Cash transfers are preferable to the intermediation of corrupt and costly bureaucracies, however, during a humanitarian crisis featuring food availability deficit, the first step has to involve directly transporting and distributing food, medicines and so forth. The second step has to do with breaking up corrupt Marketing Boards and directly supplying inputs to farmers. Only after the supply side is restored to health should direct intervention in terms of the supply of inputs and infrastructure be discontinued. At this point, one can switch to providing low cost long term finance for Agrobusiness and 'wage good' Industrialization. Cash transfers would still be necessary for the economically weaker or more vulnerable but as Tax revenue rises, this can be provided indigenously. However, if the original problem was caused by war or civic strife, there may be a need for military assistance and proper training for the forces of Law & Order. Indeed, Civil Society too may need help to function effectively.



Venezuela, it must be acknowledged, has been the victim of a 'resource curse' of such magnitude that it permitted an economically illiterate regime to pursue utterly crazy policies over decades. The alarming rise in criminality does suggest that great care must be taken that Aid reaches the poor and does not enrich the gangsters. However, crediting the Bank accounts of the poor with an amount equal to the revenue realized by selling donated food and medicines is not a 'silver bullet'. It increases effective demand but supply remains monopolistic. What is to prevent gangsters profiteering and using these profits to hire more muscle men with advanced weaponry? Extortion will increase as the means to pay the extortionists increase.



It may be that Venezuela has less crime than appears. Thus the old distribution chains are safe from extortionists and can do arbitrage across the length and breadth of the country. However, Chavez nationalized some of the big supermarket chains like Exito and Cada. Since then Law and Order has deteriorated. It is difficult to see how domestic food production would receive a kick start without greatly improving security for farmers.



Still, we can all agree that the Venezuelans are a remarkable people and that helping them in their time of need will yield great benefit to us all. However, if we look at the recovery of Agriculture in post-Allende Chile, we can see that these things take time. Thus a long term strategy with a range of policy instruments is required.