What are the roots of Venezuela's economic issues?

1 Answer

Answer :

At least two major causes, one of which you mentioned above. 1) maduro’s predecessor, Hugo Chavez, made the government and society into a socialist state. As any student of history knows, socialism fails. It is an unsustainable economic system that eventually falters of its own structure. Chavez was not stupid, but he was power-hungry, and he thought that an all-powerful socialist government would keep him in power. He didn’t count on getting sit and dying. Part of his socialist agenda was to expropriate industry, farmland – basically any and every means of making money in Venezuela came under government control. Well, that, in turn cause smart people to free, and businesses to close. Foreign investment in venezuela dried up because foreign companies couldn’t make any money and whatever they did make was denominated in the failing bolivar instead of dollars. That in turn led to rampant inflation since the bolivar is essentially worthless. 2) Chavez and Maduro might have survived if oil prices had stayed high. But when oil prices fell, their national income – which was supporting the socialist state – dried up. No money to buy food and no money to subsidize gas. And so on. So the socialist economy, having taken over any means of producing income and investment, and with no external means of funding (i.e. oil) fails in a spectacular way. 3) The icing on the cake is that as part of the failure of socialism, Maduro essentially turned the country into a dictatorship, taking over the parliament and trying to take over the courts.

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