12 Jul What’s Going on In Venezuela?
Right now, there is a crisis going on in Venezuela. Nearly one person is murdered every 20 minutes. At a whopping 25,000 violent murders per year, Venezuela can be labeled as one of the most chaotic places on earth. With food shortages, hyperinflation, a dire health care system and constant power outages, Venezuela is inhabitable for even the most resourceful citizens. Why?
It is a bizarre scenario, to say the least. We have to go back to 1999 when the now deceased leader, Hugo Chavez, had naive but good intentions to change the system from a capitalist country built on corruption to a socialist country meant to help the working class. He completely dismantled the corporate run system in order to create an ideal socialist country. His plan was to change the currency system and build more programs meant to help the poor. Unfortunately, his plan was not well thought out before it was put into action. In order to do this, he took out a bunch of loans from the Chinese and American banks. Resulting in an annual payment of nearly $7 billion per year. He created a not so organized employment system for the uneducated poor. He also changed the currency system to the Venezuelan Bolivar dollar.
Not only was his plan quite hasty but it required a complete overhaul of the economy.Initially, the financial system was backed by the private sector such as Coca-Cola. Unions were almost non-existent and oil accounted for 95 percent of Venezuela’s exported earnings. Once Hugo Chavez was elected, he acrued a bunch of debt but the oil exports allowed, Venezuela to cruise through their debt and make ends meet. With the economy in such a drastic condition, the over-evaluation of the Bolivar dollar was bound to crash the market at any time and the incumbent president, Nicolas Maduros, was due to inherent the problems with little to no experience on how to solve them.