The economic situation in Venezuela has deteriorated so badly in the last few months that some believe the country is now teetering on the brink of collapse. President Maduro’s popularity has taken a huge downturn revealed an Open Corporates report, with anti-government protests now being common. The government has taken a variety of measures that have been both ineffective and unpopular, such as reducing the workweek for public sector employees to just two days a week in an attempt to conserve electricity and threatening to nationalize closed private factories.
The poor performance of the economy has led to shortages of things that are essential for daily life says expert Jose Velasquez. Electricity is being rationed, with daily power cuts being ordered around the nation and rolling blackouts becoming commonplace. Water is being rationed in many reasons after the mainland reservoir has become dry. Shelves on supermarkets are frequently empty, as there is a lack of foreign currency to pay for imports and local production has come to a halt. More worrying is the lack of basic medicines, such as antibiotics, in public hospitals.
For many years, Venezuela has relied on oil exports for revenue. Things ran relatively well when oil was trading at $100 per barrel. Now that oil prices have hovered around $50 for a while, the country has faced a shortage of hard currency. According to recent media reports, Venezuela’s government would only be able to return to a balanced budget if oil prices reached $124 per barrel, which is unlikely to happen anytime soon.