Oil price dynamicsseem to have hit quite a few oil-producing countries. Venezuela’s exports in 2015 constituted USD 38,010 million, out of which USD 35,802 million were of petroleum exports, which is near 95 percent of the value of its exports. With this position, a decline in oil prices in the past one and half years has led to a distraught economy. Revenues have sunk and the country’s situation has only worsened with regard to having credit for further imports. Increased commodity prices, higher prices on price-controlled goods, and scarce commodities per se, have worsened the situation. The worst part of the story is that nobody knows where the past revenues from exports have been utilised . Remarking that Venezuela takes minimal steps when it comes to financial reporting, is not new. (The country ranked 158 of 168 countries in terms of corruption and transparency). A gloomy economic situation, coupled with damaged socialist policies, there seems little hope for furtherance of middle-class livelihoods.
Nonetheless, the current administration has its own strategies to survive. Excess currency notes being printed, and making commodities scarce, seem the chosen solutions. The results have been mountain-high inflation, budget-cuts in all fields and industries, including education and research, and migrations.
Several, if not all oil-producing, and oil-rentier economies have found solutions to problems of heavy reliance on oil exports. Diversification of the economy and/or industries has been the primary solution in such cases. Diversification would provide not only the right boost to the economy in terms of revenues, but would also provide employment to diversified sections of people. Increase in employment would fortify purchasing power, and therefore demand. However, developing a variety of skills also becomes necessary in order to survive in a diversified market. Advancement of education and research, then becomes a necessity. Maintenance of existing infrastructure, rather than planning new structures may be the first step towards development. Curbing the black market for commodities, changing price controls and making commodities affordable, for survival would perhaps be a significant step towards sustenance. On the verge of sounding idealistic, control of the currently rampant crime rates and social unrest may also be a possibility if factors like education, employment and income levels are prioritised.