...considered one of the countries with the highest living standards. Today, after seventeen years of revolution its economy is suffering a severe crisis. The question is, how this country that has larger oil reserves than Saudi Arabia, cannot fin basic good in shops? The crisis is a consequence of an economic mismanagement and the authoritarian Chavista Government. When Hugo Chavez came to power, his goal was to reduce inequality and provide a fair distribution of wealth among the population but, his failure was to diversify Venezuela’s economy. The financial health of the country was in excellent condition when the price of a barrel of crude oil was 100 dollars, between 2013 and 2014. The revenues of the oil industry were designated to fund social programs to reduce poverty, creating a socialist government. Instead of investing...
Words: 667 - Pages: 3
...Restate Thesis Located on the northern coast of South America, Venezuela covers 353,800 square miles and has a population of approximately 29,000,000 people. Its biological diversity is greater than any other country in the world. Venezuela was colonized by Spain in 1522 and declared its independence in 1811. Democratic government won the popularity of the people in 1958. Hugo Chaves was elected president in 1998 and began the Bolivian Revolution. After the death of Hugo Chavez in 2013, the people elected Nicolas Maduro president. Because oil is the main resource and export of Venezuela, fluctuations in the oil market have caused great economic crisis. In 1995, the poverty rate reached 66%, and the inflation rate reached 100% the following...
Words: 2129 - Pages: 9
...Although there were many political achievements such as the modification of the constitutional framework as well as laws that enabled a stronger participation eventually resulting in political change that was strongly demanded. However, these political and economic reforms came at a price there was a lot a resistance from the Venezuelan people. The ongoing tension held by the people made itself very clear from 2001 to 2003 when the opposition attempted to force the resignation of Chavez. Venezuela suffered a catastrophic recession in 2002, “According to the Central Bank, in 2002 the variation of the GDP compared with the previous year register -8.9% and in 2003 it was -7.8%. For the oil industry, the variation registered was -14.8% for 2002 and -1.9% for 2003. In 2003 the unemployment rate reached 18.9% and by 2004 it had decreased only to 15.1%” (Lopez Maya, pg 222).The leadership of Hugo Chávez in 1998 marked the rise of the left in Latin America and especially the rise of the Bolivarian forces. The leadership of Hugo Chávez in 1998 marked the rise of the left in Latin...
Words: 1214 - Pages: 5
...minute. That was how Isleida, a government employee at the Venezuelan transport ministry, planned to spend the first of two months of mandatory Fridays off. The measure, which applies across the public sector, was decreed this week by President Nicolas Maduro as part of an emergency plan to save electricity while Venezuela struggles through an economic crisis and a severe power shortage. Isleida spent the morning doing housework, then planned to go shop for food -- a scarce commodity in the recession-racked country. "It shouldn't be like this. We're paralyzing the country. Lots of things aren't getting done," said Isleida, a 50-something woman whose name has been changed to protect her from scrutiny -- or worse -- by government officials. The socialist government blames the electricity shortage on three years of drought, which have choked off the 18 hydroelectric dams the country relies on for power. But some economists warned that shutting down the public sector once a week would only make the recession worse. "The impact of the electricity crisis will be devastating for the country's productivity, which was already clearly depressed. It's horrifying to see the condition of our economy and infrastructure," said economist Luis Vicente Leon. "It's even more horrifying that the only official response to the fact that there's no light is to turn out the lights." Blackouts have swept the country because of the crisis. The drought has caused officials to implement water rationing...
Words: 721 - Pages: 3
...to the oil industry in Venezuela, which competes with Saudi Arabia in claiming the biggest oil reserves in the world. Capriles says that is he wins, "We have to revise every deal. I think they are agreements that are not functioning...How have relations with Iran and Belarus benefited Venezuela? We are interested in countries that have democracies, that respect human rights, that we have an affinity with. What affinity do we have with Iran?" However, this is possible option, one that as the days pass appears to become less and less probable. For now it looks like Chavez’s chosen successor will take the role as Venezuelans leader. Maduro won 50.6% of the vote, while opposition candidate Henrique Capriles Radonski obtained 49.07% of the vote. If Maduro ends up becoming president, Maduro begins his presidency in a very difficult economic crisis. The economy has a very slow economic growth, high inflation dollar and goods shortages, stagnant oil production, which are a mess. With this he will struggle to recover popularity. furthermore, economic policy and political stability will likely suffer. He will be under pressure to reverse social discontent, which means he is unlikely to make needed economic adjustments. This means that foreign exchange and price controls will likely be the same, and demands on state-run oil company PDVSA will remain high, eliminating investment capacity. Moreover, he will have trouble in his ability to put on different policies, as he will need to prove...
Words: 807 - Pages: 4
...the United Socialist Party of Venezuela or (PSUV), and Mesa de la Unidad Democratica, (MUD) a unity coalition party that formed to oppose the PSUV. The PSUV members are referred to as Chavista’s after the former and deceased president Hugo Chavez. The PSUV controls the presidency under Nicolas Muduro, the Supreme Court, and all national institutions. While The National Assembly has recently changed hands and is controlled by a confederation of opposition parties united against the PSUV. The Venezuelan government and political atmosphere are in a state of deep disarray and chaos as hyper-inflation, food and medicine shortages, corruption, and a crashing economy are driving a wedge in the once prosperous socialistic government. The PSUV under control of Mudero is using this opportunity to erode the powers of the National Assembly and consolidate more power as the President. These actions taken by President Mudero are eroding public faith and international relations while the political crisis continues to grow (“6 things you need,”2016). Military Venezuela’s military has gone through a period of modernization since 2005 and boasts an annual budget just shy of 5 billion dollars or 6.5% of Venezuela’s GDP. It has an estimated standing army of 115,000-130,000 personnel and active reserves of 438,000 (Venezuela Military Strength). Its four military branches include the Army, Navy, Airforce, and National Guard. Venezuela’s Military Doctrine resides in external defense and internal...
Words: 1582 - Pages: 7
...THE CASE STUDY OF PETROZUATA The case of Petrozuata Petrozuata is a joint venture between Conoco, then part of DuPont, and Maraven, a subsidiary of Petróleos de Venezuela S.A. (PDVSA), Venezuela’s national oil company. It is the first in a series of development projects that are aimed at “re-opening” the Venezuelan oil sector to foreign investment. The project consists of three key components -Production of heavy oil from a new field in Venezuela’s interior -Transportation of the oil to coast via pipeline -Transportation of oil to refineries along the US Gulf Coast Once refined, the syncrude would be sold at market prices to Conoco under a DuPont-guaranteed off-take agreement. At the end of this 35-year purchasing agreement, Conoco will transfer its shares to Maraven at no cost. The sponsors agreed to use 40% of equity (40%) and 60% of debt to finance the project’s $2.425 billion total cost. The financial advisors, Citicorp and Credit Suisse First Boston, used a multi-pronged financing strategy to raise debt from commercial banks, development agencies, and bond investors. In the end, the sponsors raised $450 million in bank finance and $1 billion in Rule 144A bonds, all of which was non-recourse to the sponsors following completion of the project. The decision to finance this deal on a project basis was actually a dual decision regarding both financial and organizational structure. Risks analysis The purpose of this paper is to analyze how the sponsors...
Words: 2224 - Pages: 9
...One of the most conclusive verdicts on the leadership of Hugo Chavez in Venezuela came out of a physician who became famous for ensuring that he had inner knowing that cancer will eventually kill the president of Venezuela. It was widely covered by the media of opponents, communication eager to fill the void left by the lack of official information on the health status of Chavez statements. Beyond truth diagnosis doctor Jose Rafael Marquina, a Venezuelan who resides in Florida, USA, also transcended his criticism of the style of government of the now deceased leader. In an interview with the local newspaper Tal Cual in December 2012, he said: "Chavez dealt with his illness in the same way it did with the country in an improvised way." From...
Words: 1344 - Pages: 6
...Running Head: VENEZUELAN OIL MARKET 1 Analysis of the Venezuelan Oil Market BINT 6311 – International Business Management University of the Incarnate Word VENEZUELAN OIL MARKET 2 Table of Contents Abstract ............................................................................................................................................3 Review of Venezuela .......................................................................................................................4 Geographic Location ....................................................................................................................4 Demographics ...............................................................................................................................5 Economic Indicators .....................................................................................................................5 Politics and Economic Freedom ...................................................................................................6 Analysis of Entry Modes .................................................................................................................7 Government’s Role ......................................................................................................................8 Joint Ventures ...............................................................................................................................8 Recent Events in Entry ....
Words: 4170 - Pages: 17
...1. Executive summary: The main purpose of the following report is to provide information about the profile of The Bolivarian Republican of Venezuela; in order to study the current situation of the country for further investigations in the future that may help to understand the opportunities and risk involve in importing and opening new markets in Venezuela. The analysis includes reviews and an extensive research about: First the geography and global information to introduce the country; second, the History since the arrival of the Spaniards. The Political analysis will be explained as much detailed as possible due to its specifics characteristics in the recent decades with the Hugo Chavez’s government. He report draws special attention in the Social analysis is one of the main issues to be reviewed due to its importance at the time of making any decision. The economic aspect of course will be in consideration with both: the Official’s figures and the international observer’s ones, the graphics will be analyzed. It will be also mentioned the Business environments and the principal sectors to invest or that could be interesting to sell. To support all the information in the report before any conclusion, it will be used THE SWOT tool to demonstrate why Venezuela is an interesting place to import, especially in the last 5 years. It is not just a country of striking natural beauty, which ranges from the snow-capped Andean peaks in the west, through the Amazonian...
Words: 6774 - Pages: 28
...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...
Words: 1166 - Pages: 5
...Exercise country analysis and country risk Venezuela Hypump, a US company producing hydraulic pumps used in oil producing industry, likes to investigate the possibility of starting a new subsidiary in Venezuela, and asked you to make a country analysis and country risk report. The facts, key indicators and back ground information of Venezuela you found after research are presented in the Appendix. Use that information to answer the following questions: Moderate poverty and inequality have decreased from 1998 onwards due to the program called ‘Missiones’ according to the World bank (see appendix). 1. Use the fact sheet Venezuela whether this can be confirmed with figures. Assess: a. Level of development b. Income inequality 2. Assess Venezuela’s export structure. What is it based on? Use GDP and expenditure components for Q 3 and Q4 to assess Venezuela’s attractiveness from the table: 3. How can you see 2014 and 2015 are forecasts? 4. Characterize the phase of business cycle Venezuela has faced in 2013 and 2014 (Explain which key indicator(s) are used to answer the question) 5. Make a ‘first level analysis’ of the aggregate components of GDP to explain the economic (GDP) growth during 2013. 6. Explain the influence of imports on GDP in 2013. 7. Make a ‘second level’ analysis of the aggregate components of GDP to find some reason(s) for the movement of the various components. ‘The decrease...
Words: 2111 - Pages: 9
...VENEZUELA OIL AND GAS INDUSTRY (PDVSA) NAME: INSTITUTION: Venezuela is among world’s leading oil and gas industry holders. It is ranked 13th among the world’s largest oil producers and 10th among the exporters. Notably, it has historically been one of the United States largest sources of oil imports. These key contributions in the world attract experts’ opinions about Venezuela’s future trends in the industry. It is majorly dependent on key factors such as the customer needs, state of economies and the environmental changes in the country. The increasing customer needs has had a major role in the prediction of future trends in the oil and gas industry in Venezuela. Globally the customer demand influences the world peak oil; this refers to when the rate of oil production enters its maximum level. Some petroleum experts such as Kenneth Deffeyes and Matthew Simmons believe that the increased dependence of agricultural, industrial, and transport systems on low cost and availability of oil have negative impacts on the gas and oil industry (World crisis.net, 2008). If strategic economic changes are only in response to high prices and shortages rather than a threat of the peak, then the rate of economic damage to importing countries would only depend on how rapid oil imports decline after the peak. The oil demand is projected to grow to increase by over 30% from current levels by 2030. Venezuela been a key source of oil means that it will play a key role to try and meet the need...
Words: 1348 - Pages: 6
...MODERN LATIN AMERICA ESSAY 1 Question: Despite most of the Latin American countries achieving political independence in the early 19th century, not one of them was able to achieve first world status over the next one hundred years. Why was this so? Concentrate on one country in your analysis. Latin America is the vast continent with three distinctive regions of Central America, South America and the Caribbean coast, and is composed of 33 republic countries varying in terms of population size from over 19 million Brazilians to 11 thousand citizens of Grenada. The ethnic make-up of modern Latin America comprises a variety of racial and ethnic groups such as Europe, Africa, Asia and American-Indians, all of whose root is based in 4 different continents. The notable physical geography is the range of Andes Mountains that are long narrow backbone of the continent from Venezuela through Colombia, Ecuador, Peru, Bolivia and on into Chile, and cut off the east coastline and the west inland areas. The other features are the Amazon and rivers, huge tropical rain forest, and lastly, an abundance of natural resources as well as vast hectares of farmland. These geography features are an important factor that hampered economic growth due to difficulties in public transit and transportation between regions, hindrance of social and political unity, and therefore, unable to achieve a formation of large unitary state, like North America, that led to separation into large and small 30 countries...
Words: 2403 - Pages: 10
...In 2016, the Revolutionary Armed Forces of Colombia (FARC), the country’s largest rebel group agreed to demilitarize. However numerous other armed groups are getting stronger in proximity of Venezuelan border. With crisis becoming stronger in Caracas, the unprotected borders have provided space for these groups to gain strength. It is becoming easier for these Colombian armed groups to engage young and desperate Venezuelans. Such developments could pose serious threats for peace settlements of Colombia. No doubt, the oil – affluent country is going through worst calamity in the history. With majority of supermarkets and stores being plundered by hungry and angry crowd, the ordinary people forced to live without food. The government has become despotic. The opposition lawmakers, under the Democratic Unity Roundtable coalition, took the majority in the National Assembly in 2016 for the first time in sixteen years, but Maduro took several measures to subvert...
Words: 996 - Pages: 4