Effects Of Hyperinflation On The Economy

In order to understand Venezuela’s current economic policies, it is important to examine the economic and political ideologies adopted by past leaders of the Bolivar state. Chavez, who was the president of Venezuela from 1993-2003, took a very anti-neoliberal approach towards the Venezuelan economy. Chavez had a strong distaste for western ideology and aimed to lessen the degree of influence that the IMF and the United States had over Venezuela; In fact, Chavez’s desire to distance Venezuela from western influence is arguably the main reason that led to Venezuela’s shift in its economic model and economic partnerships. Foreign investors from the United States planted themselves in Venezuela’s oil industry. As a result, the IMF and the United States financially benefitted where Venezuela could not. Realizing it was in a position of economic disadvantage, Venezuela distanced itself from the United States and the IMF while attempting to become more economically independent.

National socioeconomic development is one of the most pressing issues in Venezuela today. As reported by the World Bank, there are many factors to consider in order to explain this stagnation: The collapse in international oil prices and ineffective macro and microeconomic policies has lead to Venezuela’s reliance on the hydrocarbon sector (oil now accounts of 96 per cent of exports). Venezuela also faces major stagflation. Price controls, limitations on access to foreign currency, and the collapse of the private sector in the provision of basic goods have led to one of the world’s highest inflation rates. As a

Inflation doubled in 2007 and reached a peak at 28% in 2008.The fiscal make up 4-5% GDP and the trade deficit accounted for 20% GDP in which approximately $US17.5 billion dollars. The influence of high fuel combine with food prices and high domestic demand lead to high inflation. The high price of fuel in Vietnam illustrates global fuel prices and the high domestic demand of country importing fuel. Furthermore, the increase in global food prices affect detrimental to the high inflation in Vietnam.(Figure 2)

For More than two decades Brazil suffered badly from high inflation, economic decline, domestic and foreign debt. In 1993 country’s Inflation reached 30 percent a month and as a result the country wouldn’t sustain growth. After many unsuccessful plans to control the inflation, finally Real Plan of Fernando Henrique Cardoso, minister of finance, worked out and brought the inflation down to a single digit.

Venezuela, located in the Latin American region, is a country that has been characterized by its abundance of oil reserve. A natural resource that has shaped the history and development of the country, affecting its economic, social and most important is political spheres. For many years Venezuela was controlled by authoritarian regimes. The country, being very important in the sense of geo-politics due to its abundance of oil, has been a key player in the international arena and most important, to those that for many years kept the country under their regime. It was not until 1958 that Venezuela experienced the change to democracy and a stable democracy was kept between the two main political parties of the time, Accion Democratica (AD)

Issue: In Venezuela, the United Socialist Party (PSUV) has been in the power 18 years first with Chavez and them with Maduro, both elected by democratic elections. Now the country is divided into two significant groups Chavistas, people who support socialism and the actual president, and opposition, people anti-government and believe the corruption of the actual president. With this, the country is immersed in extreme violence, constants violations of humans rights and alarm power corruption. Additionally, some problems that the dictatorship produces like protests, the end of commercial relations with other countries, and the decreasing economy. The abuse of power leading to incrust the violations of humans right is the significant issue that Venezuela has to face today. This has an extended history that began in 1999, with the victory of Chavez in the name of socialism, but the break in the government started when Maduro raises in power and with the end of relations with the United States, who was the principal oil buyer. As well, the counting falling oil prices had decreased the Venezuela’s economy and limited the public inversion that the government used to do. With bad relations and an affected economy poverty, violence and discomfort with the government began. The corrupt power and constant violation of human rights are affecting in significant ways the country, particularly in the investment that the government

“Venezuela reads like a textbook example of the socialist end-game: Social implosion driven by economic collapse, caused by shockingly self-destructive policy making” (Toro 39). “Socialism of the 21st Century” in the end just did not work and had failed. The changes made to the constitution have created a government that runs inefficiently and gives the president too much power. Chavez mismanaged the country's income and caused inflation of the Bolivar Note. Chavez had good intentions, but his programs to help the impoverished failed because of poor management. These people that he was trying to help are now more hurt than they were before because money put into these programs was not used effectively. This money could have been used to invest in the oil reserves and other parts of the economy to set the country up for success. Food is hard to come by and the crime and murder rate continues to raise. The country in debt and cannot even buy imports to sell to its citizens. Venezuela will need outside help if it is to recover from the situation caused by Hugo Chavez and Nicolas Maduro. The only reason Chavez remained popular in Venezuela is because the economy was doing well in the beginning and he was able to control the media so that the public opinion of him was kept

Venezuela is a country with an exceptional history. Ever since the collapse of the Gran Colombia in 1830, Venezuela has been ruled by military leaders until mid-20th century (CIA). Since the mid-1950s, a wave of democratically elected regimes took over in which Venezuela flourished and became one of the few leading economic powers in the Latin American region (CIA). With large oil revenues funding the government, the country’s political and economic institutions became effective, and what was once a military oppressed environment was now a thriving and liberalized economy. Unfortunately, many of these institutions began to deteriorate from corruption and inexperience of officials. Also, Oil prices began to decline and the country began to

Those supporters then use their leverage, power, and wealth to secure themselves and their families. This good old boy system leads to corrupt police, an unfair and politicized judicial system and many other problems that stem from the wrong people being placed in highly influential jobs. This can all be tied into the functionalism theory of sociology, where Venezuela can be thought of as a living organism. Government is one of six core systems in sociology, and is kind of like the central nervous system to the organism. If the government is not working properly, this can affect education, which in turn may affect family dynamics. This breakdown in one system leads to strain on the other systems of the organism, and it will eventually cause the whole to fail. The people at the top, those in the government have thus far kept themselves from feeling the burden of poverty and hunger. This however is unsustainable, and if the government is not properly preforming the job it was designed to do than it would need to be replaced. Just as a living organism would adapt a new and better system to continue living, so too will Venezuela adapt a new

The division of political parties among Venezuelan citizens has caused the country to be in a state of serious political unrest. With crime at an all time high and food and supplies in shortages, Venezuelans are watching as their country slowly transforms from a democracy to a dictatorship under the presidency of Nicolás Maduro. Public protests against President Maduro have been happening for months now, and things are only escalating.

When Carlos Andres Pérez was elected president in 1988, he vowed to return the country to its former glory. So, Pérez raised domestic petroleum prices (Golinger 24). This resulted in the Caracazo, a massive violent event that left thousands of people dead (Golinger 24). Despite this unrest, Venezuela’s economy was growing at the highest rate in the Americas (Golinger 24). But, income inequalities further widened, and poverty and malnutrition became worsening issues (Golinger 24).

The history of Venezuela is a long and tumultuous one, and accurately paints the picture of a country in disarray. From it’s colonization in 1498 up until 1958, the country shuffled between a long line of military dictators. At this point, the last of them was finally overthrown,

Venezuela is a country that lacks the right to property. This gives the government freedom to take anything they want, even if it is international property or owned by a multinational country. This lack of protection for property became apparent in last April this year. The leader of Venezuela Nicolás Maduro “seized General Motors’ plant in Venezuela and effectively forced it to stop operating” (Jones). They took over a property owned by a company and they didn’t warn them or compensate them fair market value. This auto- factory made parts that were used by trucks that delivered food and supplies to stores and people in Venezuela. This tripled the cost of essential parts use to repair these trucks so it lead to a direct increase empty shelves. Venezuela is in an economic crisis so this decision by his leader, which violated the rights of individuals who owned the company. This decision not only harmed all of Venezuela's

For months, protesters have voiced their frustrations with President Nicolas Maduro by rioting on the streets. The protesters are angry because Maduro did not win a fair election and is becoming a dictator. It was obvious that Maduro would not win an election, so the Venezuelan Supreme Court, filled with government loyalists, took legislative power away from the National Assembly. Therefore, all three branches of the government were ruled by the United Socialist Party and the opposition has no power. So, Nicolas Maduro was granted power amongst the people’s rage. Even Donald Trump, the president of the United States, has spoken out against Maduro. He stated that Maduro is a not a president, but a dictator. He also emphasizes that Maduro will lose if there is an election. Additionally, money problems have fueled the protestors irritation. Venezuela is losing money by year and had only about 10.5 billion dollars at the beginning of 2016. According to a survey by CNN, 32.5% of Venezuelans reported eating two or less meals a day. This is due to inflation,

With an economy dominated by the production of oil, Venezuela has enjoyed the highest standard of living in Latin America. In spite of its success in the oil industry, agriculture and manufacturing also play important roles in Venezuela’s economy. With this in mind, it would seem as though Venezuela’s economic state has flourished. Rather, it has suffered from the effects of political influence, corruption, and poor economic management. The distribution of wealth across Venezuela has caused the elite to benefit at the cost of the working people. This is mainly due to the economic and political structure of the country. Even with the plentiful resources Venezuela possesses, it is constantly being threatened by political instability,