Venezuela's 'socialist paradise' turns into a nightmare: Medical shortages claim lives as oil price

[EX500rider]

18. Wasn't like they had a natural disaster..

....it's not our fault they shoot themselves in the foot with bad economic policies.

This article is from 2011 but it outlines some of the problems:

After 12 years of unproductive economic policy, Venezuela has spent more than $517 billion in oil income and increased its total debt from $31.3 billion in 1998 to an estimated $96 billion at the end of 2010.

Economic policies over the past 12 years have amplified the natural resource curse: low growth, high volatility, Dutch Disease, accusations of fiscal greed and corruption, inequality and poverty, and weak institutions. Since 1998, and despite the oil windfall, Venezuela has grown on average 2.3 percent per year. In contrast, the seven largest Latin American countries grew on average by 3.2 percent. Within this period, Venezuela experienced five years of negative growth with an average contraction of 5.6 percent and seven years of positive growth with an average expansion of 8.4 percent. Venezuela is an extreme example of Dutch Disease: in nominal terms, oil exports have grown 410 percent since 1998, while imports have grown 130 percent. But in real terms, exports have fallen 40 percent, with imports more than doubling.

At the same time, Venezuela’s institutional development lags behind its Latin American peers. Using the World Bank Governance Indicators for 2009, Venezuela’s percentile rank for control of corruption is 8 percent; the regional average is 47 percent. Similar selective comparisons are as follows: rule of law (3 percent Venezuela, vs. 43 percent regional); quality of regulation (4 percent vs. 45 percent); government effectiveness (19 percent vs. 50 percent); political stability (11 percent vs. 38 percent); and accountability (26 percent vs. 49 percent).

Venezuela has the world’s cheapest gasoline. But what does this subsidy mean for Venezuelan society? Assuming 17.6 billion liters of annual domestic consumption, the total gasoline subsidy amounted to $9.4 billion, or 4.6 percent of GDP, in 2010.

http://www.americasquarterly.org/node/2436