Venezuela Crisis: South American country Venezuela is currently in the news. America has kidnapped its President and his wife. How did Venezuela, with the largest oil reserves in the world, reach the brink of ruin? Let us know.
1- Government mismanagement
Venezuela has the world’s largest oil reserves (303 billion barrels). But today it is counted among the poor countries. The situation is such that inflation is at its peak in Venezuela. People no longer want to live in this country facing economic crisis and are migrating from here. The biggest reason for this is the mismanagement of the governments there.
2- Mentality of not working
In 1952, Venezuela was the fourth richest country in the world. The reason was the largest reserve of oil found under the ground. Venezuela earned a lot of money because of oil. The people there started feeling that now they do not need to do any business, because they have huge reserves of oil.
3- Dependence on other countries for everything
Venezuela focused solely on extracting oil and earning money from it. Due to this, the people there completely stopped farming, industries and other activities. The result was that Venezuela became dependent on other countries for everything except oil. Gradually, by selling oil, it started buying the goods it needed from other countries.
4- Free schemes
After the year 2000, instead of investing money in strengthening the economic condition of the country, the Venezuelan government distributed a lot of money in free schemes. Later, when the prices of crude oil fell, the government did not even have money left to pay the salaries of the people.
5- Distributing money to their loved onesLater, by removing qualified employees from Venezuelan state oil company PDVSA, the leaders hired their special people in their place. The result was that the technology of oil production could not be developed. Also, educated people started migrating from the country.
6- Rapidly falling oil productionTill the 90s, Venezuela produced 35 lakh barrels of oil daily, but now it has fallen to 8 to 10 lakh barrels. The condition of the government oil company, which is suffering from lack of maintenance, is bad. Even the country with the world’s largest oil reserves has to buy petrol itself from abroad.
7- Inflation has reached its peakInflation is at its peak in Venezuela. In 2012, the GDP there was 372.59 billion dollars, which is now only around 100 billion dollars. In 2020, it was reduced to just 43.79 billion dollars.