This was a good comment from HN Venezuela is a country that is simply being looted and there isn ' t a lot of economic theory needed to explain simple theft . The Bolivar isn ' t freely convertible except on the black market so there isn ' t any market from free or otherwise to talk about . How it works is pretty simple . A connected businessman applies to the government to import medicine at the official exchange rate . He then takes those USD and contracts with a shell company he controls in Panama to buy antibiotics and provides all the paperwork . A small amount of those funds are then used to buy antibiotics on the open market and ship it to Venezuela . The profits are distributed around to othe shell companies controlled by various government officials to keep access to the favorable exchange rates . Once they arrive in Venezuela the local paper writes up a story about the shortages and mentions the connected businessmen and officials as heros for importing needed medicine . Pictures are taken showing them inspecting the cargo as its offloaded . But it there is still money to be made ! Prices on antibiotics are regulated so a lot of the shipment is diverted into the black market which siphons up bolivars at the black market price . Those are then traded back at the official favorable rates and the process repeats . It ' s a brilliant scheme because the masses don ' t understand enough to understand how they are being robbed . Pick their pockets and then blame it on the market or imperialist . Doesn ' t really matter as long as its a convenient . And it gets better ! Eventually things get so bad that people start sending relief supplies and cash which creates new opportunities to loot .