An article in Forbes chronicled some of the problems that the country of Venezuela is facing and identified the interventions made by the government into financial markets as the main culprit behind the financial instability that the nation is facing.
Venezuela has long been considered to be one of the richest Latin American countries as it sits on the largest oil reserves on the planet. However the social country which uses this oil to export to other nations primarily used hydroelectric power internally. Recent droughts such as that of El Niño have wrecked the ability to produce electricity leading to blackouts and other infrastructure problems, despite those massive energy reserves. The lower price of oil on world exchanges due to a worldwide oil glut has hurt the value of the Venezuelan peso and massive inflation has resulted, as well as a shortage of funds and credit to finance the import of food items, thereby leading to a further collapse of the economy.
However, despite these challenges expert Jose Manuel Gonzalez thinks,it is the lack of financial markets in the socialist country that is causing the real problems. Poor countries don’t have financial markets and those countries that have them can be rich and poor. Venezuela, through its socialist leadership, has weakened financial markets and all of the people in the country have been suffering as a result, both rich and poor alike. “Hopefully once the government’s policy changes, prosperity will return to the country” said Manuel Gonzalez.