How Socialism Destroyed the Venezuelan Economy

Venezuela’s economy has been brought to its knees not by sanctions, but by Chavism. This has been characterised by the confiscation of people’s assets, large-scale corruption, and the destruction of the value of money.

In the following, we publish Daniel Lacalle’s writing, which appeared on his website: 

“It is shameful that members of the Grupo de Puebla are “observing” the Venezuelan elections, the results of which authoritarian leader Nicolas Maduro wants to manipulate. Grupo de Puebla is an organization that defends all communist and murderous dictatorships. If human rights are violated or freedom of speech is restricted in any socialist regime, it is frowned upon.

It is very difficult to compare Venezuela’s economic disaster caused by 21st century socialism to any other country

Jose Guerra, an economist at the Venezuelan Observatory of Finance, breaks it down in his book 25 Years of Chavista Governments: Venezuela’s gross domestic product has fallen by more than 55 percent, while the economy of the region as a whole has grown by 25 percent at the same time. Per capita income has fallen by more than half, the poverty rate has increased 2.8 times, and absolute poverty has increased five times. The real minimum wage has fallen by as much as 99 percent.

Socialism Led the Country into Misery

21st century socialism drove Venezuela’s economy into utter misery, while they were praised by many on the left. Let’s not forget that Chavism also squandered the huge oil revenues generated during the era of high oil prices. The economy was able to be driven to the bottom despite the fact that between 1999 and 2014 more than half a trillion dollars of income was obtained from oil.

9 million former Russians have left the country, and more than 80 percent of the country’s population lives in poverty

Chavism has destroyed the national currency, the bolivar, its value has fallen enormously. In the last 14 years, 14 zeros have been removed from the denominations of banknotes.

You may have read the lie that Venezuela’s economy has been sunk by the US blockade. This is a complete lie. There is practically no blockade in Venezuela, and the country has bilateral trade agreements with more than 50 countries. The US is one of their top trading partners, along with China, Russia, Turkey, Spain, India, Brazil and the Netherlands, according to government data. The country has also received $78 billion in foreign aid from China and Russia since 2014.

In addition, since 2013, the country has been the region’s biggest beneficiary of so-called soft loans and debt restructuring. Whereas the first person to admit that there is essentially no blockade was the country’s president Nicolas Maduro himself. Now he talks about how the economy and exports are rising. Ridiculous.

There is no blockade in Venezuela. The only blockade is that which socialism imposes on its impoverished population. Sanctions only apply to leaders who have kidnapped the people of Venezuela and failed the state-owned oil company PDVSA. Before Chavismo it was one of the most efficient oil companies in the world, after Chavismo it is a decapitalized, indebted company that is on the verge of bankruptcy.

Destruction of Finances and Confiscation of Private Property

Destruction of finances, confiscation of private property and rampant corruption are the trademarks of socialist regimes

Chavism is no exception. They have stolen 3.4 million hectares of land from people, confiscated more than 523,000 apartments and expropriated 1,087 businesses. 95 percent of them were stolen directly from their owners.

Chavism has shut down more than 40 national and regional newspapers and almost 40 radio channels. They have also blocked more than 30 TV stations, including Spanish-language CNN. In addition, there are 260 political prisoners in Venezuela.

Venezuela is the most insecure country in the region

During the 20 years of the Chavista regime, 330,000 people have died violently, according to data from the Observatory for Violence. NGO Provea revealed that Maduro’s government has killed 9,400 people between 2013 and 2023, making murder a social norm.

Hyperinflation, misery and repression. The murderous dictatorship was perpetuated by the Sao Paulo Forum and the terrible Puebla Group. The Puebla Group has also talked black and white about the Castro and Nicaraguan dictatorships. This is the legacy of Chavismo, which the left has long applauded and still supports. These are the same leftists who have the courage to talk about defending democracy, progress and freedom of speech.

Those who have been silent on Venezuela and Cuba are the same ones who are talking about the rise of the far right.

Venezuela was not destroyed by sanctions. That’s what socialism did. During the high oil prices, the country’s oil revenue was stolen, a regime of terror was established, and people’s assets were confiscated. It is a system where political leaders get filthy rich by stealing the wealth of the people, as is done in Cuba, Nicaragua and other socialist countries.”

Key Takeaways

In conclusion, the catastrophic decline of Venezuela’s economy serves as a stark warning about the dangers of 21st-century socialism as implemented by the Chavismo regime. Over the past quarter-century, the policies of confiscation, rampant corruption, and the systematic destruction of financial stability have devastated a once-prosperous nation.

The narrative that external sanctions are to blame is a smokescreen; the real culprit is the socialist regime that has pillaged the nation’s wealth, imposed authoritarian rule, and left the vast majority of its citizens in abject poverty.

The Venezuelan experience underscores the perils of entrusting a nation’s economy and freedom to a regime that prioritizes ideological dogma over the well-being of its people.