Venezuela currently produces no official inflation or national income and output figures, because the government does not like the truth to emerge about the damage its economic policy is doing. Analysts reckon inflation in Venezuela is well over 100% per annum, with some thinking it is now running at several hundred percent. The bolivar, their currency, has plunged drastically on the black market.
The government has printed large sums to try to keep the economy growing. It is likely output will decline by at least 10% this year.Prices of some essentials have been fixed at low levels to try to help the poor. As a result there are great shortages, and many of the poor cannot get the items they need at all. People have been banned from forming queues outside shops in the streets to try to buy things. There is a military crack down on smuggling, as people seek to buy up scarce products like flour and petrol to smuggle the output to Columbia where prices are closer to world levels. Basics like milk, soap, toilet rolls and bread are often out of stock in the shops. The leader of the Opposition has been in prison.
This year Venezuela may find it impossible to service her foreign currency debts. The country is short of foreign exchange to buy the imports they need in a range of basics for daily life. Venezuela is demonstrating that a combination of controls and overrides of the markets and prices, and printing extra money, leads to a break down in the supply system. The poor suffer as well as everyone else. Far from creating plenty, stimulating the economy and getting people out of poverty, these policies do the exact opposite.
I mention this today, because Mr Corbyn is an admirer of the politics and government of Venezuela. He wrote an article praising it in 2009, and renewed his favourable comments this year. I recommend he looks at the poverty, the scarcity of goods and the difficulties for many people in their everyday lives created by this socialist paradise. Just as the Europhile left need to explain or condemn mass unemployment in Greece, so Mr Corbyn needs to explain or condemn the impact of high borrowing and money printing on Venezuela. Venezuela suffers deep and severe cuts in living standards, from a government which claims to be an opponent of austerity.