Can Venezuela Move Beyond Crisis?
Can Venezuela Move Beyond Crisis?
Venezuela is suffering chronic shortages of food and medicine—something that is also the result of past policies that discouraged production, comments AS/COA’s Eric Farnsworth.
What is the current situation?
Venezuela is a “mono-product economy,” relying on oil and gas for 95 percent of its export revenue. The crash in the price of oil – from more than $100 per barrel in 2014 to a low of about $30 per barrel earlier this year – has thus deeply affected the country’s ability to finance imports.
This led to the world’s highest inflation rate in 2015 – about 275 percent – and the International Monetary Fund is predicting it will surpass 1,600 percent next year. For those living in Venezuela, that means a life dominated by “standing in ... lines, waiting for basic commodities – if they’re even there,” says Eric Farnsworth, vice president of the Council of the Americas, who is based in Washington. The country is suffering chronic shortages of food and medicine – something that is also the result of past policies that discouraged production….
… Still, the country holds much promise: It has the world’s largest proven oil reserves, and its population is well educated. With these resources, and a shift in policies, its prospects could change, although probably not overnight.
