Venezuela in Times of Shortage and the Alleged Economic War
Authors: Colmenares Kristy; Freire F. Karina; Garcia Elvy; Martinez Greyle; Peraza Asdrubal; Peraza Junior; Sanchez Leonardo.
The economic situation in VENEZUELA today is due to poor public administration and lack of foreign exchange for the importation of raw materials and thus to produce the items of first necessity, but the executive power of the country ensure that food fault is due to an “ ECONOMIC WAR “ imposed by private companies and politicians of the opposition of the country. In short, the is passing the worst economic time in history.
Venezuela is a country that bases its economy in the market, that is to say, However, in 2012 the situation economic became weak, and according to Ultimas Noticias, that year the inflation rate was 30,9%, the highest in Latin America. In addition to this, in accordance with the website https://www.larepublica.co/ in early 2014, the economy fell back into recession with three consecutive semesters of negative data. Nowadays, there is a shortage situation in the country. It affects regulated products, such as milk, various types of meat, chicken, coffee, rice, oil, precooked flour, butter and also in basic necessities like toilet paper, personal hygiene products, and medicine. Regarding the shortage, there is also an alleged economic war which https://misionverdad.com/ defines as “an articulated system of financial attacks aimed at affecting the everyday life of the Venezuelan population, their access to basic consumer goods and purchasing power of wages”. However, there are some facts that can be taken into consideration.
First, on February 5th, 2003, CADIVI, a currency control board charged with handling foreign exchange procedures was created. Its creation was to control capital flight by placing limits on individuals. Second, some agricultural measures were also enacted; and in accordance with https://www.washingtonpost.com/ they caused food imports to rise, and agricultural mainstays to slow in domestic production. Moreover, according to economist Angel Alayon, "the Venezuelan government has direct control over food distribution in Venezuela", and he also states that the problem is not distribution but production, since "nobody can distribute what is not produced". In addition, according to Miguel Angel Santos, a researcher at the Kennedy School of Government of Harvard University, as a result of expropriations of private means of production since 2004, "production was destroyed". Due to all this and what The Wall Street Journal reports, importers need to pay for the majority of basic products that enter Venezuela.
All that has turned into arbitrage or crime, hunger, and protests. Statistically speaking, the website https://www.as-coa.org/ reported that in March 2016, it was estimated that 87% of Venezuelan people were consuming less due to the shortages. There was a 50% to 80% rate of food shortages with 80% of medicine in short supply or not available. To Summarize, facts such as expropriations, decrease in the agricultural production and the economic hardness to import because of the weakness of Venezuelan currency and the difficult Access to American Dollars, lead to the following possible solutions: to stop unnecessary expropriations in companies that are producing, to invest in national production and to import only products that cannot be produced inside the country.
