Venezuela: economic crisis driven by foreign meddling
Venezuela’s President Nicolas Maduro is having a tough time dealing with the growing opposition, but as he believes, there is foreign interference in his country, particularly by the US.
Will he survive the greatest challenge to his presidency? And if the US is orchestrating this, what is their end game? After all, the US had coup aspirations during Chavez’s era.
To get an idea of how badly the economy has performed, let’s first take a look at the output from 1999 to 2011, and then to 2015, when the latest indicators are available. In 1999, the unemployment rate stood at 14.5%, and a decade later, that figure dropped to 7.6%.
The GDP per capita had more than doubled during that same period, from $4,1 hundred dollars to over $10 thousand dollars per person: not bad for workers working under socialist rule. In terms of inflation, however, Venezuela has struggled in this time period: Average Consumer Prices which registered a 23.6% inflation rate in 1999 had in 2012 a 31.6% rate.
That may have to do with the Currency exchange rate, which Chavez introduced in 2003 to stem capital flight. When he first introduced currency controls, one dollar bought 1.6 bolivars. And here’s the pride of the socialist system rule under Chavez: yielding a massive reduction in poverty, from a high of 23.4% in 1999 to 8.5% in 2011.
What remains to be seen if there will be moves from countries like China, a loan already in the works, to help Venezuela weather this storm out.