Jessica Hammer is a student in my "Monetary and Financial Theory” class at the University of Michigan. Students in the class write three blog posts a week for an internal class blog. Of the ones they select as their own best work, I have been choosing a few to publish as guest posts on supplysideliberal.com. This is Jessica’s second appearance here. Her previous guest post is “Jessica Hammer: The World Poverty Situation is Better Than You Think.” This post about Venezuela is a grim but powerful complement to Ezequiel Tortorelli’s guest post, “The Trouble with Argentina.” Here is what Jessica has to say about Venezuela:

When someone hears about Venezuela, I suspect the first thing most people think of is oil. Of course, this is due to the fact that this country is an OPEC member and exports around 25 million barrels of oil to the United States each month. Venezuela has one of the most abundant oil sources in the world but, unfortunately, it is being wasted. Perhaps you remember ex-President Hugo Chavez, and his passing in recent years. Many hoped the tyrannical government would disappear along with him, but the power of “chavismo” (the support for Chavez’s socialist reforms) prevailed. But the current president (the used-to-be bus driver who received no college education and is bluntly incompetent) , Nicolas Maduro, is slowly losing control of the country – or so they hope. The world knows little about the horrid situation in Venezuela, and how this potentially-wealthy nation is destroying itself.

Caracas, the capital, is currently (and has been for a while) the world’s deadliest city. Not Baghdad or Mogadishu. Mexico is known for its drug-related violence, but its murder rate is well below Venezuela’s rate of 73 per 100,000 citizens. Caracas, however, experienced a soaring rate of more than 200 per 100,000 in 2012 (and 2013 was even higher). To put this into perspective, Venezuela’s murder rate is higher than the death rates of the US and the 27 countries of the EU combined. Violence is so predominant, that people live in constant fear of going outside. Most wealthy people have to travel with bodyguards in order to avoid kidnappers. I personally know a lot of Venezuelans, and they all know of someone who has been murdered – either friends, family, or friends of friends. Most cases like these are a result of robberies. But gun fights are common to establish property rights, personal disputes, or drug-related problems. And the problem isn’t only the fact that violence is so widespread; nearly 90% of murders go unpunished. The police are so corrupt that they are often the ones involved in murders.

As if this weren’t enough to put up with, Venezuelans face daily shortages of basic goods. The most common ones include toilet paper, flour, sugar, cooking oil, and chicken. Not only are there rations on available goods, but these goods are not readily available. Producers point to the price controls and the limitations on foreign currency, which limit the availability of resources needed for production. Also, there are viable claims that 30 billion dollars were robbed from Cadivi (the government body which administered currency exchange) by the government elite. This is seen as the cause for the country’s current shortage problems.

Additionally, inflation is among the highest in the world at 56%.  Maduro eliminated the Cadivi program last year, which Venezuelans used to transfer dollars overseas. Today, a dollar goes for 84.2 bolivares in the black market – 13 times more than the official rate. Toyota is halting production, while Ford is significantly reducing its production in Venezuela. Venezuela’s economy is in shambles.

And its government is worse. Without getting into too much detail, Venezuela’s government is best described as a raging civil war where the Chavistas in power have bought the support of enough people to think they can deceive the country into thinking that they are representing them. In the last elections, the result was announced before all the votes were counted. People took to social media to report the fraud. Pictures and videos of military men burning boxes of ballots quickly spread over Facebook and Twitter. But the government had enough power over the military to stay “enchufados” (plugged in), as the opposition says. However, beginning February 12th, Venezuelans have taken to the streets by the millions. They are peacefully protesting against the government that is driving their country into ruins. Sadly, many people have been killed as they continue to take to the streets in protest, and the government persistently uses military force to subdue them. Now, they are outraged that the government is so blunt in oppressing them – not even trying to hide it anymore.

It is tragic to see a country so rich in natural resources, with so much talent and potential, deprived of its capability to provide its people with a decent life-style. Corrupt governments have a far-reaching effect on the economic well-being of a country. Most people in the US, and many other democratic countries, don’t realize the deep extent of corruption that exists in places like Venezuela. My intent is to raise awareness about this. The Venezuelan government is not the only corrupt, undemocratic government in the world, but at the moment, it stands out as one that is close to being brought down in favor of a more open, honest government. More pressure from foreign governments is essential–along with the noble efforts of the Venezuelan people–to put Venezuela back on the path of freedom and democracy.