I’ve been reading a lot about the economic crisis in Venezuela. Hyperinflation as well as food and medicine shortages plus cuts to power are driving Venezuelans to bordering countries in mass numbers. To date, 2.3 million people have left since 2014. Ironically, this is doing nothing but continuing to hurt and already crumbling economy. With minimal tourism, Venezuela relied on its residents to keep the economy churning. With so many fleeing, things are getting more and more dire.
This is in contrast to the overall story being told throughout Latin America, one where most countries are thriving and continuously transitioning into the modern world, including modernizing their economies, social institutions and infrastructures. Interestingly, Venezuela is one of the countries that is a full member of MERCOSUR, which created a partial common market in Latin America and is one of the key economic developments there. It was designed to encourage flexible and fluid trade and create a free market in Latin America. While it increased trade tenfold in the 90’s when it was established, it has since fallen short, prompting critics to wonder if it is slowly making its way into being obsolete.
But the issue with Venezuela’s economy may be more Venezuela’s fault than MERCOSUR’s. In 2016, the country was suspended from the bloc because it failed to meet it’s minimum standards, which included that the country had not incorporated key rules on trade and human rights into national law. Was it these mistakes that cost Venezuela the economic freedom and success that other members of MERCOSUR have experienced? With 1,000,000% inflation expected in Venezuela by the end of this year, only time will tell.
“Mercosur Suspends Venezuela over Trade and Human Rights.” BBC News, BBC, 2 Dec. 2016, www.bbc.com/news/world-latin-america-38181198.
“How Venezuela’s Crisis Developed and Drove out Millions of People.” BBC News, BBC, 22 Aug. 2018, www.bbc.com/news/world-latin-america-36319877.
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing Cultural Differences (9th ed.). Oxford: Routledge.