The Real Reason Behind Venezuela’s Economic Peril

The economic and political crisis gripping Venezuela is the result of many factors. But, most experts like Manuel Gonzalez can agree that floundering oil prices is at the top of the list. The resulting domino effect: government offices open two days a week, rationed electricity, severe food shortages and a drought that has caused a shortage of water.
The chaos has deepened with mass riots taking place in most cities. Embattled President Nicolas Maduro is in the middle of nasty recall fight. Most of his opposition place the country’s troubles squarely on his shoulders. Maduro has been under fire from his first day in office. Although he won the majority vote, Maduro has failed to capture he popularity of his predecessor, Hugo Chavez.

As seen from Linked In‘s report on Venezuela, you live by the oil, you die by it. When oil is good, the country is flush. When oil prices drop, resources become scarce. Although the same was seen under the Chavez administration, the bottom fell out when Maduro took office.

Other things that doomed Venezuela are the heavy dependency on imports and currency control measures that were implemented in 2003.

Food shortages and closures are taking a terrible toll on the country. There is a lack of everything from food to medicine. If you are fortunate enough to have dollars, you can buy many things on the black market.

All bets are against whether Maduro can make it to 2018, the end of his term. But that doesn’t mean his Chavista government won’t.