A Country With A Monoculture

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Adam Kott from New York University poses the question on whether oil dependency in Venezuela contributes to national instability. He begins by arguing on the economic perspective by stating “A country with a monoculture, such the case of Venezuela and oil, will experience considerable economic hardship when the price of commodity falls” (Kott, 70). He further amplifies his hypotheses through the utilization of empirical data in which demonstrates the decline in GDP growth from 2008 to 2009. Due to the boom of commodity, the price of exports had majorly increased and the price of imports had decreased and this is correlated to oil and its impact on the strength of the currency. Prices become too expensive which results in a lack of trade…show more content…
He complements each dimension with a cause of instability. The first cause of instability refers to the implications of Hugo Chavez’s hybrid regime. Naturally, hybrid regimes are very relentless to negotiation with the opposition. The piece written by Olga Correal firmly states that the implications of the Chavez Administration was to breakdown the COPEI opposition in order to maintain political dominance. This rational framework is what majorly contributed to the political instability of Venezuela. On the other hand, the economic instability refers to the result of the stagnation of the PDVSA (Petroleos de Venezuela S.A). This company as discussed in the piece contributed to the current transition from democracy to authoritarianism. Kott argues that the company was poorly managed under the Chavez Administration and that if it was taken better care of the oil revenue would be greater. Kott states that the PDVSA has had damaging impacts on Latin America and concludes by arguing that the resource curse is not essentially destabilizing Venezuela but is rather a symptom of the problem and not the cause. Therefore, this development would advocate against the hypotheses of the natural resource curse gravely impacting Venezuela. Under the Economic instability Kott disregards oil wealth as the sole
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