Boom to Bust: The Fall of Venezuela

Case Code: ECON056 Case Length: 15 Pages Period: - Pub Date: 2016 Teaching Note: Available

Price: Rs.500 Organization : - Industry : Government & Non-Profit Organisations Countries : Venezuela Themes: Venezuela, Hugo Chavez, Nicolas Maduro, Oil Prices, OPEC, PDVSA, OPEC, Doha Meeting

Abstract Case Intro 1 Excerpts

Abstract

The case discusses the collapse of Venezuela’s economy with the country going from being a rich nation with the largest reservoir of oil to one in the middle of a messy economic crisis. While the country earned a huge amount of oil income from 1999 to 2013, it failed to utilize that extra income to create a sound economy. This led to the downfall of its economy, society, and finances. During his last days, President Hugo Chavez (Chavez) chose Nicolas Maduro (Maduro) as his successor. Maduro, who became President in 2013, inherited a messy economy and a disturbed society. Analysts observed that Maduro failed to revive the dwindling economy and that under him, the situation only worsened. The rate of inflation skyrocketed; almost 70% of the population was living under poverty; the rate of crime and unemployment increased like never before; the fiscal deficit increased with every passing month; and the country as a whole was on the verge of total collapse. Industry experts believed that the political instability prevailing in the country was a major contributor to Venezuela’s condition.

Issues

The case is structured to achieve the following teaching objectives:

• Analyze Venezuela’s economy since 1999 and identify the factors that led to its collapse
• Delineate the internal and external factors that led to the fall of Venezuela
• Comprehend the various components of the crisis facing Venezuela and its impact on the life of the public
• Develop a cause and effect model for the economic crisis
• Construct a roadmap for the country to recover from the crisis

Contents

Introduction
The Chavez Era
Inheritance of Mess
The Fall of Venezuelan Economy
Various Faces of Venezuela's Crisis and Impact
Upcoming Challenges
A Long Path to a Recovery
Exhibits

Keywords

Venezuela, Hugo Chavez, Nicolas Maduro, PDVSA, OPEC, Crude Oil, Oil Dependency, Social Unrest, Political Instability, Doha Meeting, Oil Prices

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