Venezuela Battling with Extreme Poverty
Venezuela is Battling with Extreme Poverty
Over 700,000 people in Venezuela have slipped into extreme poverty in just one year, under the rule of Nicolas Maduro who is now the President of Venezuela.
The inflation rate keeps rising and the homicide rate keeps growing unchecked. The shortages of consumer products is getting worse and worse everyday in Venezuela.
Everything now indicates that the economic crisis has hit those who have the very least, the very hardest. Overall inflation was 56.2% last year, but that figure increases to 73.8% if only food products are taken into account.
Venezuela is battling with extreme poverty because of every $100.00 that drop into the state coffers from the sale of exports, $96 come from oil products. Other exports have almost completely disappeared and private economic activity has been slashed, as a result of tough exchange rates that have been in place for the last 11 years.
The oil production rate has not grown according to plan and there is a massive subsidy program that holds the economy back. The government refuses to adjust the price of fuel, which is costing the state about $12 billion a year.
All of this leaves the government with no cash flow to import the goods that the private sector is failing to produce, due to a lack of incentives.
The poverty figures drew quick reactions from the opposition and civil society. Provea, which is a human rights group, tells the press….. “the devaluation of our currency in February 2013, the interrupted supply of essential services, and the shortage of food and personal care products, among other things, no doubt play a role in the rising poverty reflected in the INE report.
During his weekly program, Maduro did not directly mention these results Instead he made renewed warnings about a conspiracy against his government and a supposed economic war that prevents food supplies from growing.
