Hey Venezuela!

Venezuela is a country rich in human and natural resources but the government is sending it’s people to the street with it’s ugly policies that erode the rights of foreign investors and increase the government’s control of the economy which has yielded no result.

Along its Caribbean coast are tropical resort islands including Isla de Margarita and the Los Roques archipelago. To the northwest are the Andes Mountains and the colonial town of Mérida, a base for visiting Sierra Nevada National Park. Caracas, the capital, is to the north.

Facts:

  • 23 State country
  • Caracas is it’s capital and largest city
  • Population of about 30,912,302 (July 2016 est.)
  • Largest oil reserve in the world
  • Oil based economy
  • South America’s fifth largest economy
  • NicolásMaduro was elected in 2013 after the death of Hugo Chavez (1999-2013).
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Deviations:

  • External debt crisis in 1980  was due to the oil glut
  • Poverty rate rose to 66% in 1995 and inflation peaked at 100% in 1996
  • Oilprice recovery in the early 2000s was not well-managed
  • Rising shortages of milk,flour, and other necessities in Feb. 2013 led to currency devaluation
  • Venezuela entered an economic recession in 2014
  • Recorded the world’s highest inflation rate with the rate surpassing 100% in 2015
  • President Maduro declared a state of economic emergency in July 22, 2016 decree
  • 15% of Venezuelans are eating “food waste discarded by commercial establishments” (“Diario Las Américas” )
  • 40 inmates dismembered and consumed three fellow inmates (Táchira Detention Center)

Present Challenges:

  • Medicine and Food shortages
  • Massive inflation
  • Failed Government policies
  • Collapse in oil price and huge decline in oil production
  • Rising crime and corruption rates
  • Negative growth rate

Bottom Line:

Even if oil prices increase, the situation is very complicated for Venezuela’s economy. PDVSA (state-owned oil and natural gas company) has no cash, it is struggling to pay its debts and the oil industry needs huge investments to keep oil production from falling further.

What do you think should be the solution for Venezuela?

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