Abstract
The Venezuelan crisis has become one of the most dramatic of Latin American history. Venezuela has had the worst economic contraction of the region, has been focus to a sharp increase in extreme poverty levels, and has become the country with the largest refugee crisis of the continent. As the situation deteriorated, data sources have also reduced drastically by the government, which renders it difficult to assess the complete depth of the country’s economic crisis and adds another layer of complexity. Despite the Venezuelan collapse being staggering, few academics studies have attempted to identify its causes. This article addresses this gap and aims to understand the drivers of Venezuelan economic downfall. We provide a comprehensive diagnosis of the Venezuelan collapse and suggest the means to put Venezuela back on the road of sustainable development.
Highlights
Venezuela is undergoing one of the deepest economic crises experienced by any nation in modern history
Measured in terms of real per capita income, living standards peaked in 2012 and have fallen by 58.3% between that year and 2019.3 This figure is already the worse economic contraction registered in Latin America and the Caribbean since 1950, followed by a 58.2% decline suffered by Nicaragua between 1977 and 1993.4 Significantly, this decline happens during peacetime, a factor that sets Venezuela apart from historical cases of otherwise comparable magnitude
The National Institute of Statistics (Instituto Nacional de Estatística – INE) registered income poverty rising from 24% in 2012 to 33% in 1H15, its latest available print. These figures are, significantly lower than those presented in the Encuesta Nacional de Condiciones de Vida (Encovi) (National Living Conditions Survey) which is prepared by an association of leading local universities
Summary
Venezuela is undergoing one of the deepest economic crises experienced by any nation in modern history. Measured in terms of real per capita income, living standards peaked in 2012 and have fallen by 58.3% between that year and 2019.3 This figure is already the worse economic contraction registered in Latin America and the Caribbean since 1950, followed by a 58.2% decline suffered by Nicaragua between 1977 and 1993.4 Significantly, this decline happens during peacetime, a factor that sets Venezuela apart from historical cases of otherwise comparable magnitude. The National Institute of Statistics (Instituto Nacional de Estatística – INE) registered income poverty rising from 24% in 2012 to 33% in 1H15, its latest available print. These figures are, significantly lower than those presented in the Encuesta Nacional de Condiciones de Vida (Encovi) (National Living Conditions Survey) which is prepared by an association of leading local universities.. Toward Sustainable Human Development in Venezuela: diagnosis, challenges and economic strategy 287
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