Bolivarian Republic of Venezuela (in short Venezuela) is a country located on
the northern coast of Nothern America. Venezuela has long been known as the
world’s largest oil reserve and also the world’s leading oil exporter.
Venezuela quickly changes from underdeveloped agriculture such as coffee and
cocoa to oil exploitation. It soon became main products to be exported and
government’s revenue. However, this is the first step leading Venezuela’s
economy to destruction.
1980, the supplies of oil in the international market have far exceeded the
demand for its lead to a severe oil glut. This caused a substantial drop in
price from 35$/barrel to below 10$/barrel. This has resulted in a long-term
economic crisis in Venezuela. Inflation reached 100% in 1996 while the poverty
rate increased to 66% in 1995-1996. Venezuela experienced a long recession
until the early 2000s when the oil price recovers. Venezuela soon recovers and
become one of the richest countries in Nothern America. This has temporarily solved
the economic crisis and reduce unemployment and poverty rate. But where did
they go wrong to result in such dire state?
is a country depends solely on oil exports. Unlike Arab Saudi – the world’s
leading oil exporter who used profit in oil exploitation to invest in tourism
and infrastructure, Venezuela chooses to reinvest most of their profit in oil
exploitation. Despite having been warned that a country shouldn’t depend on a
sole specialty (Oil export) but also needed a B plan when things go wrong. The
first reason that makes Venezuela fall is when the price of oil started to fall
in late 2014. This has dealt a huge blow to Venezuela, push the economy back to
its state in 1980, or even worse. A barrel used to be over 110$ but now drop
below 50$. Without profit make from exporting oil, Venezuela cannot import
foods, medicines,… This made everyday-goods becomes extremely scarce. A
hyperinflation burst out accompany with a long-term economic recession. This is
due to the mismanagement of Venezuela’s government.
reason I choose to research on this topic because I have knowledge on this
topic. In my 2 years IGCSE study, I have done a project on how to improve the
condition in Venezuela but I didn’t dig deep in. However, I think this is a
chance for me to practice but also understand what’s happening and how it
happens in Venezuela.
has been a hot topic since 2012 when its dire state started to affect other
countries. BBC, CNN and other news companies has constantly notified people around
the world what’s happening in Venezuela. There are reports and also statistics
that I can use to analyze on their websites.
answer this question, I will have to answer questions such as “How bad the
policy that Venezuela used and using right now?”, “How and why Venezuela has
fallen in ruins?” and “What happened to the international oil market?” Such
questions would need to be answered before I can reach the conclusions on my