When it comes to which country has the best market, Venezuela used to be ranked in 14th place on the list of economic freedoms. Being a country that is generously rich in oil, copper, and other resources, this is a nation which should be doing quite well for itself, but instead over the past few years the economy has continued to get worse. As the government has continued to nationalize and take-over various industries, the country has fallen to the bottom of the list now. The country no longer places 14th in economic freedom, instead they have plummeted, and the Heritage Foundation found just last year that they were 175th out of 178 countries in economic freedom.
In Venezuela, “Food is scarce, inflation is soaring, corruption is rampant, health-care is overburdened and crumbling, property rights are almost non-existent, and the middle class is gone,” says financial expert Mike Maloney. “I imagine the next steps will be complete collapse and revolution... very often what brings on the collapse is hyper-inflation,” he warns.
As economic troubles have continued to increase for the country, the citizens there are now facing crippling inflation. It is estimated, as of July 2015, that the annual rate of inflation for the country is now at 808 percent. This rate is more than 10 times that of the previous year, which was officially recorded as being 68.5 percent. Currently, the nation is facing an inflation rate of roughly 20.2 percent per month. You now need roughly 687 bolívares to get one US dollar.
Boris Ackerman, head of the Economics Department at Simón Bolívar University, says that he has observed a decline in both labor productivity and product lines. So far the situation only seems to be getting worse, as officials continue making moves that only seem to worsen the problem. Just last week the government seized control of a food distribution center that was regularly rented out to companies like PepsiCo. Inc, Nestle SA, and others. They will be converting the property space into social housing. The state had originally notified the company of the plans to expropriate the space back in 2013, and a spokesman for Nestle has now said that their company is looking to redirect products to other facilities across the country.
As shortages in food and basic necessities continue to worsen, there doesn't seem to be any coherent solution coming around the bend from officials anytime soon. The country is now preparing for an upcoming congressional election, for which the government has already declared at least five opposition candidates to be ineligible to run. The campaign hasn't officially started just yet, but many believe that the government is already trying to send a clear message to the private sector (what remains of it); fall in-line or else face the consequences. Critics over the recent move from the state to confiscate the warehouse property, say that the decision to do so places thousands of jobs at risk and only further threatens access to food and goods for citizens.
Just last week, citizens took to looting one grocery store and the situation ended-up getting violent to the point where at least one person lost their life and dozens more were injured. The Venezuelan Observatory of Social Conflict has registered at least 2,386 protests taking place during the first half of this year alone. Of those demonstrations, 969 were over labor issues, 715 were related to housing problems, and 502 were about shortages of food, personal care items, and medicine. There is an average of roughly 14 demonstrations per day in the country now, as citizens eagerly await for their leaders to devise a solution that will address these problems effectively.
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