Fareed Zakaria did a great piece today (Sunday, Nov. 17) on how the Venezuelan government is doing everything on the “how to destroy an economy” check list.
Here is the conclusion. (Read or view the whole piece. It is excellent analysis.)
Venezuela is on a fast-track to total ruin. The world saw this coming under Chavez. We hoped for change, but in his dying days Chavez handpicked a “mini-me” to stay the course. The sad truth is that Venezuela is wasting the world’s largest oil reserves. It could have been as wealthy as Saudi Arabia or Qatar. It could have outstripped Mexico or Brazil. Instead, it is beginning to resemble North Korea, simply by following the most ruinous set of policies in the world.
Click here to see full video.
But why should Americans care — other than for humanitarian concerns for human rights?
The bottom line is trade/jobs and regional stability.
- Venezuela was the United States’ 26th largest goods export market in 2011.
- The top export categories in 2011 were: Machinery ($3.0 billion), Electrical Machinery ($1.7 billion), Organic Chemicals ($1.3 billion), Optic and Medical Instruments ($810 million), and Vehicles ($682 million).
- The five largest import categories in 2011 were: Mineral Fuel and Oil (crude) ($42.0 billion), Organic Chemicals ($309 million), Iron and Steel ($263 million), Aluminum ($169 million), and Fertilizers ($152 million).
Looking at this shows that Venezuela buys American finished products while the US buys natural resources. Finished products — machinery, vehicles, etc — mean high-paying quality jobs.
The top five U.S. states that export to Venezuela include the ones you might think, Texas, Florida and Louisiana (Numbers 1-3.) But Number 4 is Michigan and Number 5 is California. A collapse of the Venezuelan economy could mean more joblessness across the USA.
On regional stability, let’s face it, fighting the transportation of illegal drugs is a key component. And Venezuela is the major source for the shipping of drugs to North America and Europe. (Venezuela: Where the Traffickers Wear Military Uniforms)
There are also humanitarian and business issues.
- By the rankings of Freedom House, Venezuela has a partly free Internet and no free press and is partly free politically.
- Venezuela ranks 165th of 176 countries for transparency, according to Transparency International.
- And the World Bank ranks Venezuela 154 of 156 for ease of doing business.
With jobs across the United States at risk and humanitarian concerns growing, more and proper coverage of Venezuela is needed.