What's behind Venezuela's political crisis? What next for Venezuela? Back in the limelight: The man who wants to oust Maduro. Image source, Getty Images. Inflation has spiked in Venezuela, making it difficult for people to afford basic essentials.
Inflation is ridiculous. What is happening in Venezuela? What will happen next? GDP is falling. People don't have enough food Venezuelans are going hungry.
Other key findings of the study included:. Traditional meals were decreasing in size and quality Nine out of 10 people couldn't afford their daily food 8. Some Venezuelans have turned to charity for food. Oil output is on the decline. Oil output has been declining since. Many Venezuelans are leaving. Countries are split over who to support. The energy sector is only producing a fraction of the 4 million barrels of oil a day it could be producing. They also need to modernize that sector because they haven't done anything in the last decade," Gamarra said.
Besides foreign investment, Venezuela will likely need help from multinational institutions such as the World Bank, the Inter-American Development Bank and the Development Bank of Latin America in order to fund the infrastructure development. It is not rare for a South American country attempting to recover from an economic crisis to accept large loans from multinational institutions.
The U. Some major powers continue to recognize Maduro's government, such as Russia and China. Leadership negotiations are set to resume later this week, according to Carlos Vecchio, a Venezuelan diplomat representing the opposition, who spoke at the National Press Club in Washington D. Although he would not specify exactly when or where the talks would take place, he expects a resolution by the end of this year.
Current IMF managing director Christine Lagarde recently told The Economist Radio, "As soon as we are asked by the legitimate authorities of that country to come in and help, we will come in. It is going to require significant financing from all the international community.
Maduro and his predecessor Hugo Chavez have refused to provide the IMF with information it would need to perform audits. Lagarde told The Economist that she could not be specific about an aid package but added, "We will open our wallet, we will put our brain to it, and we will make sure our heart is in the right place to help the poorest and the most exposed people," she said. Back in , when Venezuela was flush with cash from years of a booming oil business, Chavez paid off all of the country's debt to the World Bank and severed ties with both it and the IMF.
Experts urge Venezuela to diversify its economy from primarily oil production in order to prevent a similar crisis in the future. Unless they diversify, they're going to go through this again. The lack of human capital is another issue Venezuela will have to address in order to recover from its economic crisis. The number of Venezuelan migrants and refugees has reached 4 million and is expected to surpass 5.
Many of those who have fled will most likely not return. They are making their living elsewhere; their children are attending college and are finally comfortable after starting from zero in a foreign land.
The idea of leaving everything behind to return to Venezuela and help rebuild the country might not be appealing. The lack of a solid professional class will be the primary issue holding Venezuela back, Farnsworth of the Council of the Americas said. Under the old system, a two-liter bottle of soda pop could cost more than 8 million bolivars — and many of those bills were scarce, so a customer might have to pay with a thick wad of paper. Banks allowed customers to withdraw a maximum of 20 million bolivars in cash per day, or sometimes less if the branch was running short.
So, consumers have come to rely on U. The price of the dollar on the black market rose Friday by more than , bolivars and stood at 5,, in the previous denomination and 5. The official exchange rate increased slightly to 4,, After more than four years of hyperinflation, many Venezuelans think the new bills will be short-lived as well.
Maduro during a Friday televised goverment event insisted the currency adjustment should not result in prices increases. No one should increase the price of any product.
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