By David Stephen who looks at the idea of Digital Insurance and how it could potentially help in Venezuela.
Venezuela could have been a testbed to achieve food security for Latin America, as well as new models in small business growth, assuming the recently concluded World Economic Forum was flexible enough to make those themes a priority.
There is a recent analysis in The New York Times, The Biggest Challenge in Venezuela? Forget the Oil, It’s Stocking the Fridge., stating that, “But the U.S. military raid that removed Venezuela’s leader, Nicolás Maduro, has plunged the South American nation into a chaotic new chapter of political and economic uncertainty, setting off a new wave of inflation and currency woes pushing basic grocery items out of the reach of many Venezuelans.”
Food Security, could Digital Insurance help Venezuela?
“The economic turmoil is now threatening to deepen a yearslong humanitarian crisis in Venezuela, where more than 70 percent of people already live in poverty, according to a survey by a group of leading universities in the country.”
“At the core of the sharp rise in food costs is Venezuela’s dependence on the U.S. dollar, widely used in everyday transactions because it is typically less volatile than the country’s own currency, the bolívar.”
“Vendors often buy from suppliers in dollars, so they peg prices to the currency. And they typically charge higher prices if buyers want to pay in Venezuelan bolívar.”
“Venezuela’s minimum monthly wage, eroded by a decade of inflation and not adjusted in years, is now equivalent to roughly 50 cents. The government has tried to plug the gap, in part, by paying public-sector workers bonuses, though these have also diminished in value as the currency continues to wither.”
Food Security Digital Insurance
To solve food security in Venezuela within 8 – 12 months, there can be a product called food security insurance across the country. The purpose of this insurance is to raise capital to subsidize a number of farming necessities in the nation.
For example, in Venezuela, like in other places, necessities for agriculture include irrigation, land, crops, farm machinery, fertilizers, pesticides, storages and transport to market.
Now, whatever makes food scarce, expensive or unavailable can be linked [hypothetically] with the price of two or more of these necessities. There are also regions in the country that some [subsidized necessities] might be easier as well as crops of staple foods that some [subsidized necessities] may have higher impact.
In Venezuela, important crops that make the basis for food variants include maize, beans, rice and plantain. Now, if some of the agricultural necessities to two or more of these crops are provided, how much will it boost supply and extremely lower retail price, such that no matter the lack in a family, they can still afford enough food?
The goal is to raise capital to subsidize necessities that would be applied to some crops to ensure they are oversupplied, hence extremely inexpensive. There can be national and regional agricultural necessity subsidy, as well as for crop options as well.
Venezuela already has Comités Locales de Abastecimiento y Producción [cheap food handouts, CLAP] and bonos [cash handouts]. So, it is possible to germinate the food security insurance as a pivot from both.
There are two ways to motivate demand for the insurance. The first is that those that buy will be eligible for a raffle to win certain food items. The second is that those that buy the insurance will qualify to purchase the subsidized food items when it is out.
This means that ultimately the insurance is a ticket to buy subsidized high-supply food. So, rather than food or cash handouts, with lots of uncertainty and volatility, it is possible to structure it with a digital insurance product, so that people have more to eat, wherever they are, for however less they have.
The technical and business models can be expansive, to ensure that it becomes sustainable and protected from all kinds of risks. If this insurance can be made in Venezuela, it may begin a food security revolution in Latin America and the rest of the developing world.
Small Business
It is possible to setup a Small Business Growth Research Lab for Venezuela. The purpose is to organize new models to boost local hiring, expand options for remuneration, develop spending pegs, organize learning programs through libraries and much else.
For example, on many roles, it is possible to hire more than one more, but then to tier the roles so that they are paid differently according to skill level. Also, it is possible to work on marketplace expansion for small businesses using large language models.
For Venezuela, the opportunity for change is not simply about leadership or just spiking oil production, but models in food security and small business growth, to also be aided by artificial intelligence.
David Stephen currently does research in conceptual brain science with focus on the electrical and chemical configurators for how they mechanize the human mind with implications for mental health, disorders, neurotechnology, consciousness, learning, artificial intelligence and nurture. He was a visiting scholar in medical entomology at the University of Illinois at Urbana Champaign, IL. He did computer vision research at Rovira i Virgili University, Tarragona.
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