Hugo Chávez’s regime had four inbuilt characteristics, all of which impacted how they supervised their economies. First, the ruling party conducted repeated elections, but continuously breaks the policy to guarantee satisfactory results. Secondly, the executive arm corrodes or abolishes institutions that can question its authority. Thirdly, the present government spends in a supporter’s manner: it gives funds, usually without explanation to its supporters, while denying same to its opponents. Fourth is their opposition to the industrialists. These characteristics basically explain the nation’s plunge into economic misery.
Oil and Politics in Venezuela
Photo Associated Press: Venezuela’s President Nicolas Maduro speaks during a session at the National Assembly, as a portrait of the late President Hugo Chavez stands in the background, in Caracas, Venezuela, Monday, July 6, 2015. Maduro announced Monday that Venezuela is recalling its ambassador in Guyana for consultation amid mounting tensions over their disputed border and that he is also initiating a comprehensive review of relations with the much smaller neighbor. (AP Photo/Ariana Cubillos)
Recently, Venezuela is battling a major trade and industry catastrophe that keeps on deteriorating. The nation is largely reliant on its oil exports as it has more verified oil reserves than Saudi Arabia, and exports a large portion of the oil produced. The only positivity is that subsidized gasoline sells for less than two cents a gallon in Venezuela, making it the cheapest worldwide.
The negative aspect is that virtually all other sectors of the economy are in a dilemma. Imports have been slashed, shortage of basic amenities and empty supermarkets. While there is no certified inflation rate, still nearly all estimates put it 50 percent a year or more. Economists deduce that the nation’s economic problems can be traced to the 1999-2013 Hugo Chavez era, which shunned capitalism and rather nationalized most companies.
Majority of the oil-based economies have endured from the fall in oil prices since year 2014. But Venezuela’s economy has practically buckled, devastated by what is termed RIDDS: recession, inflation, dwindling foreign reserves, debt, and shortages. Now it is undergoing one of the most brutal recessions.
The Venezuelan government claims its woes are the blunder of overseas actors and local capitalists. Some of which are Saudi Arabia’s rejection to cutting oil fabrication, the United States’ reckless ploys, circulating rumors by Wall Street speculators and the refusal of its own capitalists to sell products.
The nation’s monetary problems began way before the present slump in oil prices and the launch of Maduro’s government. The nature of the country’s regime must rather be blamed for Venezuela’s RIDD, which discouraged its leaders from adeptly supervising the oil boom, and now limiting the government’s capacity to react to the recession.
The current president, Nicolas Maduro, faces improved spells of public unrest. Pitiable financial circumstances and soaring rates of misdemeanor pose challenges for his administration. Highly restricted access to US dollars will remain and the trade atmosphere will stay hostile.
Anti-Maduro protests, which first started in February 2014, have been challenged by a relentless government action on the political resistance. Security personnel react to demonstrations with general aggression.
Venezuela could affect vital U.S. economic and provincial interests as one of the principal foreign oil suppliers to the United States and universal oil markets would possibly respond disapprovingly to the worsening of the U.S.-Venezuelan mutual trade. The U.S. is strongly interested in encouraging democratic authority as the foundation for a more established and thriving county.