOR POLICY WITH VENEZUELA

USA SHOULD RESIST ANY IDEA OF "PUNISHMENT" AND TURN TO A GOOD NEIGHBOR POLICY INSTEAD

LET'S AVOID FAILED STATES LIKE SYRIA AND IRAK IN OUR HEMISPHERE

We know the Chavez and Maduro governments in Venezuela have made some terrible mistakes.  Perhaps their original intentions were good. Chavez used the income from  his nation's massive crude  oil reserves to lift the peasantry out of a life of despair.  He helped eliminate illiteracy and abject poverty. He subdivided large hand holdings to give peasants livable plots of land, and instituted a universal free health care system.  But these attempts at a beneficent, populist, near-dictator had their unwonted effects.  Cheap gas and food undermined the nation's domestic production of food and manufactured goods and slipped the nation into the trap of over dependence on a single valuable natural resource---their oil.

Cash flowed freely from the sale of Venezuela's crude into government coffers in those days.  In his zeal to remain popular, Cesar Chavez subsidized the costs of many essential food and necessary commodities. Masarepas (the corn flour of the national dish), rice, beans and even gasoline were heavily subsidized to keep prices low.   Gasoline in Venezuela even today  costs only a few cents a gallon...the cheapest in the world!

Furthermore, the almost unrestricted flood of oil "dollars" permitted the nation to open up its markets to the import of food and manufactured products, from abroad.  This had its predictable effect of withering domestic production. Farms went out of production and farmers quit the land.  Why grow rice, beans and corn when the nation's food markets were brimming with cheap imports?  The process of withering domestic production and dependency on imports continued and expanded.  Even to the extent of importing gasoline!  This, because the government did not think it necessary to sustain and support the nation's own oil refineries.  Why expend the effort and expense when one could buy refined petroleum products abroad more cheaply.   Yes, Venezuela--a nation with more oil reserves than Saudi Arabia--does not refine its own crude to gasoline.

 But like all natural resources, prices fluctuate. Even high demand crude petroleum can hit the skids.   The world economic collapse of 2007-8, and OPEC's decision to maintain its high rate of pumping in the face of an oil glut and lower world prices, as well as the US technological revolution in extraction of hard-to-access oil reserves (by "fracking") caused oil prices to plummet..  Prices of crude collapsed.

Venezuela's crude costs only  $19-20 dollars a barrel (bbl) to extract. But when oil prices dropped from  $100/bbl to $24/bbl, massive income from oil evaporated.   Income from the only source of foreign exchange collapsed and so did the totally oil-dependent Venezuelan economy.  Venezuela had become a happy nation with plenty of food medicines and goods to one in which water does not run in faucets, electricity is spotty and citizens were forced to line up at garbage dumps behind restaurants and bakeries to scrounge for waste food.

Toilet paper, medicines and comestibles are all in short supply.  Inflation is rampant.  When supples are available in the market, one must pack up blocks of bolivars the size of a brick to buy a loaf of bread or a bag of flour.  That nation is now hovering on the cliff-edge of total collapse in a chaotic state. The Bolivar which is now pegged officially at about 9 cents has undergone an 800% rate of inflation and it halves in value every 46 days.


Recently President trump has imposed sanctions on Venezuela's president and some of his associates.  The US has been less than a good neighbor to this nation.  We have made no efforts to help or to ease the suffering there.  We have happily underscored the differences in our political and economic systems and the haplessness of the situation but have made no positive contribution of help.   This bloviating may make us feel superior, but does alter the dire situation for our southern neighbor at all. Some claim we have even conspired to destabilize the socialist Maduro regime. Socialism does not have many advocates here. Let's hope this is not true and that we have learned from our mistakes in the Middle East.  A failed state --like Iraq, Afghanistan, Yemen, Syria in our own neighborhood will be very difficult for us to bear.

What should our policy be?  We have heard so many __"I told you sos" and and proud statements of comparison of "capitalism versus socialism".  These do not change the facts for the Venezuelans who are suffering.

Do we want another Libya, Iraq, or Yemen in our own hemisphere?  Think of the ugly  surges of refugees, of bodies washing up on our shores, of terror and terrorist cells.

The Trump government should hold off on any idea of "punishment " which negatively impacts  the innocent citizenry of this nation and begin to consider policies which can reverse the slide of this nation into a failed state.

We have heard enough of how much better our system is....now is the time to be a good neighbor and extend our hand to help.