With a long history of paternalist governments, surreal inflation, food shortages, over subsidized gasoline, deep social crisis, wrong management, undeniable corruption, heavy oil-dependency (96% of export revenues) a decline on gold reserves and a never ending list of more negative things, is it possible for Venezuela to overcome its current situation? . I do believe the short answer is yes. However, the long one, is not a quick-and-dirty but rather a long well-orchestrated process of social, political and certainly economic transformation.
Venezuela has an enormous natural resources potential. It has a rich and diverse geography which accounts in the south part of the Amazonian Forest, sites like the Angel Falls, “La Gran Sabana” and “Canaima”. On the north it has access to the Caribbean Sea and places like Margarita Island and Los Roques archipelago are natural attractions for tourism. On the west the last section of the Andes Cordillera reaches the country. On the east the Orinoco river forms an impressing Delta landscape. Venezuela is one of the 17 megadiverse countries (a group of countries that have the majority of Earth’s animal species and high number of endemic ones.  It has in general a fertile soil which allows to grow crops like coffee, cacao and sugar cane. Venezuela has the major oil reserves of oil in the world, it is a major producer of minerals such as gold, bauxite and iron ore.
I have read from important analysts that declared Venezuela’s fate is a certain default. However, in March the country paid USD 1.5 billion to international bondholders as part as its debt obligations . The government increased gasoline prices (the first in 20 years) by 6000% and devaluated currency to tackle crisis . Still, people in the country feel the ravaging inflation, food shortages and heavy currency exchange control, not to mention the deep security and social crisis.
The question many ask is what to do to overcome a complex and deformed situation like the one Venezuela is current experiencing. Not an easy answer though. However, short, medium and long term measures should be considered and certainly implemented to start stirring the wheel to a new way. A non-exhaustive list is presented as follows.
- In the short term measures like the one recently taken about increasing gasoline prices are required. In Venezuela a liter of water is more expensive that one litter of refined gasoline.
- Initiate a currency stabilization process.
- Initiate a program to reduce the inflexible foreign currency controls.
- Private assets expropriation has been an ineffective measure that lead to productivity decrease and investment uncertainties. It seems that socialist-communist practices only benefit certain individuals and not the whole mass. The effects can be easily observed in the food shortages the country is experiencing.
- Urgently tackle inflation.
- Implement education programs to target the change of social paradigms and negative patterns. Paternalist governments planted the seed that they are the ones that need to solve all issues, giving little or no room for entrepreneurship and risk and responsibility taking.
- Initiate a deep restructuration of social healthcare.
- Urgently tackle criminality and people security issues. Caracas has a very high homicide rate and some claim is one of the most violent cities in the world .
- Provide education to more individuals. There are still many remote areas without basic education facilities. Even though Chavez government tried to include poor people into the education system, the quality of those programs are of dubious quality and exigence standards.
- Focus on promoting innovative carriers that will help to develop the country in the long term. For example, as India once focused on IT, Venezuela could follow that example and provide quality education in areas such as green and alternative energies.
- Reduce public expenditures. A concrete example is to reduce and optimize the ministries. Currently there are 30 ministries that can be reduced to half that list .
- Tackle corruption and increase transparency.
- Dismiss obsolete political philosophies and currents that have been proven to be inefficient and ineffective.
- Initiate an oil-dependency reduction strategy.
- Take advantages of its geographic position and exploit solar energy projects.
- Prospect and assess wind or any other alternative sources of energy production (biomass, biodiesel, sea waves, etc).
Even though saying and advising is easier than doing and implementing, the political leaders need to stop animosities and take a deep consciousness on what the future might look if no action or little commitment is taken. So far it looks grim. I do believe that for Venezuelans the current situation might help to increase awareness of the alternatives and possibilities. People will consider their priorities and goals better, thus helping to build fresh perspectives. It has been said: Necessity is the mother of invention. Time will tell.
“Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.”
”Data World Bank,” [Online]. Available: http://data.worldbank.org/country/venezuela-rb.
”Megadiverse Countries,” [Online]. Available: https://en.wikipedia.org/wiki/Megadiverse_countries.
”Veneuela Analysis,” 2016. [Online]. Available: http://venezuelanalysis.com/analysis/11876.
”The Guardian – Venezuela Gasoline Increase,” 2016. [Online]. Available: http://www.theguardian.com/world/2016/feb/18/venezuela-president-raises-fuel-price-by-1300-and-devalues-bolivar-to-tackle-crisis.
”Caracas Homicide Rates,” [Online]. Available: http://www.worldatlas.com/articles/most-dangerous-cities-in-the-world.html.
”Veneuelan Ministries,” [Online]. Available: https://es.wikipedia.org/wiki/Anexo:Ministerios_de_Venezuela.