Economic Growth

One of the main challenges for a successful ‘Day After’ is halting the collapse of the nation’s economy. Inefficient and misguided expropriations and monetary controls have gutted private businesses, from corner groceries and family farms to manufacturing, petrochemical and food producers. Balanced economic policy reforms with á high priority for poverty reduction and equity need to be adopted to generate economic recovery. Under former president Hugo Chavez, the management of the oil sector was driven both by the domestic agenda of establishing “Bolivarian socialism” at home and by the use of the country’s oil resources for foreign-policy purposes.

Today, Venezuela’s economy and oil sector is in shambles. Inflation is predicted to go above 2000 percent in 2018.

Shortages of gasoline and daily electrical blackouts are now the norm. Domestic production is almost non-existence, in part because the private sector is suffocated with currency and exchange controls but also more than 1,000 have been expropriated under the Chavismo.

Comprehensive structural reform in the economy and oil sector is urgently needed.

The oil sector will be essential but it needs to be paralleled by renewed industrial, agricultural, construction and consumer sectors to set Venezuela on a path for economic growth. International technical and financial support to help stabilize the economy will be needed in the initial response, but defining the timing and sequencing of macroeconomic policies and opening the country to foreign investments will be vital to diversify the economy and foster sustainability.