Venezuela economy Under Chávez’s leadership
Question 1
Under Chávez’s leadership, Venezuela was put in socialism. To date, Venezuela is still a socialist society due to this leadership. Chávez positioned himself as the Bolivarian Revolution leader. This kind of revolution saw Latin America become a socialist society. In essence, Venezuela exercises socialism, which, to some considerable extent, has been blamed for the collapse of the country’s economy.
It is difficult to characterize the political system under Chávez’s leadership, given that he presented himself as an authoritarian (Stavrakakis, Kioupkiolis, Katsambekis, Nikisianis, & Siomos, 2016). However, Venezuela is considered a democracy, even though elections are rarely transparent and fair. Under Chávez, his leadership can be regarded as authoritarianism, given that he controlled all arms of government and repressed dissent.
Question 2
A good leader does not unilateral changes, but would always allow for bipartisanship. The decision by Chávez to make changes to contracts with foreign oil companies in the future would scare away foreign investors in Venezuela (Stavrakakis et al.,2016). Investors deserve to be heard, and a good leader would always sit down on a roundtable to agree with investors on the way forward. If contracts had to be changed, the best thing a good leader would do would have to agree harmoniously with foreign investors on the contract changes. Therefore, given that Chávez ignored that, his unilateralism in handling serious issues will in future lower investor confidence in Venezuela. As a result, some future investments in Venezuela will drop, resulting in job losses and economic slowdown.
Question 3
A high level of public corruption is dangerous to any economy, and it can crush it at any time. A high level of public corruption in Venezuela would result in budget deficits, reduced spending on commercial projects that will revitalize the economy. In essence, corruption poses a significant threat to future growth rates. When a few people engage in massive looting of public resources, they stifle efforts to rebuild the economy. To achieve high growth rates in the future, Venezuela will have to minimize corruption so that funds can be channeled to development projects. However, considering a situation where people in authority massively engage in bribery and weaken institutions, it will be a pipe dream for Venezuela to register significant growth rates in the future.
Question 4
I think the impact of foreign multinationals exiting Venezuela is the loss of jobs and economic downturn. These companies offered employment to many Venezuelans. When they exited, it is doubtless that some citizens lost jobs. With job losses, the economy is likely to slow down. Besides, less exposure or exit of multinationals in Venezuela in all probability leads to low investor confidence. A good leader will protect investors by all means, by creating an enabling environment that allows them to thrive, create jobs, and pay taxes. However, to reverse the situation, the Venezuelan government has to make laws or policies that will create a favorable business environment to attract investors. Also, the government should work on improving the ease of doing business to attract investors and restore confidence among multinationals that exited the market.
Question 5
The Venezuelan economy neared a complete collapse due to failed leadership. Venezuelan has faced political unrest and repression of dissidents, creating an unfavorable business environment (Flores, 2019). Thus, to reverse the situation, the opposition leadership and government should resolve their political differences and focus on creating a favorable business environment to attract investments that can revamp the economy.