A new report shows that Venezuela, a socialist country with vast oil reserves, is so broke that government officials are offering to trade diamonds for vital medication for citizens.
The report from the Wall Street Journal said that officials from a variety of pharmaceutical companies didn’t respond to the request from Venezuela’s Health Minister because there was no policy in place from the major drug makers regarding accepting precious metals or gems in return for their products.
Inflation in Venezuela has reached levels that in 2017 alone the nation’s currency was devalued 97% on the world stage.
Economists say that the action is unprecedented when it comes to negotiations by governments for medication because previously such trades were only done with companies that deal in mining and oil. There is also a belief that the Venezuelan government does not really have a vast diamond reserve and is trying to bluff drug companies into thinking they can repay any financial credit given to the nation for drug purchases.
The acute shortage of medication in Venezuela is a direct result of the contraction of imports due to the Venezuelan government defaulting on $700 million in bonds in the last six months. The nation is under the economic spotlight not only because of an estimated $1.28 billion in payments that have been missed in the last few years but also because close to $9 billion in bond payments are due in 2018.
Tito López, head of Venezuela’s Pharmaceutical Industry Chamber, told the Journal that 95% of the drugs available in his country just 3 years ago are no longer available and that drugs many in the west take for granted like antibiotics are in short supply.
One pharma company that asked to not be identified said they would consider trading gold for their products but that the Venezuelan government would have to pay in full and the government refused to make that commitment.