Venezuela is experiencing the worst economic crisis in its history. According to IMF figure, the countrys growth rate is -8% and the unemployment rate stand at 20%, and the figure is expected to become worse in the next few days. A good number of citizens are going without food in a nation that is rich in oil resources. Hungry and angry mobs are ransacking the three-quarter supermarkets. This has forced the government to declare a state of emergency as it embarks on rationing basic commodities and distribution of is done armed guard. The distributed food is not even enough, and citizens are forced to queue for the hour to receive the little they can get (Hetlad).
Currently, Venezuela is split between to group. The first group is that which oppose the current regime led by President Nicolas Maduro and the second gropu is Chavistas, the name given to followers of the late president. There is unrest in Venezuela as criminal activities a shadow of hunger continues to threaten Maduros administration. The opposition is trying to collect signature with the aim of pushing for the referendum, but this has remained a challenged as the electoral system rejected more than 600,000 signatures and it believed that Maduro is behind this. The changing oil prices are causing are causing chaos in Venezuela as this have deteriorated up to the point that the government offices are opened two days a week to save electricity. Protest are everywhere and almost every, security personnel do clash on streets as they demand the current government to save the situation or call for the referendum (Hetlad). The is at lock heads with the government even as the government continues to frustrate The opposition is demanding four key issues to be done and they include; holding the general election this year, creation of humanitarian channel to allow essential commodities such as medicine to be imported to the counter, removal of the supreme court justices and release of political prisoners.
The relationship between the government and the opposition has heightened the tension between the administration and the opposition something that has led to increased street protest. On 29th March, the Supreme Court stripped off the powers of the opposition in the national assembly. Even though the Supreme Court reversed the ruling the damage had already been done. The rivalry became intense after the same supreme court barred Mr. Capriles , the leader of the opposition from vying any political seat until 2032. Mr. Caprile is Maduro's major competitor as he beat him with a small margin in 2013 general election (Robins).
The current Venezuela economy can be regarded as a hyperinflation economy. The government and international monetary funds have put the rate of inflation at 400% in the last one year, and this is expected to worsen up to 700% by 2018. According to IMF. The country has experienced low economic growth for the last three years for instance, in 2014, the economic growth rate stood at 1.4%, - 3.8 in the year 2015 and -6-7 in the year 2016. This is worse as the rate of inflation is estimated to be -10.2%. The country has experienced a 35 percent drop in import this year, and this represents a 50% drop since 2013. Essential commodities such as medicine, food are no coming in the country with an estimated 75% scarcity index. The state had relied on oil for many years and after fall of oil prices in 2015 led to a drop in oil-export income, worsening the already shortage of dollars in the economy. Also, corruption is rampant in both public and private sector, and billions of money have been siphoned from the already dead economy, and this has worsened the situation further. The current governments financial woes-international reserve is below 12 billion, and this is the lowest level ever in a period of 20 years(Robins).
Some factors have contributed to the current economic crisis being experienced at the moment. The death of Venezuela president in 2013 was a major blow to the country as his successor Mr. Maduro has failed to inspire the country the same way as his predecessor did.
Also, his administration was hampered by falling prices in 2015. Oil accounts for 95% of the countys export revenue and the government used to finance various government generous social program which, according to official figures, provided more than one million poor people in the country with homes (Robins).
Furthermore, the money that the government has gained from oil have not been spent on productive domestic sectors. As such, Venezuela has relied on imports since it has money to do so, however, when the oil revenue dropped, the government had no money to import, at the same time, the economy is unproductive to keep the economy running. The leadership has done less in investing in the domestic apparatus, and this depleted the ability of the country to be self-sustaining. At the moment, some transactions in the economy are low, and the people have no source of income, the only thing they can depend on is the help from the broke government.
Excess socialism has also contributed to the current Venezuela crisis. The country has depended with only the ruling party (United Socialist Party of Venezuela) for years. The part has on various occasions affirmed at the polls, and have emerged victorious in twelve primary elections out of fifteen in the last 17 years. The action of the government has on various occasions criticized for its interference with the judiciary independence. The Court and the National Electoral Council are frustrating the referendum process in Venezuela that will see the current president leave power to pave the way for the new government. The current wrangles between the opposition and the government are contributing to already worsen the economy. The president has focused on how to fight and remain in power and focused less on restoring the economy. As wrangles persist, more money is being siphoned from the government yet Maduro has done less in reducing the increased corruption. The transparency international recently named Venezuela as the ninth most corrupt country in the world. Key allies to Maduro including his family members have been connected to drug trafficking, and hundreds of billion dollars are believed to have been siphoned from the ailing economy (Robins).
Also, lack of food is attributed to the existence of the black market in the country. As the government try to ration basic foodstuffs and set their prices, the entire commodity disappears to the black market and retail at higher prices. There are claims from the opposition that Maduro is behind the black market industry. They claim that the direct food distribution has been politicized by being through local committees run by the current regime. The situation is even yet to become worse. Maduro and his government are running through the gold reserve of the country with the aim of clearing international debt service so that it can finance primary imports. However, the reserves are now getting finished, and the government will have to resolve on stopping to import food, and this is a catastrophic move (BBC).
The current situation in Venezuela remains complicated, and the even opposition is not sure if it will resolve the crisis if it clinches power in the next general election. However, the first thin that should be done first is to remove the current regime first and focus on what opposition are intending to do. Officially, the opposition wants the referendum to be held this year as 2019 general election appears to be far. The first exercise of collecting signatures received a major blow after 600,000 signature were rejected and hence the number failed to meet the required threshold of initiating a referendum. There are rumors that the opposition leaders want to take power as possible as the next several years appears to be difficulty regardless of who is the office. At the same time, there is little evidence that opposition will prove capable than Maduro's government. However, all is no gone for Venezuela, and opposition should be given a chance to lay a foundation of a healthy economy and at the same time, try to restore the economy back. This might take years, but the good thing is that as long as the proper measure are put in place, we expect a prosperous Venezuela economy (BBC).
Hetlad, Gabriel. "Why Is Venezuela In Crisis? The Nation. N.p., 2016. Web. 29 Apr. 2016.
Robins, Nick. "What's Behind The Economic Chaos In Venezuela"? The Huffington Post. N.p., 2017. Web. 29 Apr. 2017.
"Venezuela Crisis: What Is Behind The Turmoil? - BBC News". BBC News. N.p., 2017. Web. 29 Apr. 2017.
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