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Venezuela is presently undergoing a tumultuous time- its economy and society are facing an unprecedented collapse, and political instability is threatening to undermine its democracy. The crisis that is ongoing in the country, which dates back to early 2013, has resulted in a shortage of goods and services, skyrocketing inflation, food and medicine shortages, and a high crime rate, among other things.
The Causes of the Crisis
The root causes of the crisis are diverse. Central to this problem is the fact that Venezuela is highly dependent on oil revenues. The country has the largest oil reserves in the world, and oil accounts for about 95% of the country’s exports and 25% of its GDP. Since the oil boom of the 20th century, successive governments have come to rely almost entirely on this resource to finance national development projects. However, following a global drop in oil prices that began in 2014, Venezuela’s oil-driven economy suffered greatly. The country’s oil sales declined by up to 50%, and so did its revenue. At the same time, the government continued to pursue expansive spending, increasing the debt level and creating an inflation spike that was noted to be one of the highest in Latin American history.
Impacts of the Crisis
The crisis has heavily impacted the country’s economy, healthcare system, and day-to-day life. Due to the inflation, essential goods, such as food and medicine, have become scarce and unaffordable. This has led to rationing, hoarding, and price gouging by businesses and middlemen. The healthcare system has broken down with a lack of medicine, equipment, and facilities. Furthermore, increased crime rates and political instability have made everyday life difficult and dangerous for citizens, leading to an exodus of people from the country to seek better opportunities elsewhere.
The crisis in Venezuela is a complex issue that requires a multifaceted approach and international support to solve. The country’s government must review its economic and political policies to tackle corruption, promote investment, and restore economic stability. In the meantime, foreign support and guidance can help rebuild the shattered sectors of the Venezuelan economy. Ultimately, this crisis is something that affects the entire globe. Without international intervention, the breakdown of Venezuela’s institutions and society will impact the entirety of South America and beyond.