America has recently imposed its first economic penalties against Venezuela, hoping to starve their government of any cash and set President Nicolás Maduro straight.
Venezuela’s economic situation has become dire; from people waiting in 13 hour long lines for food to paying upwards of $500 in American dollars for a bag of groceries from the government. But of course this wasn’t always the case.
Venezuela’s economy is rooted in their oil and import based goods, when oil prices drop, so does wealth production and the economy. Venezuela is facing the worst economic crisis in its history and the lowest oil production – only 2.5 million barrels a day – in 23 years. A country can have a high amount of viable resources and still be poor. “According to OPEC’s 2015 figures, Venezuela has the most proven crude oil reserves in the world, with over 300 billion barrels. That puts it ahead of Saudi Arabia (266 billion barrels), Iran (158 billion barrels) and Iraq (142 billion barrels).” But since half of Venezuela’s revenue comes from oil, when the prices drop the GDP began to drop as well.
The economy dropping could have been handled, if the government could handle it.
Venezuela has not had much luck with presidents. Both Chavez and his successor Maduro have found ways to profit off the oil. The incredulous and unfathomable amounts of money generated through the drilling and production; are capable of making one go mad with grees. Mad enough to fire personnel and only focus on taking care of yourself and your friends; leaving your country and fellow citizens behind.
International Monetary Fund thinks is going to shrink 8 percent and have 720 percent inflation this year. Venezuela also holds the second highest murder rate in the world, and the “Chavista” regime is threatening to take out their corrupt president.
Press Secretary Sarah Huckabee Sanders said in a statement “In an effort to preserve itself, the Maduro dictatorship rewards and enriches corrupt officials in the government’s security apparatus by burdening future generations of Venezuelans with massively expensive debts”.
Other countries are aware of Venezuela’s corruption as well. America is not the only country to try and cut ties. America has banned trades with Venezuela and issued other sanctions like “A 30-day wind-down” period in which certain Venezuelan debt trades will be allowed. Exemptions will also be made for financing oil exports and imports and transactions involving PDVSA’s U.S. unit, Citgo, or its subsidiaries.”
These sanctions should help and see results in the future, but right now the people of Venezuela are angry. Rioting has been occurring for months, with the main ralying cry being the call for an exit of President Maduro. Molotov cocktails and rocks are thrown, stores are looted, law enforcement is involved and deaths occur. In May; after eight weeks of protesting, 56 were counted as dead. A recent survey found that as many as 70 per cent of Venezuelans want to see Mr Maduro removed from power as he increasingly relies on military support to cling onto power. Venezuela is supposed to see an election, but Maduro has turned the country into a dictatorship. And all his friends are leaving him. The ones he had in the courts system like Venezuela’s chief prosecutor Luisa Ortega Diáz, or in the military like former general Miguel Rodríguez Torres.
As Maduro’s power and ties fall apart, so does the country. It is hard to see what future Venezuela has. In order to thrive, the country must move past the entrapment of its current state and embrace a future that caters for its entire people, not just a select few.
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