As the refugee exodus from once-wealthy Venezuela accelerates, concerns are mounting over the extent to which US economic sanctions are exacerbating the suffering of a population already beset by shortages of food, medicine, and fuel. Punitive US measures have included cutting off Venezuela’s access to most of the US financial system, freezing the assets of key government officials associated with President Nicolas Maduro and of the national oil company PDVSA, banning transactions with the Venezuelan central bank and prohibiting oil and gold sales.
Targeting the oil industry is crucial as it accounts for more than 95 percent of Venezuela’s export revenues. As crude oil sales plunge, Venezuela has ever fewer dollars with which to import food, medicines and other necessities. Estimates of oil production lie between 740,000 and 850,000 barrels a day, far short of the 2.3m b/d level which Venezuela sustained as recently as 2016.
In a new study, Venezuelan economist Francisco Rodriguez at New York brokerage Torino Capital set out the evidence that US financial sanctions are associated with a 797,000 b/d drop in oil production, worth about $16.9bn a year. He warned of disastrous consequences in a country which grows barely a third of the food it needs.
“We’re going to see famine in Venezuela,” Mr. Rodriguez said. “Total imports in April were only $303m and around half of those were oil-related. That is just 8 percent of the 2012 figure … even if all the imports were of food, it would still be far off the amount needed to feed the country.”
The human cost of Venezuela’s crisis is rising fast. The UN High Commissioner for Refugees estimates that more than 5 million people will have fled the country by the end of this year while the Organization of American States predicts that the exodus will top 8m by the end of next year.