I have been monitoring the Cuba scenario.
To me, that is the definition of a failed State holding to the remains of a collapsed country ruled by thugs terrified of a popular armed uprising.
As our economy was destroyed by design, to control the population and crush the opposition among other goals, I believe I can describe the indications better than someone who never watched this happening.
In my research, a few events arose, as expected. Nevertheless, there were a couple of not-so-evident things that I’m going to point out.
By now, most of you reading this are very much aware of the loom and doom that destroyed the Venezuelan economy, and even these days, we feel panic every time the exchange rate with the USD changes.
For this past month (Oct. 2024), it went up 13%.
Enough to shake many people and make others begin thinking again about migrating.
Meanwhile, we have a single-digit “growing”, and a 50% inflation…in USDs. (This year!)
It is awesome to see how, despite oil production increasing at a snail’s pace, inflation seems to be looming again. It has been up almost 15% since 2022.
Economic Indicators
Hyperinflation: Uncontrolled inflation that rapidly erodes the value of currency. Shortly after the bus driver got into the Palace we started to see how our currency started this infamous process. This was so severe that it wiped off most of the wealth and living standards. We haven’t been able to recover it ever since 2015 when it started. This is so self-explanatory that there is not too much need for further discussion.
Commodity Shortages: Severe shortages of essential goods like food, water, and fuel. At the present moment, supermarkets are overflowing with all kinds of products. Of course, getting the money to buy them is the hard part. Most of them come from Brazil, for the sake of money laundering schemes related to gold, and the fees charged by the concession of the narcotics trafficking routes control to the “producers”. But can’t prove it though.
Mass Unemployment: it occurs when a significant portion of a nation’s workforce is unable to find suitable employment. Here, “suitable” refers to jobs that align with an individual’s existing skills and experience. Unemployment in large amounts, is often viewed as a symptom of a deeper malaise within a society. It can serve as a powerful indicator of a nation’s economic health and can signal the onset of more severe societal problems. Mass unemployment is a financial issue at its core. When a large number of people are out of work, it has a ripple effect throughout the economy. Consumer spending decreases as people have less disposable income. Businesses are forced to lay off more workers because of the decline in demand, in a downward spiral.
Recession/Depression: This can lead to a recession or even a depression, depending on the severity and duration of the unemployment. The effect of mass unemployment deteriorates the nation’s tax base. With fewer people working and paying taxes, governments have less revenue to fund essential services like education, healthcare, and infrastructure. This can lead to a decline in the quality of life for citizens and further erode the nation’s competitiveness. The social consequences of mass unemployment are equally profound. High unemployment rates are often associated with increased crime rates, societal unrest, and political instability.
Uptick in property crime: When people are searching for work without success, they may turn to desperate measures to support themselves and their families. I have seen this happening. This means an increase in property crime, drug use, and other serious antisocial behaviors. We have experienced first-hand how mass unemployment is eroding the social cohesion. It is not as if we had faith in the ruling gang to begin with, but re-engineering of our social fabric executed by Cuban agents made it much worse. This led to a breakdown of social trust and made it difficult for communities to come together to solve problems. Mass unemployment can have a significant impact on a nation’s political landscape, and Venezuela is (sadly) one of the most relevant examples in modern History. Discontent with the handling of the economy can lead to political instability and even regime change (as it is already happening, happily!). Populist politicians often exploit the economic anxieties of unemployed workers to gain power, promising easy solutions to complex problems.
Unsustainable Debt: A national debt that exceeds a country’s capacity to repay. An enormous external debt has exacerbated Venezuela’s economic crisis. This situation brings along a payload of negative consequences that have made our circumstances even worse. Let’s define this: debt is considered unsustainable when a country is incapable of paying back the interest or principal on its loans. This situation is known to generate a crisis involving both economic and societal aspects. The government is then forced to allocate a large portion of its resources to debt service, rather than investing in areas such as health, education, and infrastructure.
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