Venezuela’s Economic Crisis Escalates
Venezuela is at a turning point in its long-running financial crisis. Empty shelves and long gas lines run rampant across a country struck with hunger and violence, leaving citizens desperate for the basic necessities of modern living.
In a desperate attempt to save his country, President Nicolás Maduro is rolling out a frantic, if not futile, new economic plan with hopes of stabilization.
In this plan, Maduro is introducing a new currency named the “Sovereign Bolivar”. His currency removes five zeros off of the current currency, the ironically named “Strong Bolivar”.
The Strong Bolivar has been eviscerated by hyperinflation since Maduro took office in 2013. The International Monetary Fund has predicted that its inflation will top 1,000,000% by the end of the year, making it essentially useless for the citizens of Venezuela. The new Sovereign Bolivar is expected to have a rocky start, for it is backed by the crypto currency “Petro” and will not be recognized, at least initially, by many nations, to include the United States.
Another part of Maduro’s new economic plan is to increase wages in the nation by 6,000%. This minimum wage hike is the fifth of 2018 already, and has seen it rise from the equivalent of US$1 to now US$30. To help businesses with this adjustment, he stated that the government will subsidize the pay difference for the first 90 days. When pressed on where the government will get this money and how it will be disbursed, Maduro did not comment.
This economic crisis has, so far, influenced 2.3 million Venezuelans to flee their country as refugees in 2018 alone, leading to a major immigration crisis in South America. Unfortunately, this crisis is not new but is only recently getting major attention. Since 2010, Venezuela’s economy has decreased by an average of 20% per year. Surveys by Venezuelan Universities have determined that 90% of Venezuelans live in poverty, 75% live hungry, and the World Atlas states that Venezuela’s murder rate climb to second highest in the world. We are truly watching a nation collapse, and while it may appear these things are happening far away, the domino effect will certainly be felt here at home one way or another.