Monday, June 20, 2016

Post-oil economy: Venezuela edition

Is this the way the transition to the post-oil economy will go everywhere?
Venezuela is convulsing from hunger.
Hundreds of people here in the city of CumanĂ¡, home to one of the region’s independence heroes, marched on a supermarket in recent days, screaming for food. They forced open a large metal gate and poured inside. They snatched water, flour, cornmeal, salt, sugar, potatoes, anything they could find, leaving behind only broken freezers and overturned shelves.
And they showed that even in a country with the largest oil reserves in the world, it is possible for people to riot because there is not enough food.
In the last two weeks alone, more than 50 food riots, protests and mass looting have erupted around the country. Scores of businesses have been stripped bare or destroyed. At least five people have been killed.

Not so long ago, peak oil theorists maintained that oil production would max out and decline before demand for oil and the economies that depend on it would adjust, with disaster to follow.What Venezuela signals instead is that trouble comes when demand slows before production does. Policy makers in Russia and Saudi Arabia must be very worried.

No comments:

Post a Comment