In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies. When measured in stable foreign currencies, prices typically remain stable. Effective capital controls and currency substitution ("dollarization") are the orthodox solutions to ending short-term hyperinflation; however there are significant social and economic costs to these policies. Ineffective implementations of these solutions often exacerbate the situation. Many governments choose to attempt to solve structural issues without resorting to those solutions, with the goal of bringing inflation down slowly while minimizing social costs of further economic shocks.
Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in the Caribbean Sea. Venezuela comprises an area of 916,445 km2 (353,841 sq mi), and its population was estimated at 29 million in 2022. The capital and largest urban agglomeration is the city of Caracas.
The economy of Venezuela is based primarily on petroleum. Venezuela is the 25th largest producer of oil in the world and the 8th largest member of OPEC. Venezuela also manufactures and exports heavy industry products such as steel, aluminum, and cement. Other notable manufacturing includes electronics and automobiles as well as beverages and foodstuffs. Agriculture in Venezuela accounts for approximately 4.7% of GDP, 7.3% of the labor force and at least one-fourth of Venezuela's land area. Venezuela exports rice, corn, fish, tropical fruit, coffee, pork and beef. Venezuela has an estimated US$14.3 trillion worth of natural resources and is not self-sufficient in most areas of agriculture. Exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of those exports.
The Bolivarian Revolution is an ongoing political process in Venezuela that was started by Venezuelan President Hugo Chávez, the founder of the Fifth Republic Movement and later the United Socialist Party of Venezuela (PSUV), and his successor Nicolás Maduro. The Bolivarian Revolution is named after Simón Bolívar, an early 19th-century Venezuelan revolutionary leader, prominent in the Spanish American wars of independence in achieving the independence of most of northern South America from Spanish rule. According to Chávez and supporters, the Bolivarian Revolution seeks to build an inter-American coalition to implement Bolivarianism, nationalism and a state-led economy.
The bolívar is the official currency of Venezuela. Named after the hero of South American independence Simón Bolívar, it was introduced following the monetary reform in 1879, before which the venezolano was circulating. Due to its decades-long reliance on silver and gold standards, and then on a peg to the United States dollar, it was considered among the most stable currencies and was internationally accepted until 1964, when the government decided to adopt a floating exchange rate instead.
From his election in 1998 until his death in March 2013, the administration of the late Venezuelan President Hugo Chávez proposed and enacted populist economic policies as part of his Bolivarian Revolution.
Municipal elections were held in Venezuela to elect 337 mayors and 2,455 local councillors for their respective 2013-2017 terms. Originally planned for 14 April 2013, due to the death of President Hugo Chávez and the announcement of a new presidential election to be held on that date, the municipal elections were rescheduled for 8 December 2013. That date, 8 December 2013, was later announced by the president of the National Electoral Council, Tibisay Lucena.
In 2014, a series of protests, political demonstrations, and civil insurrection began in Venezuela due to the country's high levels of urban violence, inflation, and chronic shortages of basic goods and services. Explanations for these worsening conditions vary, with analysis blaming strict price controls, alongside long-term, widespread political corruption resulting in the under-funding of basic government services. While protests first occurred in January, after the murder of actress and former Miss Venezuela Mónica Spear, the 2014 protests against Nicolás Maduro began in earnest that February following the attempted rape of a student on a university campus in San Cristóbal. Subsequent arrests and killings of student protesters spurred their expansion to neighboring cities and the involvement of opposition leaders. The year's early months were characterized by large demonstrations and violent clashes between protesters and government forces that resulted in nearly 4,000 arrests and 43 deaths, including both supporters and opponents of the government. Toward the end of 2014, and into 2015, continued shortages and low oil prices caused renewed protesting.
When elected in 2013, Nicolás Maduro continued the majority of existing economic policies of his predecessor Hugo Chávez. When entering the presidency, President Maduro's Venezuela faced a high inflation rate and large shortages of goods that was left over from the previous policies of President Chávez. These economic difficulties that Venezuela was facing were one of the main reasons of the current protests in Venezuela. President Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples, and often said he was fighting an "economic war", calling newly enacted economic measures "economic offensives" against political opponents he and loyalists state are behind an international economic conspiracy. However, President Maduro has been criticized for only concentrating on public opinion instead of tending to the practical issues economists have warned the Venezuelan government about or creating any ideas to improve the economic situation in Venezuela such as the "economic war".
Shortages in Venezuela of food staples and basic necessities occurred throughout Venezuela's history. Scarcity became more widespread following the enactment of price controls and other policies under the government of Hugo Chávez and exacerbated by the policy of withholding United States dollars from importers under the government of Nicolás Maduro. The severity of the shortages led to the largest refugee crisis ever recorded in the Americas.
The 2015 Colombia–Venezuela migrant crisis refers to a diplomatic and humanitarian crisis that occurred in mid-2015 following the shooting of three Venezuelan soldiers on the Venezuela–Colombia border that left them injured and President of Venezuela Nicolás Maduro's response of deporting thousands of Colombians. Maduro's response of declaring a state of emergency, closing the border to Colombia indefinitely and deporting thousands of Colombians that lived near the border, struck fear in tens of thousands of other Colombians living in Venezuela resulting in their emigration from the country and a crisis involving separated families and Colombians seeking food and shelter. The actions of President Maduro were questioned by human rights groups, the United Nations, the European Union and the United States.
2016 protests in Venezuela began in early January following controversy surrounding the 2015 Venezuelan parliamentary elections and the increasing hardships felt by Venezuelans. The series of protests originally began in February 2014 when hundreds of thousands of Venezuelans protested due to high levels of criminal violence, inflation, and chronic scarcity of basic goods because of policies created by the Venezuelan government though the size of protests had decreased since 2014.
On 14 April 2013, Nicolás Maduro was elected President of Venezuela, narrowly defeating opposition candidate Henrique Capriles with just 1.5% of the vote separating the two candidates. Capriles immediately demanded a recount, refusing to recognize the outcome as valid. Maduro was later formally inaugurated as President on 19 April, after the election commission had promised a full audit of the election results. On 24 October 2013, he announced the creation of a new agency, the Vice Ministry of Supreme Happiness, to coordinate all the social programmes.
An ongoing socioeconomic and political crisis began in Venezuela during the presidency of Hugo Chávez and has worsened during the presidency of his successor Nicolás Maduro. It has been marked by hyperinflation, escalating starvation, disease, crime and mortality rates, resulting in massive emigration from the country.
The Lima Group is a multilateral body that was established following the Lima Declaration on 8 August 2017 in the Peruvian capital of Lima, where representatives of 12 countries met in order to establish a peaceful exit to the ongoing crisis in Venezuela.
The Venezuelan economic crisis is the deterioration that began to be noticed in the main macroeconomic indicators from the year 2012, and whose consequences continue, not only economically but also politically and socially. The April 2019 International Monetary Fund (IMF) World Economic Outlook described Venezuela as being in a "wartime economy". For the fifth consecutive year, Bloomberg rated Venezuela first on its misery index in 2019.
The Supreme Tribunal of Justice of Venezuela (TSJ) in exile is an institution that some, including the Organization of American States, consider to be the legitimate highest court of law in Venezuela and the head of the judicial branch, as opposed to the Supreme Tribunal of Justice. It was established on 21 July 2017 following the 2017 Venezuelan constitutional crisis. The TSJ's 33 members have been based in Chile, Colombia, Panama, and the United States due to the political crisis in Venezuela.
Venezuela, officially the Bolivarian Republic of Venezuela, is a country located on the northern coast of South America. It is known for its large proven oil reserves. Before oil was discovered, Venezuelan production was primarily agriculture, such as coffee and cocoa. After the first commercial drilling for oil in 1917, oil production increased drastically due to the oil boom of the 1920s and was later furthered by World War II, as Venezuela supplied oil to the United States. From 1958 to 1989, democratic leaders attempted to use the large oil revenues to invest in other industry through various policies such as import substitution and other programs designed to diversify the Venezuelan economy away from a highly specialised export range. These attempts, for the most part, were unsuccessful as Venezuelan government revenues continued to be highly volatile due to the fluctuating price of oil, which was reflected especially throughout the 1980s due to the oil price crash. After struggling with fiscal debts due to a variety of trade protection measures and other policies, the President of 1989, President Andrés Pérez, worked with the International Monetary Fund in an attempt to rectify some of the issues plaguing the Venezuelan government. Perez was eventually unsuccessful due to political instability due to proposed austerity measures, and Hugo Chávez was later elected in 1998, after a defeat of both major political parties. The Chávez government begun enacting various socialist programs, such as free education and healthcare. These programs would continue up until Chávez's death in 2013. President Nicolás Maduro, Chávez's successor, was elected on 14 April 2013 and pledged to continue Chávez's work. However, due to hyperinflation, shortages of food and medicine and political instability, about 3 million Venezuelans have fled the country since 2015.
Hyperinflation in Venezuela was the currency instability in Venezuela that began in 2016 during the country's ongoing socioeconomic and political crisis. Venezuela began experiencing continuous and uninterrupted inflation in 1983, with double-digit annual inflation rates. Inflation rates became the highest in the world by 2014 under Nicolás Maduro, and continued to increase in the following years, with inflation exceeding 1,000,000% by 2018. In comparison to previous hyperinflationary episodes, the ongoing hyperinflation crisis is more severe than those of Argentina, Bolivia, Brazil, Nicaragua, and Peru in the 1980s and 1990s, and that of Zimbabwe in the late-2000s.
Viernes Rojo in Venezuela refers to Friday, 17 August 2018, when President Nicolás Maduro announced a series of economic reforms known as "Program of Recovery, Growth and Economic Prosperity", in response to increasing hyperinflation. This event is also known as Paquetazo Rojo or Madurazo by some media outlets. These reforms include the introduction of the a new currency with five fewer zeros, increase the minimum wage based on the Petro and increase VAT to 16%. According to President Maduro, these reforms have the goal of recovering the population's salary in two years through the Economic Recovery of Growth and Prosperity program, to eliminate the fiscal deficit and to eliminate the use of paper money.
