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As Pc. This is Planet

0:23

Money from NPR. Hey

0:28

everybody, it's Amanda Aroncik. Today,

0:30

a kind of under covered and

0:32

unexpected update to one of the

0:35

biggest economic meltdowns

0:37

in recent history, the Venezuelan

0:39

comeback. Back in 2016,

0:41

Robert Smith and Noel King explained

0:44

how the Venezuelan economy collapsed. We

0:46

will start there and then

0:48

we will come back with an update, how

0:51

the Venezuelan economy stabilized. Here

0:54

are Noel and Robert from 2016

0:56

when the economy of Venezuela was

0:58

still in free fall. I

1:01

talked with a doctor in Venezuela the

1:03

other day, a neurosurgeon. He'd been working

1:05

in the public hospitals in Caracas for

1:07

free, I should say pro bono, and

1:10

recently he just had to quit.

1:12

The conditions in the public hospital

1:15

were getting too dangerous. I

1:18

didn't want to jeopardize anybody's life

1:20

because of being irresponsible. I'm

1:22

sure you've heard about the situation in

1:24

Venezuela right now. It's in the midst

1:26

of this economic crisis. Claps is probably

1:28

a better word. There's almost no food

1:31

on the shelves of the supermarkets. There

1:33

are riots. Inflation is estimated at 500

1:35

percent and there are these rolling

1:37

blackouts across the city, which

1:40

is a bad thing for neurosurgeons. I

1:42

know colleagues who actually have ended their

1:44

operations with a flashlight that comes in

1:46

the cell phone. They've used

1:49

that for surgery. Oh yeah, at

1:51

least to close the patient. It is

1:53

inconceivable how they operate hospitals in

1:55

Venezuela anymore, but they do. They

1:57

just plan around the blackouts. and

2:00

the water outages, no water for hours at

2:02

a time. And if you live in

2:04

Caracas and you have to go to the hospital, you know

2:06

you should probably bring

2:09

everything from home. There is essentially

2:11

nothing there. There are no gloves, there

2:14

are no sutures. Patients have

2:16

to bring their own food, their own

2:18

gosses. They have to bring their

2:20

own food to the hospital? Absolutely.

2:23

In most of the hospitals, there is not even

2:25

food for them. OK, yeah.

2:28

It is as dramatic as it sounds. Infant

2:31

mortality is rising, up 20% from last year. Diseases

2:34

like tuberculosis and malaria are coming

2:36

back. And the neurosurgeon says

2:38

he would walk through the quarters of the

2:41

hospital and see patients just lying on the

2:43

floor on blankets and on mattresses they brought

2:45

from home. If you

2:47

could even imagine a war zone

2:49

hospital, this is even worse.

2:52

Why? Because in

2:55

a war, you actually either didn't

2:57

plan it, you know, it was

2:59

something that exploded, it happened, it

3:01

was unpredictable. But this is something

3:03

that could have been avoided a

3:05

long time ago with the right

3:08

political and economical measures. Venezuela

3:12

designed their own collapse.

3:20

Hello and welcome to Planet Money, I'm Robert Smith. And

3:22

I'm Noelle King. Venezuela used

3:24

to be a relatively rich country.

3:26

It had money and prestige and

3:28

most importantly, it had oil. Venezuelans

3:31

used to brag that they had the largest reserves

3:33

of oil in the world. Today on the show

3:35

we have an economic horror story about

3:38

a country that made all the wrong

3:40

decisions with that oil money. It's

3:42

a window into the fundamental way that money works and

3:44

how when you try to control it, you

3:47

can lose everything. But

3:57

not here's an example. Discover automatically

3:59

doubles. And

16:00

it becomes impossible to import anything. I mean,

16:02

that's what happened to Alex, the clothing guy

16:04

with the underwear, right? But his last big

16:07

shipment was for something essential. It was for

16:09

medical supplies. We wanted to

16:11

import a shipment of non-woven

16:13

fabric, which is basically that blue fabric

16:15

that's used for surgical

16:17

ropes. Oh, so the stuff you'd see

16:19

in the hospital. Yeah, yeah, basically. But you wanted to

16:22

bring in bolts of this so you could make surgical

16:24

clothing. Yeah. Literally, the

16:26

stuff that the neurosurgeon would have needed

16:28

for surgery. To save people's lives. And

16:30

Alex goes to the government for approval, to spend

16:32

dollars on it. And every day,

16:35

he waits for that approval. You go to

16:37

your computer every morning, once you get to

16:39

the office, you open that system and you're

16:41

like, okay, let's see if I hit the

16:43

lottery today and they've authorized my

16:45

goods. And you're hitting refresh and just

16:47

seeing like, no, no, no, no, no.

16:49

Or no change in status, basically. And

16:51

how long can this go on for?

16:53

We're still waiting to have those goods

16:55

cleared and we still owe that money

16:57

to our suppliers in Asia. So

17:00

Alex does what he never wanted

17:02

to do. He freezes his business.

17:04

He steps away from it and

17:06

stops importing anything. And this happens

17:08

over and over and over again

17:10

with all of the things that

17:12

Venezuela is importing, which is basically

17:15

everything. Everything. Clothing and

17:17

medicine and electronics and food. No

17:20

one can get any dollars to bring

17:22

anything into the country. And this is

17:24

how a crisis gets built out of

17:26

simple economic decisions. Without a real currency,

17:28

there are massive shortages. There are these

17:30

dangerous hospitals. The government is cutting school

17:33

days and office hours just to save

17:35

electricity. And all of this

17:37

in a country that is still exporting

17:40

oil. It is still bringing in billions

17:42

of dollars and it is not enough

17:44

to save them. And no one seems

17:46

to know what should happen next. This

17:48

is a country in the middle of

17:51

a political stalemate because no politician wants

17:53

to do the drastic things and they

17:55

would be drastic that are gonna

17:57

be necessary to fix this. The

17:59

NYU professor. This

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