Informative Essay On The Avva Crisis

Decent Essays

Venezuela owes foreign creditors approximately $120 billion, and must pay $7 billion this year. It is likely they will default.
Large amounts of spending, mismanaged funds, government infighting and drastically decreased oil prices are what led to the crisis.
Venezuelan citizens are paying a drastic price for government mismanagement, as food is scarce, electricity is rationed, the healthcare system has collapsed and now forced labor is being implemented.

Hello! Thank you for choosing Wonder. I am happy to give you background and information on the current Venezuela crisis. In order to give you comprehensive information, I researched several news sites, like the New York Times, the Associated Press (AP), CNN, The Washington Post, and Al Jazeera to fully understand the situation and the results of the crisis.

Venezuela's government owes foreign creditors approximately $120 billion, and must pay at least $7 billion this year. There is a high chance that Venezuela will default on payment either this year or next.

While Venezuela could default on its payments and try to negotiate more favorable terms, that could actually have worse consequences for the country. Venezuela looks to Argentina as an example: when Argentina defaulted in 2001, it took more than a decade to work through litigation. Venezuela is in a similar situation in that part of the country's foreign debt is owed by PDVSA, a state-owned oil company that is also the biggest

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