Jason Mitchell

When will Jeremy Corbyn admit he was wrong about Venezuela?

The socialist thugs who run Venezuela have made such a pig’s ear of running the economy that the country has now been declared in ‘selective default’ on its international debt. This week, Standard & Poor’s, the credit ratings agency, said Venezuela had failed to make $200m (£152m) in repayments on its foreign debt and that it was in ‘selective default’. Fitch and Moody’s have declared PDVSA, the country’s state-run oil company, in default, as well. Venezuela’s regime has already indicated that it wants to restructure its £100bn of international debt, including the £30bn or so that it owes Russia and China. Investors fear the worst and the haircut could be more than 50 per cent.

The government of Nicolas Maduro ­– the former bus driver who became the country’s president in April 2013 upon the death of socialist superhero Hugo Chavez – has reduced Latin America’s richest nation to the brink of bankruptcy through idiotic economic policies and out-and-out corruption. This beautiful Caribbean land with 32m people sits on top of the world’s biggest oil reserves at 301bn barrels (compared with Saudi Arabia’s 266bn barrels); since 2002, Venezuela has been in the throes of a socialist experiment that Jeremy Corbyn once hailed as the model for Britain.

The regime is trying to blame the US and the country’s middle class opposition for its woes but that is just not good enough. These problems are entirely self-inflicted. At the root of the crisis lies a crazy fixed rate exchange rate mechanism that feeds rampant corruption and the economic incompetents who manage the country show no willingness to end it. It is estimated that 100,000 cronies and friends of the regime get preferential access to dollars at the rate of ten bolivars per dollar.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in