Venezuela Cash Reserves Dwindle Amid “External” Sabotage of Its Economy

Venezuela is down to its last $10 billion, $7.2 billion of which it will have to spend on outstanding debt payments, as years of U.S.-led economic sabotage continue to take its toll.

Venezuelan President Nicolás Maduro next to a portrait of Hugo Chavez in February 2013. Credit – Reuters

Under different circumstances, one would expect Venezuela to be one of the wealthiest countries in Latin America, if not the world. This, of course, is largely thanks to the South American nation’s massive oil reserves, considered to be the largest in the world. However, for much of Venezuela’s history, that oil has done little to benefit everyday Venezuelans or even its government as U.S.-based multinational corporations – such as ExxonMobil and Conoco – have historically maintained most of the control over and reaped most of the profits from the nation’s oil production.

However, Hugo Chávez worked to change all that by seizing control of Venezuela’s oil industry so that the nation’s most lucrative resource would benefit the Venezuelan people and not foreign corporations. Of course, this earned him the ire of the U.S. corporations he ejected as well as that of the U.S. government, then led by former President George W. Bush. Chavez’s previous reforms – among other factors – had already led him to be the target of a failed CIA coup attempt which was later proven to have had the full blessing of the Bush administration. Emboldened by the failed coup, Chávez went on to nationalize Venezuela’s oil as well as other industries and utilities, including telecommunications and electricity, further strengthening the corporate establishment’s desire to remove Chávez from power. This, of course, led the Venezuelan government to later accuse the U.S. of inducing the cancer that ultimately claimed Chávez’s life in 2013 as a covert means of assassination.

Since Chávez’s untimely death, current Venezuelan president Nicolás Maduro has been fighting waves of destabilization attempts, attempts which seek to remove pro-Chávez politicians like Maduro from power in order to – once again – privatize all of its rich resources for corporate gain. Much of the destabilizing events that have rocked Venezuela have been economic in nature, largely manifesting in shortages of goods and basic necessities as well as high inflation. In addition, the manipulation of the price of oil to artificial lows in recent years – an effort led by the U.S. and its ally Saudi Arabia – also crippled Venezuela’s oil industry in some major ways, forcing to the oil-rich nation to actually import oil.

The manipulation of the price of oil is not the only “artificial” part of Venezuela’s crisis. In 2014, it was discovered that a majority of the shortages of goods that had been fueling civil unrest and causing a massive economic slow-down was a direct result of businessmen hoarding goods and basic necessities – including food and medicine – in warehouses to create the appearance of scarcity while reaping major profits by raising prices and smuggling goods to Colombia. This same strategy was previously employed by U.S. interests in Chile prior to the 1973 coup that ousted socialist president Salvador Allende as a means of generating widespread social unrest. Venezuela, not surprisingly, has seen major bouts of unrest in recent years due to these shortages and related economic hardships. Of course, Western media blames these hardships almost entirely on the Chávez and Maduro-led government.

Though Venezuela’s resilience is commendable under the circumstances, it may not be able to hold out much longer. Venezuela now has only $10.5 billion in foreign reserves, according to data recently released by its central bank. During 2017, the vast majority of those savings – $7.2 billion – will be consumed by outstanding debt payments it owes to various creditors, chiefly China. These latest figures show the toll that U.S.-led economic sabotage has had on the country. For instance, in 2015, Venezuela had $20 billion in reserves and, in 2011, it had over $30 billion. Clearly, this cannot continue for much longer, with the country now set to run out of cash entirely within a year or two. However, the day of reckoning could come even sooner if the U.S. and Saudi Arabia continue to keep the price of oil artificially low as oil shipments represent 90% of Venezuela’s total exports. If Venezuela runs out of cash and the Maduro-led government collapses as a result, it will only be the latest casualty of the nearly century-old U.S. government effort to stamp out Latin American socialism and democracy, replacing it with regimes that are “friendly” to U.S. business and geopolitical interests.

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