This document provides information about the Venezuelan crisis through several sections. It begins with a demographic profile of Venezuela, noting details like its capital, currency, population, and life expectancy. Next, it outlines a timeline of Venezuela's economic history from oil discoveries in the early 20th century through recent leadership changes. It then analyzes the current hyperinflation crisis and its impacts such as shortages, poverty, and mass migration. The document identifies political, economic, and external factors that caused the crisis, like overreliance on oil and U.S. sanctions. It concludes by proposing short-term solutions like aid and long-term solutions centered around economic diversification and strengthening institutions.

1. Venezuelan Crisis

2. Timeline
Understanding Venezuelan Economy
Cause-Effect Analysis
Solutions

3. Demographic Profile
• Capital- Caracas
• Currency- Bolivar
• Population- 3.16 Cr.
• Language- Spanish
• Life expectancy- 76
years

4. Time Line
1922
• Oil well found
1928
• Venezuela started exporting oil, 1mn barrel/day during WW2
1950
• Middle eastern countries have also started exporting oil
1960
• OPEC (Organization of petroleum exporting countries)- Iran, Iraq, Kuwait, Saudi Arabia and Venezuela
1965-
85
• Iran-Iraq war, Saudi war, Israel-Palestine, cold war. Asian countries developing at faster pace.
1999-
2013
• Huge Chavez, Golden period of Venezuela economy, unemployment dropped by 50%
• PDVSA
2013
• Nicolas Maduro

5. VENEZUELAN ECONOMY: CURRENT SITUATION
 Hyperinflation is one of the biggest concerns
facing Venezuelans
 From Jan 2018, inflation has grown at a whooping
260% per month
 A cup of coffee costs around 2.5m bolivars

6. • Political Instability: Growing
opposition movement
seeking referendum
• Socialistic Policies: Failure of
political class to diversify the
economy
Political
• Fall in crude oil prices in 2014
• Low fiscal prudence. E.g. high
food subsidies
Economic • Discovery of shale gas
deposits in USA
• OPEC cuts in production
• Diplomatic conflict with USA
External
CAUSE OF CRISIS

8. • Minimum wage is now about the equivalent of $1 a month, making basics unaffordable for many.
• With a shortage of the import goods, the black market has got a free hand in the country. Prices have
been doubling every 26 days on average.
Hyperinflation
• Venezuela facing shortage of medicine which is impacting the public health system
• 90% of Venezuelans live in poverty which is having a cascading effect on health of citizens
Health
• Of the 2.3 million Venezuelans living abroad, more than 1.6 million have fled the country since the crisis
began in 2015
Mass Migration
• Venezuela at the bottom of its 2018 Law and Order index, with 42 per cent of surveyed Venezuelans
reporting they had been robbed the previous year and one-quarter saying they had been assaulted
Rise in Crime
IMPACT OF CRISIS

9. POLITICAL
• Display political will to
combat the crisis
• Constituting a high
level panel of subject
matter experts to
facilitate decision
making
ECONOMIC
• Provision of essential
commodities at
affordable pricing by
government
distribution channels
• Increasing oil
production and selling
it in international
market
• Issue long term bonds
in international
market
DIPLOMATIC
• IMF or International
agency bailout at
favorable interest
rates
• Improvement of ties
with OPEC countries
SOLUTION: SHORT TERM

10. POLITICAL
• Empowering central
bank by providing SOP
e.g. Monetary Policy
Framework in India
• Instilling the faith of
the population in the
political structure
ECONOMIC
• Regulate exchange
rate
• Diversify exports and
investment
expenditure within
the economy
• Emphasis on fiscal
prudence and long
term stability of
economy
• Increase foreign
exchange reserves
DIPLOMATIC
• Collaborating with
MERCOSUR
economies to bring
regional stability
• Improving ties with Oil
importing countries
• Increasing SDRs at IMF
SOLUTION: LONG TERM

11. Thank You.