Venezuela 's Economic And Social Development Essay

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Venezuela has the world’s largest oil reserves and by 1960, it became the wealthiest country in Latin America. Petróleos de Venezuela (PDVSA), the state owned company, was the key to economic and social development in Venezuela under president Hugo Chavez. His government was settled in an environment where the oil prices were rising and the economy was booming, so he was able fund social programs and practices that were popular to the poor masses. This wealthy and growing Venezuela made Chavez to be very popular and his regime very powerful. Oil revenue accounted for nearly 90% of exports, more than 50% of government revenue, and 35% of country’s GDP. However, it does not take an expert to draw the conclusion that Venezuela revenue is extremely volatile and economy situation directly dependent on the price of the oil barrels. The revenue generated by oil exports is the main source of foreign exchange, which is used in turn to import many food and consumer goods, as well as intermediate inputs for production. Venezuela is also heavily dependent on imports of goods such as raw materials, machinery, electronics, and food. In 2003, Chavez government started intervening in the currency control, introducing foreign exchange controls that varied between multiple or single exchange rates. When currency control was introduced, a dollar bought 1.6 bolivars; while today, the same dollar can buy 172 bolivars at one of the government 's exchange rates. The decline of oil prices and
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