Last summer, we highlighted the crisis in Venezuela had reached new depths as a gang of Mad-Max-like bikers chase down and attack a truck (with molotov cocktails) to steal its sugar payload…
And while we could not see how things could get worse… they have.
As OilPrice.com’s Nick Cunningham warns, Venezuela is moving from crisis to collapse…
While that scenario is really bad, the uncertainty for the country’s output is probably skewed to the downside. The economic, political and humanitarian crisis is only getting worse. The government is in a debt vice, and it is hard to see how it will meet payments this year. The IMF predicts that inflation is running at a 13,000 percent annual rate. GDP is expected to shrink by 15 percent this year.
The flamingo-eating, wild-horse-slaying, rabbit-breeding-for-food utopian society is falling apart as Reuters reports that while truck heists have long been common in Latin America’s major economies from Mexico to Brazil, looting of cargoes on roads has soared in Venezuela in recent times.
With hunger and scarcity widespread around its crisis-hit economy, Venezuela has seen a frightening upsurge of attacks on its increasingly anarchic roads in recent weeks.
“Every time I say goodbye to my family, I entrust myself to God and the Virgin,” says 36-year-old Venezuelan trucker Humberto Aguilar.
Just a few days earlier, Aguilar said he sat terrified when hundreds of looters swarmed a stationary convoy, overwhelming drivers by sheer numbers. They carted off milk, rice and sugar from other trucks but left his less-prized vegetables alone.
Reuters adds that across Venezuela, there were some 162 lootings in January, including 42 robberies of trucks, according to the consultancy Oswaldo Ramirez Consultores (ORC), which tracks road safety for companies. That compared to eight lootings, including one truck robbery, in the same month of last year.
“The hunger and despair are far worse than people realize, what we are seeing on the roads is just another manifestation of that. We’ve also been seeing people stealing and butchering animals in fields, attacking shops and blocking roads to protest their lack of food. It’s become extremely serious,” said ORC director Oswaldo Ramirez.
Eight people have died in the lootings in January of this year, according to a Reuters tally.
The dystopian attacks in a country with one of the world’s highest murder rates are pushing up transport and food costs in an already hyperinflationary environment, as well as stifling movement of goods in the crisis-hit OPEC nation.
They have complicated the perilous life of truckers who already face harassment from bribe-seeking soldiers, spiraling prices for parts, hours-long lines for fuel, and who are banned from carrying guns by law.
“The government gives us no security. It’s madness. People have got used to the easy life of robbing,” said Javier Escalante, who owns two trucks that take vegetables from La Grita to the town of Guatire outside Caracas every week.
“But if we stop, how do we earn a living for our families? How do Venezuelans eat? And how do the peasant farmers sell their produce? We have no choice but to keep going.”
It’s not all biker-gangs, the looters use tree trunks and rocks to stop vehicles, and are particularly fond of “miguelitos” – pieces of metal with long spikes – to burst tires and halt vehicles. In some cases, crowds simply swarm at trucks when they stop for a break or repairs. Soldiers or policemen seldom help, according to interviews with two dozen drivers.
And the government and military are no help…
“Suddenly two military men arrived on the scene, and I thought ‘Thank God, help has arrived’,” Escalante recounted during a break between trips in La Grita.
But as the crowd chanted menacingly “Food for the people!”, the soldiers muttered something about the goods being insured – which they were not – and drove off, he said.
“That was the trigger. They came at us like ants and stripped us of everything: potatoes, onions, tomatoes, cucumber, carrots. It took me all day to load that truck, and 30 minutes for them to empty it. I could cry with rage.”
And if that wasn’t bad enough, OilPrice’s Cunningham warns the U.S. government is considering actions that would exacerbate Venezuela’s predicament.
The U.S. Secretary of State traveled through Latin America trying to drum up support for tighter sanctions on Caracas. He even floated the possibility of a U.S. ban on imported Venezuelan oil. The idea has not been finalized and it could take several forms, including using financial sanctions to target Venezuela’s exports, barring Venezuelan shipments into the U.S., or prohibiting U.S. exports of the diluent needed in Venezuela to blend with heavy oil. All of those measures would have a serious impact on Venezuela’s ability to produce and export oil.
Moreover, such a drastic move would likely force Venezuela’s economy to lurch from crisis to outright collapse.
Yet, Tillerson seems intent on proposing sanctions, possibly even an embargo, on Venezuelan oil. “I don’t want to get into specifics because we’re going to undertake a very quick study to see if there are some things that the U.S. could easily do with our rich energy endowment, with the infrastructure that we already have available what could we do to perhaps soften any impact of that,” Tillerson said at a news conference in Jamaica. He said he would take the matter to President Trump, who has been supportive of tougher action against Caracas in the past.
Tillerson also recently raised the prospect of a military coup in the country. “There will be a change in Venezuela. We want it to be a peaceful change,” Tillerson said on February 1 at the University of Texas-Austin, before his Latin American tour. He cautioned that the Trump administration was not advocating regime change, but the comments certainly raised eyebrows. “Peaceful transitions, peaceful change is always better than the alternative. In the history of Venezuela and other South American countries, often times it is the military that handles that,” he added.
One date that looms on the calendar is April 22, which is when the government says it will hold a presidential election. Few expect it to be free and fair, and many countries, including neighboring Colombia, have said they would not recognize the results.