Steve Hanke Proposes Full Dollarization to Cure Venezuela Hyperinflation

Professor of applied economics Steve Hanke has been appointed as a Special Adviser on Economic, Monetary, and Energy Affairs to a leader in the National Assembly of Venezuela. Hanke is proposing a full dollarization law to eliminate the bolivar and the central bank in an effort to cure hyperinflation, which currently runs at an annual rate of 400%. He estimates the probability of the bill passing between 50% and 80%.

In addition to monetary reform, Hanke is advising the government on energy policy to help restructure Venezuela's $250 billion debt. He urges the country to maximize oil production and suggests exiting OPEC if production quotas restrict growth, citing the United Arab Emirates as a precedent for maximizing reserve value.

While the administration under President Delcy Rodriguez is attempting to attract foreign investment, major U.S. oil companies remain reluctant. ExxonMobil has declined to commit capital to infrastructure, with CEO Darren Woods characterizing the country as uninvestible due to historical concerns regarding private property rights and the sanctity of contracts.