The largest nation oil reserves in the world is severely affected by the fall in crude oil prices.
Hoping for a rebalancing of global market fundamentals in the coming months, using the escalating price factor, Venezuela is seeking to stem the effects of the economic crisis.
but without any success.
Already in 1999, the first year in power of Hugo Chavez, the fall of prices had caused a serious economic crisis. If the newly-elected president undertakes social reforms to fight against poverty, it has been negligent not to establish a system that would diversify the economy of a country that derives 96% of its revenue from the black gold .
so what we are seeing is that for almost two years now, with a barrel that has dropped to $ 30, the country has been plunged into a serious economic crisis that threatens to turn into chaos amidst violent clashes between opponents and supporters of the socialist government of Nicolas Maduro.
Inflation that accentuates the country’s lamaldie
the figure symbolizes the difficulties, is that of the country’s revenues, which have declined from 80 billion dollars in 2013 to 25 billion dollars in 2015 (according to estimates). The public debt is close to 60% of GDP. For months, the Venezuelan central bank (BCV) has been trying to reduce the deficit by printing money, to the point where the country now holds the world record for inflation: more than 180% in 2015, and the Fund International Monetary Fund (IMF) is counting on 700% inflation this year. Money supply is rising, and prices are going up dramatically.
The new president and follower of chavez Nicolas Maduro has announced an increase in the minimum wage of 30% to give a little oxygen to the population and to slow the escalation of social discontent. For several months, the opposition denounces the negligence of Nicolas Maduro and demands his resignation. As for the population, 68% of Venezuelans now want the president to leave his post.
Coming to power in 2013 after the death of the Chavez icon, swept away by cancer, the president clings to his seat, and hopes that crude prices rise again. But unlike his predecessor who regularly punched the table for a price increase, Maduro struggles to win in the OPEC of which the country is a member. In the meantime, he improvises.
but that it succeeds it is necessary to convince these belligerents:
- The opposition that makes all to destitute him
- OPEC, a large number of whose members are clearly opposed to venzuela and its foreign policy
but above all, the biggest challenge remains inflation, which has exceeded 2,610% in 2017. And the price increase should be just as staggering in 2018.
We must then wish NICOLAS Maduro a good chance to be reconcilied with everyone and avoid an escalation of civil war that will have a chaotic impact on Latin America.