Synopsis
Venezuela has been suffering through an economic crisis since 2010. It was caused under the presidency of Hugo Chavez. The crisis was predominantly caused by the fall in oil prices, but there is a multitude of internal and external factors involved in this crisis. Since 2014, Venezuelan economy has been officially in recession.
Venezuela’s History
Venezuela was colonised by Spain in the 16th century. A part of Venezuela became independent in 1811. Later in 1830, Venezuela was separated from The Republic of Gran Colombia.
The 2010 Economic Crisis
The crisis began under the Presidency of Hugo Chavez on June 2, 2010, when he declared an economic war due to growing shortage. The major causes of the crisis was his policies. In 2013, Nicolas Maduro was elected as Venezuela’s President, under whom the country faced many difficulties due to high inflation and a huge shortage of goods. In 2014-15, these difficulties led to protests.
In 2014, Venezuela’s economy entered a recession with its economy contracting by 4.8%,4.9% and 2.3% in the three quarters. Also in 2014, oil prices started dropping drastically, which resulted in a drop in Venezuela’s oil production in 2015, and there was over 100% inflation. In 2016, Venezuela’s economy shrank by 16.5%. Next year, the economy further shrank 13.2%. Malnutrition, hunger and poverty increased in 2017. Critics blamed Venezuela on corruption and the politics and mismanagement of the government.
In August 2018, Venezuela’s currency was devaluated and it did not help to revive its economy. In 2018, 90% of Venezuela’s population was in poverty. It was estimated that 96% of Venezuela’s population was in poverty and 70% of Venezuela’s population was in extreme poverty. In 2020, due to these reasons, about six million people fled the country.
It is estimated that Venezuela required about $760 million as total aid due to the Covid-19 pandemic, yet, it only received $140 million. In short, Venezuela is suffering from the worst economic crisis, humanitarian crisis and food shortage.
Opinion
Nicolas Maduro should be impeached as he hasn’t been able to improve Venezuela’s economy and under his Presidency, the situation has only gotten worse. Maduro should make friendly relations with the UN and ask for help. As through this act, the UN will surely help and improve Venezuela’s condition.
Also, if the UN helps and provides money to Venezuela, Maduro should import required goods in large volumes to ensure deflation. Through this act, the condition of Venezuela’s population will improve.