Published On: Mon, Dec 7th, 2015

What will the future hold?

dekker_0"You know damn well that all talk about a failing economy in Venezuela is American propaganda!"

"Maduro will win the elections in December for sure, hands down!"

These posts were some of the most moderate reactions on my publication of last September. Others did not shy away from strong condemnations, muscle language and even threats.

But, Maduro lost the elections with 2/3 of the parliamentary seats gone to the opposition. And the USA continued its policy of ignoring the rhetoric of Venezuelan politicians while steadily importing about 700 thousand barrels of Pdvsa oil per day. The US $ 40 million per day from the USA remained a much-needed bit of cash flow for President Maduro in spite of his hateful condemnations of American imperialism and capitalism.

The USA itself is now the largest producer of oil and natural gas in the world. New processes of shale oil, natural gas and renewable energy resources changed the energy markets and made the USA and EU less dependable on OPEC-oil. Reserves in the USA have grown so much that the country could easily drop all oil imports from the rest of the world; in fact, it has become a net exporter.

A glut of oil on world markets caused a drop in price of more than 60%, leaving the already ailing Venezuelan economy in tatters. The continuation of Pdvsa satellite refineries in the Caribbean no longer makes sense economically. Curacao will have to anticipate closure of its oil plant, leased to Pdvsa.

The oil-revenue addiction of the Chavista-government of Venezuela has become its downfall. In spite of all his inflated propaganda, President Maduro will have to come to terms with reality; Venezuela is bankrupt! Its socialist welfare system is not sustainable. Only a long, painful and slow process of economic development and new productivity can lead the country back to some degree of wealth.

Maduro may try to continue his Rule by Decree by sending the Parliament home. Presidential Rule by Decree has become almost normal under the Bolivarian dictatorship.

The gradual loss of the Venezuelan markets for tourism and commerce has already been devastating for the island economies of Curacao, Bonaire and Aruba. With the implosion of the Venezuelan economy and consequent chaos, a further decline seems inevitable.

Many island politicians lived in a sphere of Chavismo intoxication, and failed to anticipate the effects of decline and fall of the Bolivarian socialist miracle. Shifting the islands economic interests to new markets, like Colombia and other South American countries, has not been forthcoming, or very slow and tedious. The Unique Selling Proposition of the islands was their unique location in front of the Venezuelan coast and, unfortunately, a very little else. To re-invent a new island-USP and to retune the economy will be the greatest challenge to come. With the help of The Netherlands, the island's professional elite could form the offshore consulting offices for a new Venezuelan economy, but that would require a change of corporate and domestic culture on the islands first.

By Jacob Gelt Dekker
Opinion columnist for Curaçao Chronicle

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