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Venezuela‘s economy essay
Venezuela‘s economy essay
Impact of oil on the economy
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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, changing global markets, and social challenges.
Accounting for 90 percent of export earnings, about 50 percent of federal budget revenues, and around 30 percent of GDP, oil has had quite a substantial impact on Venezuela’s economy. This is no surprise, considering Venezuela has the largest oil reserves outside of the Middle East. From 1929 to 1970, Venezuela was the world’s largest exporter of petroleum. Out of this, about 54 percent was exported to the United States. With all the success the oil industry brought, the government wanted to increase their control and in 1975 the oil industry was nationalized. PDVSA, the holding company for four major petroleum-producing members, was created in 1977 as a result of the new nationalized oil industry. During the 1980s, fluxuating oil prices and Venezuela’s deteriorating internal financial situation triggered the seizure of 6 billion dollars of oil company earnings to help offset the debt problems. This action virtually eliminated the sovereignt...
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...ing greater attempts to address and resolve these issues, they still have a great impact on Venezuela’s economy.
From 1960 until 2008, Venezuela’s GDP has increased overall as shown by Figure 4. This increase can be used to measure the general standard of living in the country. Major improvements in Venezuela’s economy have allowed them to diversify many of their industries. However, the economic potential of this country is still hindered by political instability, changing global markets, and social challenges. With an effective stimulus package implemented within the next few years, the economy of Venezuela may still see some major improvements. Even this though will not help solve the distrust Venezuela has created throughout the world in an attempt to attain a better economic system. That is something that can only be solved by the generations to come.
Healthcare is one of the main pillars of development that hold a country in great position. The aim of every healthcare organization is to provide quality medical care to all human beings right from infants to old generation (Koutsogeorgou, 2014). Usually, this is achieved by having adequate medicine, competent and enough medical staffs, sufficient medical centers or hospitals as well as efficient and effective medical equipment. Besides, the government also plays a vital role in ensuring that every citizen gets the best medical care as a means of reducing high mortality rates that affect their people. However, many of these health facilities face many challenges and instead of keeping death rates low, the reverse happens. Lately, hospitals in Venezuela have been underperforming, and this has been characterized by increased infant mortality as well as lack of medicine in those hospitals, a factor that has contributed much to the current crisis facing the country. Based on the background mentioned above, the purpose of this paper is to evaluate what has contributed to the crisis, how is has happened, and the possible recommendation or course of action that can be undertaken to correct the situation.
People need oil for daily life and work. Since World War II, oil had caused many serious problems in United States and throughout the world. Remarkably, economic and social problems were heightened by the emerging energy crisis. By 1974, the United States gained a third of its oil by importing from the Middle East.[ James Oakes, et al. Of The People: A History Of The United States (Oxford University Press, 2011), 881.] When the heavy war between Israel and Arabia erupted, the United States was not able to gain enough petroleum because it supported Israel. To show the dissatisfaction with the United States’ support to Israel, Arab members of the Organization of Petroleum Exporting Countries even raised oil prices. “Overnight, OPEC raised the price of its oil from $3 to $5.11/By ”[ Merrill, Karen R.. The oil crisis of 1973-1974: a brief history with documents. Boston: Bedford/St. Martin's, 2007, 22.] Not surprisingly, the United States was strongly affected by the oil shortage and the the high price of oil. Homes and businesses could not easily solve the serious problem. Drastic protests occurred in many states such as Arkansas, New York, and Florida because a huge number of drivers could not accept the high price of gasoline.[ Merrill, Karen R.. The oil crisis of 1973-1974: a brief history with documents, 1.] Transportation was decreased in order to use less oil. Faced to the great challenge, several presidents analyzed the seriousness about the oil crisis and provided effective ways of reducing the use of oil.
Interesting processes and historical figures appear before our eyes, with similarities and differences that can give much to talk about, as in the case of the Cuban Revolution and its main figure Commander Fidel Castro, and the Venezuelan process that came to power exactly 40 years after the triumph of the Cuban revolution, when Lieutenant Colonel Hugo Chavez became president of Venezuela who was the head of the Bolivarian Revolution. The long relationship between Cuba and Venezuela and particularly among their leaders have triggered a number of similarities and differences found in the ways they manage the power and also in their social and political ideals.
Honduras’ macroeconomic profile is expected to improve during 2015-16, as a positive external environment supports critical efforts to strengthen the country’s fiscal position and boost economic growth. Table 5.1 presents Honduras’ medium-term macroeconomic outlook. Growth is expected to recover during 2015-18, with all major sectors contributing. The ongoing recovery in coffee production combined with rising yields for other export-oriented crops will bolster the agricultural sector, while continued growth in manufacturing and construction will have an especially positive impact on employment indicators. Increasing investment will boost the credit supply as the financial sector remains solvent, while expanding internet and telecommunications infrastructure will spur growth in services. Finally, lower oil prices are expected to help reduce the current-account deficit. However, this forecast rests on the assumption that current fiscal consolidation efforts will continue to be implemented as part of a broader program of governance reforms, and that past progress will be maintained. Consequently, a sustained political commitment to the reform agenda is critical to the positive outlook presented
Glusing, Jens. "Venezuela President Maduro Faces Economic Distress and Protests." SPIEGEL ONLINE. Der Spiegel, 26 Feb. 2014. Web. 28 Mar. 2014.
“Capitalism is a world system. But some of its parts have more than their share of leadership.”(Cardoso xxi). Latin America, like much of the third and second world has received far lesser dividends from the fruits of capitalism. In fact due to its close geographic location to the united states and its strong early history of colonialism Latin America is a shining example of how economic dependency has evolved. From its moment liberation Latin America has been seen as a economic tool by the west, particularly by the USA, and continues to be economically dominated to this day. From the Eve of conquest the region has used its economic power mostly to the benefit of another nation.
From 1806 to 1826 most of the Latin countries under Spanish rule fought for their independence. The reason that caused these countries to have courage to fight for independence was because in 1808 Napoleon was able to invade and conquer Spain. Examples of those countries are Venezuela and Chile. There are similarities in the ways in which these two countries fought for their independence but there are also some differences in how they fought. Some of the leaders who were involved in the Venezuela’s fight for independence were Simon Bolivar, Francisco de Miranda and Antonio José de Sucre. The Venezuelan fight for independence against the Spanish empire began in 1811 and finally ended in 1823. The Venezuelan war was done in different phases, which began with Francisco de Miranda.
Venezuela was one of the richest countries that emerged from the collapse of Gran Colombia in 1830 (the others being Colombia and Ecuador). For most of the first half of the 20th century, Venezuela was ruled by generally benevolent military strongmen, who promoted the oil industry and allowed for some social reforms. Democratically elected governments have held sway since 1959. Current concerns include: a polarized political environment, a politicized military, drug-related violence along the Colombian border, increasing internal drug consumption, overdependence on the petroleum industry with its price fluctuations, and irresponsible mining operations that are endangering the rain forest and indigenous peoples.
Hugo Chavez was a powerful and positive force in addressing social issues, however, his singular focus on social issues at the expense of other matters of the country left the Venezuelan economy in tatters. In 1998, 50.4% of the Venezuelan population was living below the poverty line, where as in 2006 the numbers dropped to 36.3% (Chavez leaves). Although he aggressively confronted the issue of poverty in Venezuela, many other problems were worsened. Some Chavez critics say he used the state oil company like a piggy bank for projects: funding homes, and healthcare while neglecting oil infrastructure and production. Without growth in the oil ind...
Throughout the fourteen years that remained in power Chávez followed strategy of introducing a socialist government in Venezuela in stages. According to Enrique Standish in the article titled “Venezuela Finally Turns Communist” it happened in four stages. The first stage consisted of obtaining t...
What is one of the biggest problems in Latin America today? Is it the slums that some people live in or the way poor people are treated? Both these ideas connect to Latin America’s largest problem today, the major income gap between the rich and the poor. When people think of Latin America in modern day some will think of the rich citizens who live prosperous lives, but many of them also think of the poor folk who live in slums such like the favelas of Rio. This might not seem like such a big issue to us, but for the people of Latin America this could not only affect their economy, but their politics as well.
The Kingdom of Saudi Arabia is a petrostate. It is a petrostate in the sense that the oil sector dominates the national economy and international exports. (Colgan 226) This is due to Saudi Arabia’s one crop economy, oil. (Ali 100) Oil accounts for 70-80% of the state revenue as well as roughly 95% of export revenues. Before the discovery of oil in the 1930s, the economy rested on Islamic pilgrims. Containing the Grand Mosque, Al-Masjid al-Haram, Saudi Arabia gets a large influx of believers every year for the Hajj, one of the Five Pillars of Islam. During this time of year, income was made by food and shelter sold to the travelers. This was enough to support the state, but not enough to make it the monetary power it is today. What allowed for Saudi Arabia’s climb in the world economic ladder was oil. Oil has been a valuable industrial resource since the beginning of World War 1. Since then the demand for oil has progressively become higher and higher amongst industrial nations, allowing for oil rich states to receive large amounts of affluence. Among these oil rich states is Saudi Arabia, the region with the highest capacity for oil production out of the entire Middle East. From their remarkably high oil production, Saudi Arabia was able to gain considerable amounts of wealth and political significance. Oil in Saudi Arabia politically affected the Saudi government in both their foreign and domestic policy by providing economic power, the ability to fund wars, the ability to use economic diplomacy.
... to do. There have been unnecessary killings and beatings and now the country is trying out keep the rest of the world uneducated about the affair. The concern of the Venezuelan citizens is less of a concern. This shows "how people define security is defined by the historical and national conflict" (Smallman and Brown 36). Policies and intuitions on handling security are changing everyday.
This new tier was designed in hopes to close the gab between official and black-market trading, a problem Venezuela has been battling for decades. Having such a high differential between the official and unofficial exchange rate has caused many problems for Venezuela, two of the biggest being inflation and scarcity of goods. As of January of this year, inflation rates rose to nearly 56% and the scarcity index reached an all-time high of 28%; which because the exchange rate is fixed, economist claim this will only serve to perpetuate these problems. (INSERT CITATION). That being said, having just started in March, it is still too early for any real in-depth analysis on this new exchange system. Until an adequate amount of time has passed, the world will not know whether or not this exchange system can support itself and, ultimately, Venezuela.
Though the issue of how do you handle land reform without it being forced redistribution or legal plunder should be on people’s minds. Venezuela is such a country where such acts are currently taking place where the small number of massive land owners is not within the “i...