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Country Highlights

Venezuela: Impact of Political Instability

Venezuela’s authoritarian politics under the United Socialist Party’s rule have severely compounded its economic implosion. Policies nationalizing industries and expropriating private assets shattered investor confidence and productivity. Political repression also triggered international sanctions further isolating Venezuela.

in Venezuela – Since 2019—the US and other nations have imposed broad economic sanctions prohibiting transactions with Venezuela’s government and state oil company PDVSA. While aimed at pressuring the regime toward fair elections and democracy, these measures have inadvertently hurt ordinary Venezuelans by restricting vital imports and financial access.

The political stalemate between the ruling socialists and opposition persists with no compromise. The government blames sanctions for all economic troubles while refusing domestic reforms. The opposition tries rallying international pressure for regime change rather than constructive dialogue.

Meanwhile private sector activity and living standards crumble without solutions to the political gridlock. Eventual negotiations and power sharing seem necessary to restore economic functioning, but remain elusive given extreme polarization.

Potential relief comes from recent sanction exemptions permitting oil trade and infrastructure investment. But fully normalizing external relations requires free elections and dismantling authoritarian structures – which the current regime obstinately resists.

The stalemate between the Venezuelan regime and opposition shows no signs of resolution in the near future. The government continues resisting calls for free and fair elections, while intensifying authoritarian tactics like arresting opposition leaders and cracking down on protests.

in Venezuela – political uncertainty and repression have caused private sector activity to decline sharply over the past decade. Domestic businesses struggle to operate amid arbitrary regulations, hyperinflation, crumbling infrastructure and rising crime. As the informal economy mushrooms, skilled professionals continue emigrating en masse, representing a disastrous brain drain.

Venezuela has been grappling with a severe economic crisis and hyperinflation, with the annual inflation rate reaching staggering levels. The country entered hyperinflation at the end of 2017— with annual inflation rates exceeding 2,000% in 2020 and reaching over 130,000% in 2018. The economic collapse was precipitated by a government with dwindling revenues which is a large budget deficit financed by money printing and declining oil revenues which are exacerbated by U.S. sanctions and low oil prices.

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Understand the macroeconomic situations that affect the global positioning of countries.

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Featured Reports

Understand the macroeconomic situations that affect the global positioning of countries.

Businesses can better understand how chatbots can advocate their vision.

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