Nick Berardi
Homework Assignment #1
Due at start of class – Wednesday, September 17, 2014
Country Focus & Five Questions
Chapter #2-Country Focus: Chavez’s Venezuela
Page 42
Hill - Global Business Today 8th Edition
Type each question and give answer below question.
Answer the question consistent with the homework guidelines on page 4 of the syllabus.
Management 470-International Business Management
Fall 2014

Question 1: Under Chavez’s leadership, what kind of economic system is being put in place in Venezuela? How would you characterize the political system? (3 points)

Under Hugo Chavez’s leadership, a democratic socialist system was formed. Chaves was a huge advocator for global capitalism beginning when he ran for office. Chavez’s first step toward holding power over the government was when he took over the distribution of resources around Venezuela. In 2005, he announced an increase in the royalties the government would collect from oil sales. He also seized control over the court system when he fired Supreme Court justices. Chavez also extended government control over the media as well. Lastly,
Hugo Chavez took various enterprises into state ownership and required that other enterprises be restructured as “workers’ cooperatives” in return for government loans.
Question 2: How do you think that Chavez’s unilateral changes to contracts with foreign oil companies will impact upon future investment by foreigners in Venezuela? Discuss each concept and element of the question within the framework of an actual and specific example. (5 points)

Chavez’s unilateral changes with foreign oil companies will likely forestall foreign oil companies from growing or even wanting to do business with Venezuela. Venezuela’s economy is the worst it has ever been with a 56% inflation rate, which is the highest anywhere in the world. The Central Bank in