Geopolitics

Venezuelan Health Care System, Now On Life Support

The supply crisis that has plagued supermarkets and consumers for months now has hit the health care sector, with medicines, doctors and even emergency care in short supply. Plummeting oil prices are a major factor, as is the legacy of Hugo Chavez.

Lines forming outside a Caracas pharmacy in September.
Lines forming outside a Caracas pharmacy in September.
Marie Delcas

CARACAS â€" Emilia Lares, 72, has been queueing for 40 minutes in the midday sun outside the pharmacy on Altamira Square, in eastern Caracas. "I'm running low on insulin reserves," she explains, visibly distressed.

She has other sick friends in the same situation, "whether they have from hypertension, heart problems or cancer."

The woman just behind her is 24 and is worried about her birth control, which she says is becoming "more and more difficult to obtain." Condoms have long disappeared from the shelves here. According to the Venezuelan Pharmaceutical Federation, 70% of the population's medication needs are unfulfilled, as the country's health sector is plunged into crisis.

At the other end of the capital, in the working class suburb of Coche, 19-year-old Geomar is recovering from surgery. He arrived at the emergency room at dawn with two bullets in his right leg. "The ambulance that was supposed to drive him to a better-equipped hospital got here five hours late," explains Dr. Efraim Vega. "We had to amputate."

The hospital in Coche epitomizes Venezuela"s health care crisis. The blue concrete facade is partially covered in pigeon droppings. Water shortages are commonplace. The internal medicine service has closed down while pediatrics and toxicology â€" "although they're crucial here," explains Vega â€" are operating at very reduced capacities. Only surgery and traumatology are functioning at full speed. Or almost. There's a shortage of doctors in addition to everything else.

"What I'm doing is battlefield medicine," Vega says, explaining that emergency rooms are overwhelmed with gunshot injuries. On Wednesday, five vans arrived loaded with medical supplies. But how can doctors operate when anesthetics, anticoagulants and antibiotics are missing? The waiting time for an operation for a broken bone is three weeks, and it's done without an MRI or a scan. Only 55 of the hospital's 100 beds are actually operational.

Hundreds of doctors have fled the country. "There were 122 of us in my year, when we finished our studies in 2012," Vega says. "Now there's only 20 of us who are still in Venezuela." He earns 22,000 bolivars a month, which is $3,500 according to the official conversion rate but only $27 according to black market rates.

"The crisis didn't start yesterday, nor with Hugo Chávez," says Pablo Zambrano, the former president of Sector Salud, a grassroots health sector union. And Venezuela isn't an exception in Latin America either. Some of the problems can be traced to former President Chávez, who led the country from 1999 until his death in 2013 and turned the health care system into the crown jewel of his so-called Bolivarian revolution.

"Millions of Venezuelans were incorporated into a health care system from which they had hitherto been excluded," a Health Ministry worker explains of Chavez's reforms. "But they were incorporated into a health care system that was very far from being perfect."

The making of a mess

Eager to bypass public services that he considered to be inefficient and corrupt, in 2003 Chávez created his famous "Bolivarian missions," social programs directly funded by PDVSA, Venezuela's state-owned oil and gas company. The "Barrio Adentro" mission established modest health care centers managed by Cuban doctors in the heart of poor neighborhoods. Cuban doctors were welcomed with open arms in these slums that had never before had access to medical care.

But Cuban doctors could only provide basic services. The construction of comprehensive centers where they could examine, diagnose and operate was slow and disorganized. The budget for Barrio Adentro, directly siphoned from PDVSA, was left unchecked. Public hospitals in the meantime were suffering from a chronic lack of investments.

"A lot of money has been allocated to public health care over the past few years, but the lack of a coherent policy means the money vanished, swallowed up by inefficiency and corruption," Zambrano says. "Things got even worse when military commanders were named at the helm of the Health Ministry," he says.

In 2007, General Jesus Mantilla, then minister of public health, halted the publication of the country's weekly epidemiological bulletin in an effort to prevent health figures from becoming part of the political conversation. Since November 2014, the bulletin publication has once again been suspended. "Today, nobody has any access to public statistics about HIV, malaria, chickenpox or child mortality," explains Jo D’Elia, a human rights activist and public health care expert. Therefore, nobody can quantify the actual impact of the current crisis.

Controls on exchange rates and prices have become a tourniquet with plummeting oil prices and depletion of foreign currency reserves in recent months. So pharmacies and hospitals are now being hit by the same supply crisis that has affected supermarkets for months now.

Shortages are also affecting the private sector, which lacks material, medicine and staff. "Because some of the labor agreements in the public sector, often old ones, had granted employees private insurance, the state decided in 2012 to sign a comprehensive contract with private hospitals," D’Elia explains. "This agreement, which concerns more than 8 million workers, poses a clear principle issue. And it's a threat for the private sector, given that the government is a really bad payer."

It turns out that the ills affecting Venezuela's public health care â€" improvisation, corruption and denial of reality â€" are the same as those of the Bolivarian revolution.

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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