Venezuela is now the riskiest country in the world. I break down the reasons why in my latest for FP. The value added:
Deep down, however, the government understands it is in a bind. It is simply unwilling to remedy the situation. Just last week, President Nicolás Maduro announced that the government would increase the sale of dollars, partly by issuing new debt. At the interest rates the market is charging, this constitutes an expensive transfer of wealth from future generations of Venezuelans to the well-connected elites of today.
It has also resorted to hunting down no-shows for flights out of Venezuela, looking for those wanting to take advantage of currency controls. And instead of promoting the few pragmatists in his administration, he has sidelined them, instead giving more power to the military and the radical Marxists. The government has also blasted private companies (“parasites” in chavista lingo) for demanding cheap dollars while not exporting enough. President Maduro has publicly lamented that the private sector is still a large portion of the country’s GDP, a sign that his dream of “socialism” has not yet been fulfilled.
I really wanted to go where Quico went last week: to say that the government wants to bankrupt the economy. But I chose to stay on the safe side for now.