Learning from the case of Venezuela
Once a rich and well-known country in petroleum, Venezuela is now held together by a combination of heavy-handed authoritarianism supported by targeted social spending. In turn, this once prosperous country has become a basket-case suffering from economic disaster, social disorder, and political instability.
It all began with the Populist policies of Hugo Chavez under the guise to being a hero of Socialism. Though democratically elected, his reign in Venezuela operated as an iron-fisted dictatorship, that violated or ignored both the Rule of Law and legislated limits to stay in power.
Before Hugo Chavez passed away in March of 2013, he named Vice President Nicolas Maduro as his successor. In turn, he commanded his people to vote for Maduro who was the winner of the presidential elections in 2013. At that time, the opposition leaders were unhappy with the result and accused Maduro of electoral fraud, questioning the legitimacy of his presidency. And so, Maduro came to be known as another Populist dictator, hiding behind the pretense of Socialism, claiming to build a secure homeland, prevent organized crime and enforce drug laws. Within a year after the plan was initiated, no reductions in crime were reported and murder rates throughout the country remained the same.
Faced with the first big failure of his regime, Nicolás Maduro became even more authoritarian.
In my opinion, he is responsible for Venezuela poor economic condition because of the following things:
- The Populist policies he applied, under the guise of 21st Century Socialism;
- The constant growth of the national debt that was accompanied by rampant price inflation;
- The constant growth of minimum wages;
- Extensive interventions against the private sector, entry barriers in particular;
- Lack of rule of law;
- Policies that weakened incentives for foreign enterprises to operate Venezuela;
- Numerous examples of government-supported monopoly and price controls;
- Political interference with the oil industry that caused its collapse;
- Attacks on freedom of speech, including the shuttering of private TV and radio stations & jailing journalists for opposing his government.
As we can see, 80% of the people are against him and his work. Another interesting fact is that though he still holds the power to control the military force, he doesn't have the legitimacy to make decisions in other areas.
The current situation is the worst economic crisis in Venezuela's history and among the worst crises experienced in the western hemisphere, with hyperinflation, soaring hunger, disease, crime and death rates, and massive emigration from the country. Observers and economists have stated that the crisis is not the result of a conflict or natural disaster but a consequence of policies that began under the Chavez Administration. They state that “Venezuela has really become the poster child for how the combination of corruption, economic mismanagement, and undemocratic governance can lead to widespread suffering.”
My feeling is that Nepal could become the next Venezuela based on the nature of our politicians and their policy decisions. It is obvious that the economic development in Nepal was complicated by the change in political system from the monarchy to being ruled by the Communist party.
Until the mid-20th century, we could see Nepal as an isolated, agrarian society. Nepal entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electrical power, industry or civil services. However, we made considerable progress towards sustainable economic growth since economic liberalization in the 1950s to open the economy, leading to economic growth and improved standards of living. The biggest challenges faced by the country in achieving higher economic development are frequent changes in political leadership as well as corruption.
After the announcement of the new constitution in 2015, Nepalese people were expecting to see a new Nepal, embarking on a journey of political stability with vibrant economic growth and development. But those dreams were cut short as political parties were still first in line when it came to political power. These are the reasons for which I can easily say that Nepal is going to be next Venezuela:
- The Prime Minister has monopolized government power.
- Economic growth has completely stalled, triggering unemployment.
- Migration of youth to search for jobs.
- Lack of opportunities.
- Foreign investors are reluctant to spend money in Nepal.
- Shutting down the domestic industries.
- Large trade deficit against India.
- High dependency on foreign aid.
- Increase in the crime rate.
- High corruption rate.
- No encouragement for foreign direct investment.
- The increase in the rape rate.
Because of the above problems, we can see that Nepal is in real danger if the situation continues for more than a year. The Nepalese people must search for alternatives – either to migrate to other countries or start protesting against bad government policies.
Nepal is yet to experience opportunities and prosperity that could arise from implementing free-market policies. If we demand reductions in government control over the economy, then instead of becoming the next Venezuela, we will move towards becoming a modern, normal country where individuals are free to choose and fulfill their own destinies.
It all began with the Populist policies of Hugo Chavez under the guise to being a hero of Socialism. Though democratically elected, his reign in Venezuela operated as an iron-fisted dictatorship, that violated or ignored both the Rule of Law and legislated limits to stay in power.
Before Hugo Chavez passed away in March of 2013, he named Vice President Nicolas Maduro as his successor. In turn, he commanded his people to vote for Maduro who was the winner of the presidential elections in 2013. At that time, the opposition leaders were unhappy with the result and accused Maduro of electoral fraud, questioning the legitimacy of his presidency. And so, Maduro came to be known as another Populist dictator, hiding behind the pretense of Socialism, claiming to build a secure homeland, prevent organized crime and enforce drug laws. Within a year after the plan was initiated, no reductions in crime were reported and murder rates throughout the country remained the same.
Faced with the first big failure of his regime, Nicolás Maduro became even more authoritarian.
In my opinion, he is responsible for Venezuela poor economic condition because of the following things:
- The Populist policies he applied, under the guise of 21st Century Socialism;
- The constant growth of the national debt that was accompanied by rampant price inflation;
- The constant growth of minimum wages;
- Extensive interventions against the private sector, entry barriers in particular;
- Lack of rule of law;
- Policies that weakened incentives for foreign enterprises to operate Venezuela;
- Numerous examples of government-supported monopoly and price controls;
- Political interference with the oil industry that caused its collapse;
- Attacks on freedom of speech, including the shuttering of private TV and radio stations & jailing journalists for opposing his government.
As we can see, 80% of the people are against him and his work. Another interesting fact is that though he still holds the power to control the military force, he doesn't have the legitimacy to make decisions in other areas.
The current situation is the worst economic crisis in Venezuela's history and among the worst crises experienced in the western hemisphere, with hyperinflation, soaring hunger, disease, crime and death rates, and massive emigration from the country. Observers and economists have stated that the crisis is not the result of a conflict or natural disaster but a consequence of policies that began under the Chavez Administration. They state that “Venezuela has really become the poster child for how the combination of corruption, economic mismanagement, and undemocratic governance can lead to widespread suffering.”
Until the mid-20th century, we could see Nepal as an isolated, agrarian society. Nepal entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electrical power, industry or civil services. However, we made considerable progress towards sustainable economic growth since economic liberalization in the 1950s to open the economy, leading to economic growth and improved standards of living. The biggest challenges faced by the country in achieving higher economic development are frequent changes in political leadership as well as corruption.
After the announcement of the new constitution in 2015, Nepalese people were expecting to see a new Nepal, embarking on a journey of political stability with vibrant economic growth and development. But those dreams were cut short as political parties were still first in line when it came to political power. These are the reasons for which I can easily say that Nepal is going to be next Venezuela:
- The Prime Minister has monopolized government power.
- Economic growth has completely stalled, triggering unemployment.
- Migration of youth to search for jobs.
- Lack of opportunities.
- Foreign investors are reluctant to spend money in Nepal.
- Shutting down the domestic industries.
- Large trade deficit against India.
- High dependency on foreign aid.
- Increase in the crime rate.
- High corruption rate.
- No encouragement for foreign direct investment.
- The increase in the rape rate.
Because of the above problems, we can see that Nepal is in real danger if the situation continues for more than a year. The Nepalese people must search for alternatives – either to migrate to other countries or start protesting against bad government policies.
Nepal is yet to experience opportunities and prosperity that could arise from implementing free-market policies. If we demand reductions in government control over the economy, then instead of becoming the next Venezuela, we will move towards becoming a modern, normal country where individuals are free to choose and fulfill their own destinies.
