Site Loader
Rock Street, San Francisco

Venezuela is one
of the most developed countries in Latin America. By 1970 Venezuela was the
richest country in Latin America and one of the 20 richest countries in the
world (Gutiérrez, 2017). However, their economic system is volatile, it has the
tendency to ‘boom and bust’, it is not reliable, or stable, and therefore the
future of the population is always uncertain. For a long time this nation has been
able to depend on oil to keep them financially stable, however since the oil
prices fall in 2014 they haven’t been able to depend on oil and the deep-rooted
problems within their economy were clear to see. From 1998 Venezuela has had a
left or centre government (Larrabure, 2014) this has expanded opportunities for
community-based activism (Cooper, 2015) when Chavez came into power Venezuela
concentrated on ‘bottom up initiatives'(Daguerre, 2011) and Chavez promoted
bottom up and community led programs (Cooper, 2015). Chavez introduced popular
party which was a form of socialism that wasn’t controlled by the state but the
workplace and community, for a short time this worked, poverty and inequality
declined, there were increased social spending, unemployment rates has declined
and decrease in inequality, (Larrabure, 2014). However, these issues did not disappear
and now Venezuela face issues of food shortages, health crisis and inequalities
in wealth, as the government have failed to attend to the basic needs of
low-income individuals in terms of nutrition, health and education (Daguerre,
2011). Many economic, social, political policies and practices have been put in
place to try help develop this country in a sustainable way, without degrading
the natural resources in mining or oil practices.  For example, the
creation in 2002–03 of a series of emergency social programmes, the Missions
(Daguerre, 2011). The Missions for example the Barrio Adento helped with health
crisis and the spread of infectious diseases and other policies and practices involved
slum upgrading to help environment and improve infrastructure and transport
links. Venezuela is a vulnerable country a hotspot for disasters, as it is on a
coastline they are effected by climate change as it encourages natural disasters
such as hurricanes, flooding, landslides and mudslides.

Venezuela has
been dependent on oil rent for a long time and it accounts currently for 96% of
exports. Oil is the first development practice I would like to look into,
although this gave them the most income, it also deteriorated the environment
the quickest. Oil has had many positives and negatives for local Venezuelan
people, for example it urbanized and modernized the country it helped sustain
economic growth and reduce poverty (Gutiérrez, 2017). Benefits of oil revenues
were redistributed to the middle class and working class through social
programmes although access to this social protection was conditioned by
occupational status (Daguerre, 2011). Many social programs are reliant on the
money that came from the oil, in 2014 oil prices dropped suddenly nearly 50% in
June (Halstead, 2016) oil prices were $16 per barrel 1999 to $88.4 in 2014
(Vera, 2015), without the money from oil many social programs went without
funding. Oil money provided over one million poor Venezuelans with homes
(Halstead, 2016). However, oil hasn’t been so profitable for the population’s
health. Venezuela’s urban areas have a high concentrate of population and industrial,
and the urban areas created through oil mining also became hotspots for disease
outbreak. Mining has strong links to outbreaks of diseases due to the unhealthy
conditions gold mines in Venezuela’s Amazonian region (Bella, Damas, Marco
& Castro, 2017). Malaria is also largely uncontrolled in the mining region
because of a lack of medicines (Bella, Damas, Marco & Castro, 2017) Malaria
cases rose by 72% (Halstead, 2016). The dependence on oil that Venezuela has
developed has links to worse institutions and less democracy (Gutiérrez, 2017)
These conditions also have hindered the water sanitation in areas so the water
becomes polluted also. Oil is not a sustainable choice, but it was a choice
chosen by Venezuela. Since the 1970s, oil rent was not enough to stimulate
private investment for sustained economic growth. (Gutiérrez, 2017) and it has
become even worse with the fall in oil prices in 2014

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Between 1989 and
1990 political instability rose (Gutiérrez, 2017). Before Hugo Chavez became president,
poverty rate increased and income distribution had deteriorated. Venezuela
being unable to sustain economic growth or hold up a political system meant
that many people lost trust. (Gutiérrez, 2017) Political policy was socialism
the Chavez put in place when he came into power in 1998. When he came he
introduced 49 new laws (Vera, 2015) and changed constitution. Chavez thought
the root of Venezuela’s problems was the political system and he thought it was
necessary to dismantle it (Gutiérrez, 2017) Socialism destroying the old while
building new (Larrabure, 2014) however the new laws he brought in many entrepreneurs
thought anti-business this caused many oppositions and fights and even a 2-month
strike on the oil industry which have irreversible impacts towards Venezuela’s
economy (Vera 2015). Chavez died in 2013 (Halstead, 2016) and oil prices
dropped in 2014, leaving a vulnerable nation without their leader who created
this problem.

The informal
sector employment represents 52% of total employment for Venezuela (Daguerre,
2011). Majority of people are a part of the informal economy. Government tried
to raise minimum wage, set price controls and nationalise private industry but
it made it harder for people to get out of poverty on their own within government
planning.  There’s also a huge black
market and informal economy which means that Venezuela government won’t be
receiving as much tax as it should (Halstead, 2016) The government is not using
arable land to potential and should make incentives to farmers to encourage
them and provide careers for people. By the end of 2012, before oil prices
started to drop, Venezuela was already in difficult economic straits. The
country had already depleted almost all its liquid level of international
reserves and lost access to international financial markets. (Vera, 2017)
Although they have paid off all debts none of these economic policies can be
seen as successful towards the development as poverty has risen



Social security
is based on occupational status, so people who work in public sectors have a
high coverage whilst those who work in the informal economy have no coverage
(Daguerre, 2011). Social insurance fund in Venezuela has specific
insurance funds that cater to the needs of contributing employees however since
52% of Venezuelan workers work in the informal economy the social insurance
does not protect half the labour force against social risks such as ill health,
old age and unemployment (Daguerre, 2011). Also focusing on low income and
poor people puts social services in detriment as well as the environment.

However, “the household-poverty rate estimated increased from 26.8% in 1982 to
57.4% in 1997 (Gutiérrez, 2017). Household poverty rate increased from 43.9% in
1998 to 48.6% in 2002” (Gutiérrez, 2017). This is evidence to show that these
social policies are hardly working as poverty rates still keep rising. This is
because they are dependent on oil money which is uncertain and they lack
funding. Also promoting mainly bottom-up development and NGOs yet the general
population do not put in the effort to help the community-led development also.

Caracas Slum-Upgrading Project was a bottom up imitative in the capital of
Venezuela Caracas which was aimed to improve the quality of life of the
inhabitants 97.4% of the population in Petare Norte, La Vega and Vargas, and
9.6%of selected informal settlements which represented 15% of the informal
settlement population (Bigio, 2004). The project improved access to water and
sanitation services, facilitated access to electricity, contributed to the
construction of community service centres, increased community involvement and
facilitated access to land titles by informal dwellers. Increased safety
Improve water systems to provide a minimum service of eight hours of water
seven days a week, eliminating the need to store water and reduce water
loses.  And proper sewage. Public lighting, increased safety  (Bigio,
2004) Community-driven, sustainable and replicable infrastructure improvement

Health policies
are incredibly important to the development and environment of Venezuela. The
health of the population will in turn help economics as people can work and pay
taxes, and have better access to education as people can access schools. Health
care has largely been state led from 2003 (Cooper, 2015). Hugo Chavez launched
the innovative social Missions (UNICEF, 2005) and apart of the missions Barrio
Adentro was a social program implied the program seeks to provide comprehensive
publicly funded health care, dental care, rehabilitative services, and sports
training to poor and marginalized communities in Venezuela, through the support
from unpaid community health workers volunteers (Cooper, 2015). Barrio Adentro,
however, has been criticized for poor working conditions of Cuban workers. The
workers also went unpaid and they should’ve been paid with oil money like other
social programs (Cooper, 2015), funding irregularities, and “an estimated 80%
of Barrio Adentro establishments abandoned with some structures filled with
trash or becoming unintentional shelters for the homeless” States
responsibility to invest in health care (Cooper, 2015) instead of relying on
NGOs. Hugo Chavez promoted bottom up and community led development “you all
have power, you have to claim the rights that belong to you. Everyone has a
right to heath, to education.” “You have a right to this” (Cooper, 2015)
however many members of the public did not get involved, partially as a
majority of the people were dissatisfied with his economic policies claiming
that they were anti-business. As it is extra volunteer work outside everyday
work many locals do not want to get involved “Domestic economic instability,
due in part to volatility in global oil prices, could make it more challenging
for poor and working-class Venezuelans to devote themselves to voluntary labour
such as community health work.”  (Cooper, 2015)


policies Venezuela have put in have not been backed with enough money. insufficient
management of waste and pollution caused by industry has led to massive
environmental degradation linked with deforestation and climate change. Top-down
processes need to be introduced otherwise there will be very limited
development. However, I believe that inequalities will always remain between
wealth if these bottom-up programs continue as they keep poor people in their
place and make their expectations small. Venezuela will continue to struggle as
the more intelligent members of society who are capable of changing it, mostly
migrate which results in a ‘brain drain'(Requena, 2016). Thousands of doctors
are thought to have left the country, leaving the system short-staffed (Bella,
Damas, Marco & Castro, 2017). “By the time his medical students reach their
fourth year, Castro said, 60% of the class will have emigrated” (Bella, Damas,
Marco & Castro, 2017). With this lack of education, the population
will continue to destroy agriculture land and soils by not utilising them
properly. Although things are getting better, the deep-rooted issues within the
economics of Venezuela need to be stable before they can have any permanent environment
or economic success. 

Post Author: admin


I'm Glenda!

Would you like to get a custom essay? How about receiving a customized one?

Check it out