The Visible Hand of the Market: Economic Warfare in Venezuela

Translated by Department of Translation and Interpretation of the People’s Power Ministry for Foreign Affairs of the Bolivarian Republic of Venezuela, 2017. PUBLISHER’S NOTE 4 FOREWORD 12 THE ECONOMIC WARFARE AND 12 THE VISIBLE HAND OF THE MARKET 12 INTRODUCTION 19 I. PLANNED SHORTAGES 33 Emerging concerns leading to this research 35 Given these arguments, we ask the following: 35 Shortage, production, imports, delivery of foreign exchange and consumption 36 II. INDUCED INFLATION 51 1. Manipulation of the parallel exchange rate 52 2. Induced inflation 66 3. Costs inflation and supply shock: unconventional warfare method 79 4. Conclusions 85 III. SUPPLY BOICOT 90 Why is it necessary to regulate prices? 98 Prices control in Venezuela as a source of shortages 99 Characteristics of food products in short supply 104 Final remarks 105 IV. COVERT TRADE EMBARGO 108 Foreign exchange allocated to large pharmaceutical corporations 111 Financial reports by the largest pharmaceutical corporations 113 On personal care and household products 118 V. INTERNATIONAL FINANCIAL BLOCKADE 130 Country-risk 131 Country-risk and payment of foreign debt service 133 Country-risk and oil barrel price 136 Country-risk and international reserves 136 Country-risk and GDP 137 Country-risk and inflation 138 Country-risk and the illegal exchange rate 139 Other mechanisms of international financial blockage 142 Smear media campaigns 142 Smear media campaign against pdvsa 2017 bonds exchange 144 Financial intermediaries 146 Final remarks 147 VI. FINAL REMARKS 151 Perspectives for the near future 154 PUBLISHER’S NOTE FOREWORD THE ECONOMIC WARFARE AND THE VISIBLE HAND OF THE MARKET INTRODUCTION I. PLANNED SHORTAGES Emerging concerns leading to this research Given these arguments, we ask the following: Shortage, production, imports, delivery of foreign exchange and consumption II. INDUCED INFLATION 1. Manipulation of the parallel exchange rate 2. Induced inflation 3. Costs inflation and supply shock: unconventional warfare method 4. Conclusions III. SUPPLY BOICOT Why is it necessary to regulate prices? Prices control in Venezuela as a source of shortages Characteristics of food products in short supply Final remarks IV. COVERT TRADE EMBARGO Foreign exchange allocated to large pharmaceutical corporations Financial reports by the largest pharmaceutical corporations On personal care and household products V. INTERNATIONAL FINANCIAL BLOCKADE Country-risk Country-risk and payment of foreign debt service Country-risk and oil barrel price Country-risk and international reserves Country-risk and GDP Country-risk and inflation Country-risk and the illegal exchange rate Other mechanisms of international financial blockage Smear media campaigns Smear media campaign against pdvsa 2017 bonds exchange Financial intermediaries Final remarks VI. FINAL REMARKS Perspectives for the near future BIBLIOGRAPHY DIAGRAMS