Filenews 8 January 2026
By Steve Forbes
The recovery of Venezuela's ailing and inflation-hit economy will be a difficult task, especially with the uncertainty surrounding the government that will succeed Nicolás Maduro. But there are some substantial and positive moves that Foreign Minister Marco Rubio can push through quickly as he oversees Venezuela's transition to a genuine democracy.
First of all, to keep the International Monetary Fund (IMF) away from Caracas. Resorting to the IMF would be an easy, but disastrous move. The organization promotes toxic prescriptions that hinder strong economic growth, most notably currency devaluations and increased taxation. A protracted economic crisis will discredit a democratic government that supports the free market.
The devaluation of a currency is the definition of inflation. A strong boost to the new Venezuela would be given by the dollarization of the economy, i.e. the rapid replacement of the almost zero-value bolivar with the dollar. Two Latin American states, Ecuador and El Salvador, did just that in the early 2000s, and this change was very successful in both countries.
During his election campaign for the presidency of Argentina two years ago, Javier Milei promised to adopt the dollar as his country's official currency. Unfortunately, like Eva who tasted the apple, Miley couldn't resist the IMF's "dinner" that slipped into his garden and offered him cash in exchange for breaking his pledge to dollarize the Argentine economy. The result was the catastrophic - and completely unnecessary - peso crisis last fall, which forced Milei to beg Washington for a multibillion-dollar bailout package. Given that things have not gone well for the peso, this program is bound to fail, a development that is dangerous for the implementation of Milei's bold reform program in favour of the free market.
Venezuela should introduce a simple, low-tax system, similar to that of Singapore, or with a single rate, as Estonia and Bulgaria have done. The combination of a very low-tax environment and the US dollar as the official currency would quickly make Caracas a magnet for regional – and global – capital. This would stimulate the domestic economy, since wealth would be generated from a much broader base and not just from Venezuela's oil fields.
Another move that would enhance confidence would be to simplify the procedures for the legal establishment and operation of private businesses. Licenses and fees plague start-ups and are a hotbed of corruption. New Zealand and Denmark are examples of how this can be done.
Foreign Minister Rubio could also suggest that the new Venezuelan government consider creating a wealth fund, into which certain oil and gas revenues would be deposited each year, which would be managed by Caracas like a mutual fund. After a period of time when the assets increase, annual dividends could be enacted and distributed to all citizens. In this way, every citizen will have a personal benefit from a healthy oil industry. The state of Alaska has such a fund and could serve as a model for Venezuela.
