In Venezuela, Nicolas
Maduro’s government, in power since 2013, has pursued an external strategy in
which the structural shortage of dollars is managed through a system of
multiple exchange rates, one that is as complex as it is ineffective, while
giving preference to bilateral sources of financing (China, Russia) in a vain
attempt to curtail the haemorrhaging of central bank reserves. Domestically,
year after year, the government has become increasingly financially dependent
on PDVSA, the national oil company, and has used and abused devaluation in
another vain attempt to balance its accounts. This has triggered a totally
uncontrollable inflationary spiral and a widespread shortage of goods,
including basic necessities. Lastly, PDVSA’s financial troubles have resulted
in production cutbacks due to a lack of investment. More…
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