You would hardly notice from the media in many europeans countries, but there is an economic catastrophe going on in Venezuela. Many economic pundit all over Europe would be surprised with this outcome. After all, since Chavez raised to power, Venezuela has made all the right economic policy choices (according to those economic pundits).
Without an European Commission pushing for balanced budgets, Venezuela could follow an expansionary budgetary policy, with high public deficits that, as so many try to explain us, pay for themselves thanks to the Keynesian multiplier. To ensure a fair distribution of the burden, Venezuela has a corporate tax of 34% and a highly progressive personal income tax. Combined with capital controls, this ensures that the rich can not escape paying their fair share.
On the other hand, the Chavism knows how to protect workers. In Venezuela it is almost impossible to fire someone after the first month of employment. Venezuela ended job insecurity. Workers live in the comfort of knowing that they can never be fired regardless of their performance which, as everyone tells us, increases their job satisfaction and productivity. Furthermore, to set the example to the private sector, the government defined a 4 days working-week.
Minimum wage increases every 6 months and it is now the triple of what it was 2 years ago. As we are told, minimum wage does not generate unemployment. On the contrary, raising the minimum wage increases consumption and, thus, employment. The higher the minimum wage, the more consumption and more employment.
The government has great control on all the strategic sectors: transportation, education, energy, banking and even food distribution. It is not the evil profit, but the common good, that drives management decisions in those companies. The strong hand of the government in the banking sector ensured that the resource allocation was made for the greater good. In the energy sector, the population pays very little for the 20 hours of daily electricity they have access to.
Retiremente age is 60 for men and 55 for women, which leaves a lot of jobs for younger people. After 15 years contributing, you are entitled to a pension aligned with the minimum wage.
Many political pundits in Europe would struggle to identify one wrong economic policy in Venezuela. In reality, they did everything “right”.