Can Political Instability lead to the downfall of a Country? (Venezuela)

(Part 2)

We saw an overall analysis of the present situation in Venezuela and the crisis leading the path to its downfall.

Is it too late for Venezuela to regain their economic stability and have a smooth functioning government?

Lets see about that today…

A first and foremost question that can come into anyone’s mind is,

What can we do to Overcome this Humanitarian crisis!?

There is, however, a great deal that the international community can
and must do to come to the collective protection of the Venezuelan
people.
Measures short of the use of force must be attempted and exhausted
in order to:
•Address the refugee crisis:
1. Immediately halt the deportation of any Venezuelan immigrant.
2. Provide Temporary Protected Status (TPS) to all Venezuelans
currently in the different parts of world.

3. Immediately meet the UNHCR’s identified funding needs.
4. Increase funding for Venezuela’s affected neighbors, especially
Colombia.
5. Provide recognized travel credentials to Venezuelans forced to flee
without documents

•Hold to account and further isolate the Maduro regime:
1. Open a formal International Criminal Court (ICC) investigation
into regime figures responsible for crimes against humanity in
Venezuela, and bring charges against them based on the recent
referral by six countries in the Americas; Argentina, Canada,
Colombia, Chile, Paraguay, and Peru formally referred allegations
of crimes against humanity by the Maduro regime to the ICC.
2. Ban entry and deny access to financial systems across the globe
to key regime officials and their families.
3. Expand targeted sanctions to Cubans involved in repression in
Venezuela.
4. Unseal any pending indictments against regime officials for drug
trafficking and money laundering offenses.

•Prepare for contingencies:
1. Establish and fund, at least partially, a multilateral reconstruction
and humanitarian relief fund.
2. It must also prepare for the possibility of a border confrontation,
at scale, between Venezuelan and Colombian armed forces, so as
not to be forced into improvising a response with unpredictable
consequences.

Next question would be,

How intense is the economic crisis in Venezuela?

Considering Inflation itself to be a negative indicator after a certain value, there was already a Hyperinflation that hit Venezuela in 2016 worsening the matters.
Imagine going to the store and finding that nothing has a price tag on it.
Instead you take it to the cashier and they calculate the price. What you
pay could be twice as much, or more, than an hour earlier. That’s if there is
even anything left in stock. This is the economic reality that underpins
Venezuela’s current “political crisis” — though in truth that crisis has been
going on for years.

It didn’t stop there, 2018 inflation was an estimated 80,000%. But reality was even more shocking, rate increased from 90,000 percent to 10 million percent! since 2018, according to the International Monetary Fund, though it is expected to decline back to below 1 million percent due to recent moves by the country’s central bank. Due to the worthlessness of the Venezuelan currency, people have become increasingly interested towards cryptocurrency.

How did Venezuela reach towards hyperinflation?? Well the sole reason for this was the foreign exchange currency rates adapted by Maduro.

Here’s where it gets more interesting,

Maduro demolished a complex currency system established by Chavez (Ex- President). In 2003, Chavez implemented a foreign currency control scheme where the government set an overvalued exchange rate between the Venezuelan currency and the U.S. dollar. One goal of Chavez scheme was to reduce inflation by overvaluing the currency, subsidizing imported products. But the currency control meant the regime had to ration available U.S. dollars to importers and at an overvalued (cheap) exchange rate, there was more demand for U.S. dollars than supply. Naturally, a black market for foreign currency emerged and corrupt regime members and lucky individuals assigned cheap U.S. dollars obtained large profits. Even worse, the scheme actually increased inflation since overvaluing the currency reduced government oil revenues in Venezuelan currency, leading the regime to print money to cover the ensuing budget deficit.

OK OK…we took a little detour but the point is to establish the intensity of the economic crisis in Venezuela. Now back to topic!

Now when we talk about recovery it is obvious that we’ll be looking at future presidency. Back in 2019 when Juan Guaido, the chosen interim president by National Assembly tried to remove Maduro which turned out to be in many huge riots. Talking about recovery a country’s development mostly depends on its people. It should address the problems of its citizens including given securities of all kind and improving living conditions. Controlling the day by day increasing crimes and the terror of drug cartels and Colombian Guerrilla groups has become a primary concern over the years.

Public resources should not be exploited by authorities or people of any kind. Venezuela should improve their relations with other countries boosting the foreign trade finally leading to economic development. Aids of all kinds should be provided. But the question that arises here is that can these be possible under Maduro’s reign?? The answer to this question is not certain as seeing the current situations of the country but for sure we know that Venezuela’s road to recovery will not be easy, short or simple. However, with a proper Government bodies, these milestones can be achieved in a period of time.

That ends our analysis…

You can always let us know your views by commenting below…

Ciao Amigos!

We will be back with something similar and interesting soon, stay tuned!

(Business Club Blog Team)