Venezuela's Oil Crisis

When Christopher Columbus discovered the coast of Venezuela, he thought he had encountered an earthly paradise, today that grace land is ravaged by famine, inflation, scarcity, violence, social and political conflicts; “social implosion [being] driven by economic collapse, caused by shockingly self-destructive policy making” (Toro, 1). Venezuela’s antidemocratic government and its lack of foresight has created a severe economic crisis crumbling health care system and a lack of basic necessities and is jailing innocent people who object.

Would you really want to be responsible for destroying the animals home and the environment? The United States has a huge debate whether or not We should drill for oil in Alaska’s wilderness. But the answer seems pretty clear to me because it is not essential for our economy ,it is not valuable for the environment, and it is causing a social disruption. In the background essay, it says that many colonies We're not concerned about protecting our natural resources because they thought they had enough natural resources to last forever; But We don't, We are limited and some day in the not too distant future we may run out of natural resources so we have to circumspect and start protecting it by using other materials such

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)

Venezuela’s reputation has been well established regarding its supply of oil and how it was being used for medicinal use and other purposes. It was not until the first oil well was drilled in 1912, when Venezuela became the world’s second largest oil producer behind the US, and the world’s largest oil exporter (Wilpert, 2003). With the well drill in the country it attracted many major oil producers that wanted a piece of anything they could get. The Royal Dutch Shell and Rockefeller’s Standard Oil became the main producers of the oil and maintained a high status. Everything was going great for the company, “ between 1920 and 1935 oil share’s exports went up from 1.9% to 91.2%”(Wilpert, 2003), but not everything goes according to plan. The country had a dramatic impact towards its economy that many recall, “The Dutch Disease.” “The utmost important magnitude of the Dutch Disease was that agricultural production declined to almost nothing and the country fell behind in industrializing, relative to other Latin American countries” (Wilpert, 2003). Thus, Venezuela had passed a reform oil policy that was the Hydrocarbons Act, which was from the oil revenues based on the income of the mines (Wilpert, 2003), bringing the state’s income to stability.

“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

So far 13 airlines have stopped or slowed their service to Venezuela. Urbanization came as a big rush to Venezuela, and that brought along many small pop-up towns known as ranchos that are extremely poor and often have little to no hygiene, electricity, fresh water, or many basic human needs. These little villages are especially prone to natural disasters, and there have been many occasions where an entire village was destroyed because it was built on a cliff that had a mudslide. On the bright side, Venezuela is urbanizing very quickly and while most of the cities are overcrowded, that just means more people not living in small little huts.

An example of intervention is when the U.S. attempted to mediate the Venezuela- Great Britain dispute in 1895. Great Britain and Venezuela was disputing about who should get the gold. The U.S. intervened to try and stop the dispute. They used the Monroe Doctrine to make sure that Great Britain couldn’t take over any more land. And that is was intervention is, a foreign country(America) getting involved with other countries matters (Great Britain and Venezuela).

The 20,000 bolivar, Venezuela’s currency, is barely worth five dollars. Banks only let citizens take out a couple ten hundred bolivars at one time. This only equates to about two to three dollars and only happen if the banks aren’t bankrupted themselves. (Gillepies and Zamora 1) Maduro continues to jail any politician and citizens who dare to stand up. Only twenty-four percent even agree with Maduro’s tactics. (Smith 3). "Even though it pretends to be a democracy, Venezuela is now a dictatorship," says Ian Vasquez, a Latin America expert at the Cato Institute in Washington, D.C. As citizens flee the country any way they can, Maduro continues to blame the US for their problems like Chavez once did.

Before the early 20th century when one considered Venezuela they thought of Venezuela’s coffee and cocoa exports, however ever since the discovery of petroleum during the early 20th century, Venezuela is one of the world’s largest exporter of oil. They are also one of the first founding members of OPEC. However Venezuela has much more to offer than oil and coffee. Currently Venezuela is rapidly expanding and becoming more stable. Compared to the countries past the economy is strong and growing every year. The most interesting thing about Venezuela is their unique infrastructure. Currently their entire economy is dependent on oil however due to the dramatic changes that have occurred in the recent decades in Venezuela the profits made from

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,

Venezuela currently has a population of 31 million people. Venezuela is still growing in numbers, and it’s getting harder for the government to provide health care for their people. Venezuela’s population is 1.9 times larger than South America. The country is mainly urban, and the wealth rate is declining. The resources per person needs to be the same, and as of now that’s not the case. Overall fertility rates are failing in Latin America. In 2015 the population was six times the size that it was in 1950, and the United Nations projects that it will be nine time larger by 2050, and still growing at that point, despite the long-term decline in fertility. (Latin America) Although there are many economic crisis in Venezuela, this isn’t preventing them from having children in higher numbers. This could be the shortage of health care.

The oil-rich Bolivarian Republic of Venezuela, located on the northern coast of South America, was for many decades considered among the wealthiest nations in the entire continent. While having the largest proven oil reserves in the world has often proved a tremendous boon for Venezuela, the very black gold that has been the cause of its success has also proven to repeatedly be its kryptonite. Over half of the nation’s Gross Domestic Product stems from petroleum exports – which equates to approximately 95% of total exports. It is really not too hard to imagine what drastic consequences shifts in global oil prices could have on the economy.

Venezuela is currently facing the worst economic crisis in history. According to the International Monetary Fund, it has negative growth of -8%, the worst in the world and the worst inflation rate (482%). The current unemployment rate is 17% though this figure is expected to climb towards 30%. Venezuela is a country that is reported to have the worlds largest oil supply, a commodity that has a changing price based on supply and demand. Their ability to sell oil was a primary source of revenue for the government. Exporting oil was reported to be around 96 percent of Venezuela's total exports according to the World Bank. In 2014 the

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.

The main purpose of the following report is to provide information about the profile of The Bolivarian Republican of Venezuela; in order to study the current situation of the country for further investigations in the future that may help to understand the opportunities and risk involve in importing and opening new markets in Venezuela.