Even oil couldn’t help Venezuela’s economy

Venezuela

Venezuela is struggling to maintain a healthy economy as the considered rich country has currently been running out of resources.

GDP growth per capita of Venezuela between the years 1900 to 1920 grew about 1.8 percent. On the 1960’s till the 1970’s, the Venezuelan government was able to preserve its economy by impartially investing huge amounts on public programs.

They’re president Nicolas Maduro ordered an increase in the minimum wage with more than 65 percent in monthly income. He also announced a fresh assembly that has the power to alter the constitution. This gave countries Argentina and Chile the thought on supporting the Venezuelan opposition to hold a vote to impeach Maduro.

How it started to collapse

As of now, Venezuelans are continuously rallying on the idea that they’re country has high inflation and brimming with debts. The government has a shortage in money as the country only has $10.4 billion of foreign reserves left and has an estimated $7.2 billion of debt, according to the Central Bank of Venezuela.

The country has been the weakest in terms of gross domestic product (GDP) growth per capita despite it being the biggest oil reserve in the world. It holds as much as 298 billion barrels of oil reserves. Oil prices already made history before by touching a high of $100 per barrel amidst the presidency of Hugo Chaves. The government are also utilizing oil money for its imports.

However also during his term, food and medicine prices were reduced. They may be low-priced for the people but it came below the production costs. This made Chaves to prevent people on changing international currencies into U.S. dollars. The main reason behind this is Venezuelans are choosing dollars instead of its currency bolivar. The government is maintaining a trade of 710 bolivars a dollar, but the black market rate has been higher and it came in at 4,283 bolivars per U.S. dollar.

It wasn’t that bad

The government in Venezuela hasn’t displayed any official economic figures ever since 2014, which makes it hard to keep on track, but despite the signs that the Venezuelan economy seems to collapse, it manages to be a prosperous country.