Yes, Cry for Venezuela

Reprinted with permission from Unleash Prosperity Hotline.

It’s an excruciating economic lesson for the ages.

How can one of the most resource-rich countries on the planet, with trillions of dollars of energy and mineral reserves, beautiful beaches, and beautiful people, become impoverished in just 25 years?

It should have per capita wealth equal to Saudi Arabia and tourism like Bermuda. Yet half of its citizens now live in “extreme poverty.”

The simplest explanation? Venezuelan communist leaders Hugo Chavez and Nicolas Maduro abandoned free markets and “rugged individualism” in favor of the “warm embrace of collectivism.”

This is a teachable moment, and these charts tell the tragic story that we pray other leaders around the world (such as Mandami) learn from:

Step 1) Venezuela moved from free market capitalism to socialism and autocracy.

Venezuela’s economic freedom index rating fell in half and now ranks 165th in the world, near North Korea. 

Step 2) Oil production – the major source of GDP in Venezuela – fell by 80% due to government incompetence. 

Step 3) GDP collapsed by almost two-thirds.

Step 4) Inflation soared

Talk about an “affordability” crisis, Venezuela’s inflation was over 500% last year, and it was 130,000% (!) in 2018. We had to move the years 2019 and 2020 off the y-axis in the chart below to show the inflation rates in other years. The local currency is now worthless, which is a good way to destroy a country’s economy. 

Step 5) Poverty skyrocketed

Four of five Venezuelans live in poverty today.

Step 6) Almost one in four Venezuelans fled the country.

The mission of Unleash Prosperity is to educate policymakers and the public about government policies that have been proven, in practice, to maximize economic growth and equitable prosperity in America and around the world.