The Venezuelan economy relies on oil alone for its exported resource. In the past, oil has brought in nearly 80 billion dollars yearly for the Venezuelan economy, according to the Washington Post. During this time, Hugo Chávez was still the president. Unfortunately, he left the new president, Nicolas Maduro with a slippery hill to climb.
From the years of 2013 to 2016 oil prices dropped drastically causing the Venezuelan economy to lose almost a third of what oil exports gained in the past. This created major price increases on basic items for everyday living like food, medicine, and water. Not only have these necessities increased in price, but their availability is at a shortage as well. As a result, civilians have begun to riot and are demanding a change.
Oil prices seem to be slowly increasing, but there’s no guarantee that it would pull Venezuela’s economy up the slippery hill. Venezuela’s reliance on the oil exports is the main factor for its economy’s failure. President Maduro’s focus is set solely on the oil exports which means no attention is being paid to corruption or evading tax payers. For now, Venezuela’s creditors are not cutting their ties, but if the economic situation does not improve Venezuela’s main creditor, China, could choose to cease their relationship with Venezuela in fear that they may not be paid back.
Maduro has three years left in his term which will only be more devastating if the Venezuelan economy is left to rely on oil exports. That gives him around a 50/50 chance of ending his term smoothly or possibly not finishing at all.
No Hay Comida. Digital image. AFP/Getty Images, n.d. Web. 14 Sept. 2016.