Topic: Not communism: The real cause of hyperinflation in Venezuela (Read 560 times)

I took upon myself the right to write such information, tk. I am a former citizen of the USSR, I have relatives living in Russia, I often traveled to Russia itself and saw it from our borders to Kamchatka, and this data, which I spoke about, is not from the media but from personal observations, plus information from open sources ... This is what is happening in Venezuela - I can only speculate, based on information from open sources, history, recorded facts

Well, I cannot discuss anything about it, really what the people live internally is something else, nothing to do with what is shown in the media, the figures that they handle I fully trust them, something similar happens in Venezuela, although I think Venezuela is much more destroyed and they don't know how to get out of it. In this sense, I think that everything that is said in the media is only the tip of the Iceberg, there are many things that many do not know, those who best describe the situation are the people who live in the internal system, that is where the It is true of everything and I am sure that there are still many more things that are ignored and that obviously are not made known.

Communism in Russia Are you seriously In Russia for a couple of decades, power is a mixture of state banditry (in relation to internal subjects) and state terrorism in relation to the outside world!
Not about any "searches to improve people's lives" there! You know, for example, that in Russia, which is the leader in gas supplies, about 60% of residential buildings are not supplied with gas! You know that in a country that should be one of the richest, according to official figures alone, 13% of the population lives below the poverty line! And according to unofficial ones - more than 40%. The debt burden of the population is growing steadily after 2014, more than 40% of the working-age population cannot pay off debts in the short term (these are already overdue debts), the overdue debt of able-bodied Russians is more than 20 trillion rubles, and this is an average of about 18-20 monthly wages! Another 20% of the working-age population are "chronic" non-payers of loans.
The retirement age was recently raised as the pension fund tends to zero, and so beggarly pensions lag behind rising inflation every year.
You know that in 20 years, almost 50% of schools and hospitals in Russia have been destroyed, but the number of churches of the ROC sect (the so-called "Russian Orthodox Church" point of view of the network itself) ...
In a word, don't read the state and state-controlled, Russian media are all "fairy tales and fantasies"
To be convinced of this - just look at the official data of Rosstat!


And if we talk about communism - even in theory there are no words about the growth of the standard of living of citizens, as about the goal or consequence of some kind of action, there the main concept is limiting self-regulation and limiting any freedoms - from the choice of style and color of clothing, to the right to demand changes, and by itself a limitation on the influence on power! Everyone should be the same, everything should be the same, everyone should be happy about the same thing!

I agree with OP's point. Communism was not to blame for Venezuela's downfall, and the country was only just turning to communism.
Their economy collapsed because they did not control the black market currency rate. That is the cause of the collapse of the national currency.

Communism is a current that in fact will deviate at some point, I know that there are different types of communism, and I do not see that people who live in communism live happily, it is always with the desire to leave that country where it occurs the style of government, not to mention that the worst of all models is that of Venezuela, where opportunities are taken away from at least 90% of university professionals, and from all people, without exception.

The communism that I see that works in a not so bad percentage is that of China and Russia, but in the same way they look for a way to have a better life, each of those countries has many limitations, I will never support any type of communism, because I am sure that I will not see something positive, no matter where it comes from, since they kidnap all the freedoms of people and it is only valid that their main presidents dictators and dictatorial systems dictate mercerd, I do not see possible happiness there.

The main problem of attempts to realize socialism / communism is that, under the guise of, in fact, good ideas, some of the most bastard regimes in the history of mankind were realized. As a result, theoretically human-loving ideologies and concepts degenerated into monsters that destroyed tens of millions of people, and hundreds of millions were forced to live like animals, depriving the past, present and future ...
In a word - theory and implementation turned out to be diametrically opposed

The real cause is something that everyone knows and largely ignores - which is that a fiat based system is simply not sustainable.

And this is not just something that is seen in Venezuela. This has happened in many countries including Zimbabwe, Germany, Argentina, Italy etc. Imprudent policymakers plus the arbitrariness of money printing is the root cause of hyperinflation.

Makes sense that BTC adoption is increasing over there. People are waking up to the truth.

All kinds of socialism have been developed since then. I am not familiar with them. Neither am I interested. The devil is in the details. However good the intentions of socialism may be, the implementation would always be topsy-turvy.

Anyway, I read Marx's Das Kapital way back in college. I even wrote papers on labor or productivity from it. I cannot remember much about it now but I am still carrying in me those which I agree. Generally, I'm in awe of how Marx held labor with very high regard to the point of calling it the actualization of man. However, again, all attempts to translate the theory into reality are sad failures.

Read the works of the classics of communism. If we discard beautiful words, slogans and sophisticated values, then it all boils down to the fact that society should be unified in everything - desires, tastes, needs, while having low requirements for the standard of living and security, and most importantly, everyone should unquestioningly adhere to a single idea , always, in everything. In a word, the ideal citizen of the "communist paradise" is essentially a vegetable without his own opinion, goals, desires, absolutely obeying the list of requirements for him ...

Obviously someone said that, I will write a topic to respond:Enjoy comunism: Venezuela raises monthly minimum wage to $2.40

I think that in order to realize communism, we must first improve productivity. Imagine that when science and technology are very advanced, if we can complete a lot of work with very little labor, then capitalists will inevitably dismiss a large number of workers in order to increase profits. Then how to solve the workers’ lives is a problem.

If we talk about "Soviet socialism", and there is such a branch of "development" of socialism, then this is an idea close to utopia. Close but not yet utopia. The problem of "Soviet socialism" was in a rather attractive idea (general equality, high social standards, etc.) and disgusting implementation practice. First of all, the problem of the economic direction is the idiotic system of planning the economy and managing the work of state-owned enterprises (private business is absent as a class in this model). The second problem is "you won't go far with one idea." The people did not want to "wait" but already today, well, at most tomorrow, to enjoy the fruits of socialism. But there were still no fruits, and instead of them they offered low-quality products and low incomes of the majority of the population ... Therefore, even the enthusiasts of "building socialism" very soon gave up ... And then oil became cheaper ...
But if you look in the direction of the real manifestations of socialism, then it can be seen in some European countries. High social standards, guarantees, legality, education, medicine and much more that personified socialism!
 
PS you still haven't read nonsense about communism That's where the real utopia or heavy nonsense ...

Socialism is a theoretical system where there's a significant degree of equality. As such, Venezuela is not its practice. You cannot make Venezuela a representation of something it failed to achieve. Venezuela does not reflect socialism as it is. Why? Perhaps because, more than anything else, such a utopian view couldn't be translated into reality. Socialism proposes a certain kind of an ideal state which is next to impossible to implement in the human world.

We could consider it that the failure of socialism is that it is too ideal to reify. And the failures of Venezuela and all states which attempted to seek its implementation is to miss that most fundamental point, to be so naïve as to try make a heaven on earth.

Economic equality is always the promise, it's never the outcome.  That leaves Venezuela as a perfect example of a socialist state in practice.  To try and argue that it's not "socialism" because it didn't achieve the impossible promise that socialists make is to ignore the fact that this is exactly what socialism looks like in the real world because it's not a workable economic model.  Venezuela is the perfect example of socialism's failures because it is the quintessential socialist state.

Well, Venezuela is as socialist as China is a communist, which means it is only as they claim. One of the most basic tenet of socialism is that all members of the society are to fairly benefit from the proceeds of the economy. That is definitely not the case with Venezuela.

Socialism was an attractive system which served as an alternative to the growing monopoly and exclusivity of a few privileged members of society during the Industrial Revolution.

In essence, Venezuela is not a socialist country. It is what a failed socialism looks like.

The more likely outcome is that some agency just put you on some sort of watchlist just for writing that, heh.  Corrupt governments are generally quite fond of locking up radicals before they can stir up any great deal of dissent.  If they think your message is getting through to a sufficiently wide audience and that it's gaining traction, that's when you mysteriously disappear.

And no one says that the problem of Venezuela is communism and Maduro's stupid head! The problem is much older than Maduro. The problem is the huge dependence of the economy on the commodity vector. Earlier, budget revenues were 75% dependent on oil and its price. This is a problem for all resource-based economies. This is a problem both for Venezuela and for Russia - the price of oil has dropped, and that's it, there is nothing to fill the budget with, inflation begins, degradation of entire sectors of the economy, and all this is developing in a circle. Salvation - only a sharp rise in price above the previous "nice prices" in order to FAST get huge sums of money to save the economy. From world history - the "great USSR" collapsed like a house of cards in a matter of years, after oil prices fell ...

People know the government is corrupt, but having an ability to do anything about it is an entirely different matter.  Revolutions aren't easy because there's no centralization.  Once any momentum gets large enough to pose a threat to the government, they know about it and violently crack down.  

On another matter, your comment that people should be brutally murdered or assassinated as a means of controlling the government is just as disturbing as when a government employs those tactics to control a civilian population, and has no place in the modern world or a civilized society.

Those who line their pockets won't be affected by the downfall of the country because they're already safe since they have a lot of money and they've already covered their bases. One thing to end this corruption in the government is if the people smell that there's a hint of corruption, a revolution should happen where the people systematically assassinate those officials or have them kidnapped and brutally murdered, that's the only way to solve that, they will be scared to commit any form of corruption because they know that anyone in the public will be able to kill them, don't jail them, don't let them enjoy the money that they've stolen.

Venezuela is definitely a socialist country.  It is run by the United Socialist Party of Venezuela, governs the economy with socialist objectives, and has nationalized private businesses in the name of socialism (and then proceeded to run those industries into the ground through cronyism and general incompetence, particularly the oil industry).  Prices are set by the government in Venezuela, another classic hallmark of socialism.  There is no way you can look at the government and conclude it's not socialist. 

It is undeniable that the economy is one of the important foundations in the life of the nation and state. A growing and stable economy will be able to create prosperity. On the other hand, a slumped and chaotic economy will cause misery for every citizen.

Venezuela as a rich country that was initially able to provide welfare to its people turned out to have a strong and stable economic foundation. The economic turmoil that began with the decline in world oil prices became a real nightmare.

A prolonged economic recession, a weakening currency value, a food crisis, as well as a decline in the country's foreign exchange are the causes of hyperinflation that improve economic conditions in the country.

So in the end, whether people in a country starve to death has nothing to do with communism, socialism, or capitalism.

What determines their living conditions is the level of national development and production efficiency. It can even be said that the welfare and health care system is built on high production efficiency.

Not only the officials are corrupt. The whole country is. These government guys did't come from a different country. They are Venezuelan people. The other stuff like printing FIAT and socialism are not even significant compared to the fact that these people are corrupt. Cuba is socialism too but we don't hear them bitching or dying of hunger.

Please do not quote other irrelevant posts.

I elaborated on the hyperinflation in Venezuela. topic quoted from an economics article.

I did have a fierce quarrel with amishmanish, but it did not hinder this topic.

I gave you another post with a merit.And I will continue to update my not communism series.

Actually, I would say he is Chinese. I was familiar with his nickname and when I saw his post history, I saw that he created this thread:

Is there discrimination in the forum?

In any case, I don't care where he is from, he seems to think communist regimes are wonderful, and that only happens if you are very close to those who are in charge. As a fellow forum member told him:

This.  Whether your country is capitalist, socialist, authoritarian, libertarian, or whatever else, if people in the government are lining their own pockets and the pockets of their supporters, it can and likely will fail at some point.  You can't have people siphoning off large sums of money without consequence. 

The real cause of hyperinflation in Venezuela is a combination of continuous printing of fiat, corruption of the government officials and zero to no investment in public service. It's not communism there, I think they have socialism which aims to satisfy the needs of the people first before anything else which is a bad move for them.

indeed the complex problem here is when rich countries are not accompanied by competent human resources and this is a real example and the difference is very clear.
Norway is a country that even though the country is small but they can manage and make the excess of fuel and oil a profit for the country and even its people and if you look at things that are in Venezuela, this actually feels inversely proportional when government policies depend on only one sector in this case. state revenues and accompanied by very high levels of subsidies, resulting in nepotism everywhere and indeed hyperimplation is certain and can no longer be maintained because indeed the policies that the government is carrying out are indirectly destroyed from within by some corrupt governments themselves.

Venezuela's government waged war against capitalism and the private sector in the country. That's what caused the demise of their economy. They harassed and threatened to nationalize factories in the country run by toyota, kelloggs and other big name brands. Then after toyota, kelloggs and other corporations fled the country, state officials went in and looted everything like common thieves.

State regulators overprinted the native currency, the bolivar, in an effort to compensate for the destruction of jobs and business their heavy handed authoritarian approach had caused.

Socialism? Communism? Whatever you call them, they floated the idea they could give people free things (free healthcare, free education). And promoted the idea that attacking and destroying capitalism would improve qualify of life. If you attack your local economy and kill off most of big business people rely upon to support themselves, your economy dies. Who would have guessed.

Communism, Socialism, Capitalism, and other “ISMs” will lose control of the financial system as long as the leaders behind the “ISMs” are INCOMPETENT. I believe one of the next countries to experience a Hyperinflation Event will be that of CapitalISM. The unsustainability of BRRR money printing economics.

I doubt the particular form of government in Venezuela is the one primarily causing the economy and the entire country, so to speak, to crumble down. Venezuela is not even truly a socialist country. The problem, of course, is a lot more complicated than it may seem, but I guess it is mainly the government's mismanagement that led to the country's failure. Of course, too much reliance on oil is just one big failure representing mismanagement. That's basically a lack of foresight on the part of the government's experts.

TLDR,

The only reason for hyperinflation is increased money supply by many magnitudes. Those newly printed money are distributed to a few government officers that owns the oil supply, lots of people in the country does not get more reward for produce anything, thus the supply of tangible products and services are still very limited, then the price of everything just go up

The strange thing is that once price go up, there is usually a higher motive to drive more production, but if it goes up too fast, there is no motive of production, hoarding assets instead become the first choice

How it has nothing to do with communism if Venezuela's government is heavily influenced by marxism which causes them to make all those irrational decisions that led to their downfall. If they weren't socialist, they would have adopted better policies. Of course capitalist governments can do stupid things too, but they rarely screw up so extremely that their currency enters a hyperinflation.

Even i think that the situation in Venezuela happened because of corrupt officials and the leaders who comes up with bad economic policies will ruin any economy and i believe that the constant bad economic policies is the core reason why their economy went into hyperinflation.

One of the strangest decisions i have seen,  no idea what kind of policies Biden will come up. spend trillions in the war sacrificed life and then soldiers who lost their limbs and is handicap fighting the war and now leaving everything behind after 20 years and dragging them back to where they  started  .

Norway and Saudi Arabia also depend on the oil exports but they didn't collapse.

I think the situation of Venezuela has nothing to do with the oil prices.

The country is just corrupt.

Some people just cannot differ right from wrong and they cannot think for the long term.

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Look at Afghanistan... The US gave them guns and training so they can fight Taliban, built their infrastructure, educated them, spend trillions of Dollars. In the end when the US left, all surrendered to Taliban. ¯\_(ツ)_/¯

Well, in reality communism is fully to blame for the catastrophe that Venezuela is now going through, is it a fallacy to say that this absurd policy did not end the country? OP is Venezuelan? the only way to speak like this is because he is obviously a supporter of the government, the elimination of small and medium industry, the total of the whole disaster began when unsustainable economic decisions were made and full of impulses.

It does not make any sense to say that the disaster did not come after being in a communist system, now the only solution that can be seen is for that whole system to be destroyed, or for them to adopt BTC for everything, so that hyperinflation ends, and that is what I say properly since every economic study points it out. The source was obviously made by an economist who has no idea about the situation in Venezuela nor did he experience it.

I don't understand. You say the failure of Venezuela has nothing to do with communism, although you literally explain how communism works in practice from your second point (abnormal trade theory) on. If negotiations with foreigner nations were disturbed it was due to the ideology, if the government became heavily interventionist in economy it was also due to the ideology.
You just forgot mentioning the human rights violations, unrestrained corruptionl, power abuse and close connection with another communist countries. All these factors also lead foreigner countries and investors to stay away, harming the local economy even more.

Well, what I heard about the reason for the crisis in Venezuela was pretty simple, it was the oil pricing going rock bottom due to global supply increase as well as later due to onset of covid. In this situation, while the expenditure of government was pretty high, the incomes and foreign exchanges of the country shrank a lot leading to a terrible fiscal deficit for which the country had no option other than to print a lot of money and therefore leading to this hyperinflationary scenario. Very simple speaking there is no way that this fiscal deficit could be filled until there is an increase in oil prices once again, but even then there could still be issues with the Venezuelan currencies, I think it's just another Zimbabwe in making.

I think from what I've read, it's more of an oil thing and it's more on the side of the successor of the late president in which the corruption just got more bigger I think. I think what they failed to do is that they didn't have the right people in their cabinets to deal with different situations.

You’re thinking too good of the Venezuelan government. The Dutch disease may be present (at least comparing the description you gave and some of their issues tells so), but it’s only half of the problems.

What about the insanely corrupt government? And outright economic ignorance. They have the biggest oil reserves in the world and the governments can’t even implement it on the global market, and create appropriate conditions for small business development. On top of that, they print money like crazy, which results in hyperinflation.

The current situation in Venezuela makes me think about my own country, which is one of the largest oil producing/exporting states and yet one very corrupt country in the world, concentrating solely on oil may be counterproductive, but it's not really too bad, what's worse is when the revenue being generated from it isn't put into good use, it then becomes a situation were the country is using up it's only valuable resource, but Instead of the proceeds to be used for the development of the country, it is going straight into the pockets of a few 'privileged' individuals.

It's a pretty difficult situation Venezuela finds themselves presently, and tbh, I do hope things in my own country do not get as bad as that, corruption is really the bane of many countries and their economies, if people in power can more often than not, put the needs of their people first, then many countries would prolly not be struggling economically today.

It's a combination of socialism and corruption of their government and over reliance to oil that has caused this hyperinflation that they have been experiencing now and if the leaders of this country invested on infrastructures like hospitals, schools and other public infrastructure then we would've seen something different, they got too complacent that they didn't expect oil to go down in prices.

Asking for international assistance, their current national conditions, what kind of national assistance is more conducive to their long-term development?
Should they carry out domestic industrial transformation? Just like China 10 years ago, it built a world factory, stepped up its domestic infrastructure, and found another way out.

To increase the utmost efforts to carry out the quality education of the people, we must have the spirit of hard struggle and change the national economic level and spiritual realm.

Finally, the most important one is a far-sighted government team, not when oil prices were high before, for so-called political purposes, they actually used price-limiting policies to destroy Venezuela’s private economy and used some internationally imported commodities to do so Directly replacing the industrial and agricultural products of their own countries, this approach is too short-sighted.

Yes, as I said in the topic. The reasons for Venezuela’s economic nightmare are complex.

Whether it is the Dutch disease caused by a single industrial structure or the economic sanctions imposed on Venezuela by the United States and other countries, they have a certain impact on this inflation.

But these are not the most important reasons. Venezuela could have survived this crisis steadily by relying on the foreign exchange reserves accumulated by previous oil sales.

The biggest main reason was the simple fact that nation didn't had anything to recover, that is the problem. When you are facing a problem and then you can do something to change that, even if you end up failing and not doing it at least you had a chance and you blew it and it is your fault.

Venezuela didn't even had that chance, they became very bad and they had no way out, how could they fix it? Oil is still not as high as it should be to help them, and all the solutions are based on the past and not right now, so they did something wrong back in the day like not putting enough emphasis on other sectors and all but that doesn't change the fact that they had no Plan B, which is the main reason.

You can call the fall anything you want, give any reason you want, but the fact that they screwed up big time and couldn't get better and kept getting worse all happened because they had no Plan B, no way to recover.

That's like suggesting capitalism is a transition state towards crony-capitalism.  That outcome is certainly possible, but doesn't always turn out that way.  Depends who is pulling the strings.

Yep, it's actually a transition state towards communism (based on some definition somewhere on the internet).

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Anyway, there's leading and lagging effect. It's like saying someone died because of lung cancer instead of smoking. Why the government made mistakes in its economic policy? If they have made mistakes, why the effect could be so massive? Is it because they have more power, more centralised planning that prone to blunder or unforeseen shock?

Socialism is just the little brother of communism, however I agree that the problems of Venezuela are very complex, one of the issues is that their foreign investments are very low because companies do not really want to invest in a country which can steal their property and they will have no recourse to get that property back, which means that the state needs to provide for everything for their citizens and we know that governments have the tendency to be very inefficient and this is why we have so many images of empty shelves in Venezuela.

So even if that was not their intention the same scenario that happens under communism is happening there, in which the government has almost full control of the economy and this results in a disaster.

Yup, The problems that occur in Venezuela are not simple.  The hyperinflation that occurred was not only a bad economic condition, but a very chaotic political condition.  This is something that will not be easy to solve, even though any monetary and fiscal policies carried out by the government will not easily restore conditions to good because this is deeply rooted.

Inflation is the disease and cancer that ravages the body of the economy, and the delay in taking solutions to it will make the possibility of solving any economic problem a real dilemma.
The Venezuela crisis is witnessing a mixture of many crises, the most prominent of which are many internal factors such as corruption and mismanagement, random printing of money and a decline in purchasing power. And many external factors, some related to the nature of the economy and the other political.

It's an extreme example of economic failure.

I believe that when you have leaders who have self interest it drives the economy to the left. Venezuela has large oil reserves and that took away the focus of the leaders and they got corrupt to embezzle public money. Oil is a big business for Venezuela but when OPEC don't make oil more lucrative, it affects countries that depends on oil. Like there are other means to avoid the use of oil and countries are changing and diversifying which they are yet to do but they still rely on oil on a large scale.

Again Venezuela has faced some sanctions too.

They don't have communism in Venezuela, they have socialism I think which is a bit different from communism. Their economic development wasn't put in the right place, they didn't invest in infrastructure but instead the individuals prosperity and they only have one way to make money back then which is their big oil reserves which got destroyed when the price of oil tanked.

The main reasons for the general collapse of the Venezuelan economy are:

1. The collapse in oil prices and the government’s printing of money. And in the face of this economic crisis, brings us the biggest warning is that printing money can not solve any economic problems, will only make the crisis more serious;


20. The single structure of the economy prolongs the cycle out of the crisis;


3. Heavy dependence on foreign imports, lack of self-sufficiency, will lead to shortages of goods and materials, people living in poverty situation.

These have nothing to do with communism, and there is no need for such a topic to cause opposition.
Enjoy comunism: Venezuela raises monthly minimum wage to $2.40
Enjoy comunism (II): Venezuela to cut 6 zeros from its currency

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Venezuela has seen an increase in inflation since 2013, and fell into a super-inflation vortex at the end of 2016. At the same time, Venezuela's national economy began to decline in 2014, and the negative GDP growth rate in 2016 was as high as 18%. Venezuela has become the only country in the world that faces both super inflation and deep economic recession.

The two currently popular explanations-"the Dutch disease" and "abnormal trade theory"-are not sufficient to explain Venezuela's economic disease.

• the Dutch disease：

Venezuela's economic structure does have the characteristics of "Dutch disease", that is, it is highly dependent on the exports of a single industrial sector. However, many economies that also have the characteristics of "Dutch disease" have only experienced an economic slowdown after the international oil price fell since 2014, and there is no such a serious economic recession as Venezuela. Moreover, Venezuela, like other countries with similar economic structures, has accumulated a large amount of foreign exchange funds during the period of high oil prices. These resources would have been sufficient to deal with the problems of falling oil prices and economic downturns.

• abnormal trade theory：

There is a view that an important reason for Venezuela’s current economic recession is Venezuela’s tensions with the United States and the United States’ trade sanctions against Venezuela.

By comparing the changes in bilateral trade between the United States and China and Venezuela in recent years, we can also see that the two are very similar. This shows that political factors or foreign relations are not the real reason for Venezuela’s serious difficulties in import and export trade. The decline in international oil prices in 2014 did have an adverse effect on Venezuela’s export growth, but the decline in Venezuelan exports was earlier than the change in oil prices. This once again shows that the changes in Venezuela's foreign trade and economic situation are mainly related to domestic factors.

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The main reason for the Venezuelan economy to slip into the predicament of super-inflation and deep recession lies in the country, which lies in the mistakes of the Venezuelan government's economic policies, including excessive fiscal expenditure policies and improper foreign exchange control measures. The Venezuelan government may have placed too much emphasis on the positive effects of foreign exchange control measures in the short term, but has overlooked their long-term negative effects. When the foreign exchange resources held by the government are nearly exhausted, the depreciation expected by foreign exchange controls has rapidly increased, leading to an overall deterioration in domestic inflation expectations and actual inflation.

1.Continue to expand fiscal expenditure when the economy slows down, consuming the previous reserve resources.

2.Excessive and improper control of the foreign exchange market.

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Improper control of the foreign exchange market is undoubtedly the main reason for the current dilemma in Venezuela. In order to eliminate inflation expectations, the huge difference between the official exchange rate and the market exchange rate must be narrowed. From this perspective, the Venezuelan authorities have two options if they want to overcome the emerging super inflation and economic recession.

1).Strengthen price control and even move towards full control, close the 2,000-kilometer border with Colombia, completely cut off all economic exchanges between the domestic private sector and the outside world, and cut off the private sector’s channels of contact with the market exchange rate; at the same time, further strengthen the control of prices , To weaken the public’s expectations of devaluation and inflation. The difficulty of this path lies in the effectiveness and stability of policy implementation.

2).Implement major economic policy adjustments with international assistance, abolish foreign exchange controls, and shift to full relaxation. Comprehensive control cannot continue to play a role in the long-term, and the removal of foreign exchange control is the fundamental measure to eliminate the difference between the official exchange rate and the market exchange rate in the medium and long term.

Opinion Source:International Economic Review/2017/No. 6