NORMAN — A joke making the rounds in Latin American business circles says Brazil is looking increasingly like Argentina, Argentina is looking increasingly like Venezuela, and Venezuela is looking increasingly like Zimbabwe.
Are things really going that bad? Or is it wildly exaggerated to imply that countries in the region are heading toward the economic mismanagement and chaos that characterized Zimbabwe in recent years?
According to the newly released Index of Economic Freedom, an annual study by the Washington-based Heritage Foundation, Venezuela is virtually tied with Zimbabwe among the world’s most repressed economies.
Of the 178 countries included in the study, ranked from the freest to the most repressed economies, Venezuela ranks 175th and Zimbabwe 176th. They are surpassed only by Cuba (177) and North Korea (178.) Venezuela’s inflation rate is of more than 50 percent a year, one of the highest in the world. By that measure, Venezuela is doing worse than Zimbabwe.
While the African nation printed money like crazy during the past decade — like Venezuela is doing now — and ended up with hyperinflation in 2008, in 2009 it adopted the U.S. dollar and other hard currencies, and started opening its economy. Its current annual inflation rate is about 10 percent.
Despite Venezuela being one of the world’s top oil producers, its economy will grow by only 0.5 percent in 2014, the slowest rate in Latin America, according to World Bank projections. Zimbabwe is projected to grow 3.3 percent this year, according to the World Bank.
When it comes to hyper-bureaucracy and chaotic management, Venezuela may be a world champion. On Jan. 9, Venezuelan President Nicolas Maduro created 111 vice-ministries, including the Vice-Ministry of Supreme Economic Happiness. According to the official decree, the new vice-ministries will “optimize the results and the impact of the work being done by the national government.”
To make things worse, Venezuela has become one of the world’s most violent countries, with much higher homicide rates than Zimbabwe, according to United Nations statistics.