Foreigners (including Venezuelans in el extranjero) want to find an international response to Venezuela’s descent into dictatorship that won’t kill children. We aren’t yet in a situation where inaction will lead to the deaths of even more children. Which means that a lot of people want to find something new.
Julian Adams has such a suggestion: imposing an oil-for-food program on Venezuela. Under Oil-for-Food, created in 1995, the the U.N. permitted Iraqi oil exports under its control. Payments for Iraqi oil went to the U.N. and could only be spent on U.N.-approved imports. The idea was to prevent the Iraqi government from being able to finance its war machine without starving the Iraqi people. In the Venezuelan case, the idea would be to prevent the Venezuelan government from distributing oil largesse to its cronies without starving the Venezuelan people.
One problem is that the U.N. is not about to impose such sanctions. Adams points out that most Venezuelan exports go to the United States and India, but he is not quite right that there is no capacity to refine Venezuelan crude elsewhere. In point of fact, Venezuela could find alternative markets, albeit at a large discount. If the regime really believed that oil-for-food threatened its control, then it would find those markets.
Second, Iraq managed to collect illegal surcharges on the export of its oil. These surcharges were not that large: Yujin Jeong (American) and Robert Weiner (GWU) found that they came to about 0.8% of the total value of oil exports. Iraq had to discount its oil by 11%, so the surcharges did not match the losses, but they earned Saddam Hussein an additional $91 million per year in 2000-02. The equivalent number for Venezuela would be about $135 million per year.*
But the real problem is that the Venezuelan state would continue to control the internal distribution of food and medicine. That would provide a massive source of largess to distribute. Imports could be given to middlemen and sold on the black market. That might be slightly less efficient that the current way the government redistributes its export income, but when was the Bolivarian Republic ever about efficiency?
It is a very neat idea, but I do not see how it could work. Is there something I am missing?
* Assumptions: Venezuela exports 1.1m bdp to the U.S. and India. Price is $41 per barrel on the assumption that Venezuela has to discount those exports. Surcharges come to 0.8%.
It's basically too late for anything to work to any sort of affirmative result.
What will work (in the very long run) is an end to the zombie low-growth, low productivity world, more cash that can buy stuff flowing around, resulting in the usual scrapper petite bouggies pushing things their way.
Be nice if the US/West ended their support of nutbar right-wingers, or enforced a solidarity and message discipline such that people have reduced fear of the aftermath of a change of regime...
Posted by: shah8 | August 11, 2017 at 02:42 AM