September 17, 2018
Venezuela: Economic Crisis
Venezuela is a country located on the northern coast of South America. The country consists of the continental mainland and many islands in the Caribbean Sea. In 1999 Venezuela took on the name the Bolivarian Republic of Venezuela. Venezuela finally got on its economic feet with the discovery of oil in the 1900’s. Unfortunately, most of the country’s wealth remained with the higher class citizens. Venezuela is an extremely beautiful country, but crisis has always been the norm for them.
By the mid-1970’s Venezuela had saw wealth pour into their country as a result of the oil boom. Then by the 1980’s, oil prices dropped and once again the country was thrown into crisis. Ever since, Venezuela has had the largest oil output in the world, but recently, as of October 2017, they have dropped to their lowest output in 28 years. “Venezuela depends on the oil trade to provide over 90 percent of its government revenues” (Calcuttawala). After the government revenues are collected, the money is distributed into social welfare programs and imports of goods from other countries. These social welfare programs are the way many citizens live. While Chavez was in power, the programs began to improve and opened many opportunities for the less fortunate.
Hugo Chavez ruled the country from 1998 until his death in 2013. His plan when he became president was to make Venezuela a communist country to distribute the wealth amongst the people. During his time as president, where he led as a dictator, Hugo Chavez sold oil to Cuba and refused to stop the drug trafficking in Colombia, thus leading to a strained relationship between Venezuela and the United States of America. Proceeding the death of Hugo Chavez, Nicolás Maduro took the position as president. As soon as Nicolás took office, he elected 545 members to redo the constitution to enhance his authority and better his chances of following through with Hugo’s plan. Although his plan was to make the country a communist country, it ended up becoming a socialist country. Maduro and his Socialist Party have presided over the worst economic depression Venezuela has ever been in. For this country to be successful, they will need a good leader in office to move them into the direction of prosperity.
A Venezuelan dollar (bsf) is worth less than an American penny. Due to the new currency exchange rate, citizens have to turn to purchasing household necessities through the black market. Even though Venezuela’s government has altered their exchange rate many times over the years, they can’t keep up with the low rates of essentials on the black market. In 2016, Venezuela’s inflation rate reached 800 percent. According to a forecast done by the International Monetary Fund, the inflation rate would reach “1,600 percent in 2017” (Imbert). “Just to purchase one kilogram of rice, one kilogram of sugar, and a pack of Oreos it costed my parents 330,000 bsf, they are considered the higher class, yet they are still struggling” (Peña). Just to put into perspective, Juan Peña’s family is considered wealthy in Venezuela, his father is an engineer and makes a good paycheck and his mother is in the medical field, therefore they should be making decently enough money to stay alive. But, they are still struggling to pay for enough food to feed their family.
On top of all of the bad things happening, there are children and adults starving. Because of the prices being so high, even moderately wealthy families are struggling to pay for groceries. Even with all the hardships happening in the country, Venezuela has some of the nicest, most caring, happy people you will ever meet. In the darkest of times, they have come together to try to save their beautiful country. Among the streets in Venezuela, everyday loyal citizens gather in protest of their government. They are doing everything they can possibly do to save their homes and their families from the major government corruption. The country is extremely beautiful and could very easily be a tourist attraction because of its mass landscape beauty, crystal clear waters, and white sand beaches. Venezuela is also considered one of the most megadiverse countries in the world. But, because of the hardships, people are not interested in going there.
Harnecker, Marta. “Basic Facts on Venezuela.” Venezuelanalysis.com, Ellner Steve, 9 Sept.
Calcuttawala, Zainab. “Venezuela Oil Output Drops To Lowest In 28 Years.” Oilprice.com, 14
Imbert, Fred. “Venezuela announces a new exchange rate — but this one probably won’t help,
either.” cnbc.com, 28 March 2017, https://www.cnbc.com/2017/03/28/venezuelan-just-announced-a-new-currency-rate–and-nobody-cares.html
Pena, Juan. telephone interview. 22 Nov. 2017.