What’s happening in Venezuela? | CNBC Explains

What’s happening in Venezuela? | CNBC Explains


Venezuela is facing its worst economic crisis
in decades. There are food shortages and water outages
that have sparked rioting across the country. Inflation is estimated to be the highest in
the world at around 500% and rising worse still, infant mortality is rising by 20%. There are constant blackouts with reports
that neuro surgeons are finishing operations with only the light from their smart phones… This is a far cry from a decade ago when Venezuela
was the richest country in South America and its socialist leader, the swashbuckling former
paratrooper Hugo Chavez, was determined to improve the lives of the country’s poorest. And he had the money to do it, all because
of one commodity – oil. But more specifically, the price of that oil. Venezuela has the world’s largest proven
oil reserves and is a major oil exporter. In fact, the black-stuff accounts for 95%
of its total exports. So throughout the 2000s,
during the oil boom, Venezuela was in a strong financial position. However, all that changed in 2014. Following Chavez’s death a year earlier,
the oil price that the government was so heavily dependent on, dropped by half in 6 months. The decline in the price of oil is a well-known
fact, so why then has Venezuela’s economy seen such a violent and prolonged reaction
while other producing nations haven’t? To answer that question we have to go back to when
Venezuela’s problems really started, 2003. That year there was an oil workers’ strike
– brought about by opposition leaders in an attempt to overthrow Chavez’s government. It meant the country stopped producing oil
and therefore stopped making money. It was a critical time for Chavez. The country needed to keep importing but it
was facing a perfect storm…not only a collapsing oil price but also a collapsing currency vs
the dollar. On the advice of the late Fidel Castro…. Chavez decided to fix the exchange rate in
order to keep the whole economy stable. Not only that, but he brought in a rule which
meant that if you wanted dollars you had to buy them from the government. And this is the moment where many argue Venezuela’s
economic time bomb started ticking because Chavez’s emergency economic plan is still
in place today. But for years this wasn’t a problem, as
the price of oil continued to rise, filling the government’s pockets. Jump forward to 2013 and El Commandante himself,
Hugo Chavez died. His former finance minister Nicolas Maduro
became president promising to keep Chavez’s economic legacy alive but a year later comes
the dramatic drop in the price of oil. So new president Maduro went to OPEC and tried
to convince the other members to cut production to help shore up prices but they couldn’t
agree. For years, Chavez’s legacy was all about offering subsidies to the poor, and in that time Venezuela overspent their oil revenue, so
within the 6 months of the price drop there was a huge shortage of dollars, essential
for the country to function. Because of the shortage the government refused
to sell their dollars unless it was absolutely necessary. In order to keep providing subsidized gasoline
and services in healthcare, housing and education the government pegged the official exchange
rate at 6 bolivars to a dollar. That led to a massive explosion in black market
currency trading… Less dollars meant its currency’s blackmarket
value shot up. So now there’s different prices in different
markets and many Venezuelans took advantage. So people would scam the government into selling
them dollars at the official exchange rate, for a holiday to America for instance, but instead of going abroad they would sell the dollars on the blackmarket for a much
higher price, making them a small fortune. Rather than accept currency market forces
the government kept its peg and continued to borrow and print more money. As a result, inflation soared. To hide how bad the economy really was becoming
the government stopped reporting inflation data but across the country the price of goods
continued to rise and price controls did little to help. Now, in 2016 Venezuelans are facing a situation
akin to the Weimar republic in Germany. Store owners are weighing money instead of
counting the notes. And not only going up in price but staples
such as rice, milk and consumer goods like toilet paper and condoms are also becoming
a rarity leading to people standing for hours in long-lines at stores. Under pressure to act, President Maduro has
brought in new measures… school days and office hours have been cut, borders have been
temporarily closed to stop smuggling, and the 100 bolivar note has been taken out of
service. And new higher denominated notes are being
introduced. Even more poignant: Christmas toys have been
seized from big retailers and distributed to the poor. Throughout the economic and political turmoil
of course, Venezuela is still exporting billions of dollars’ worth of oil, but it’s not
enough to help pay for the government’s ongoing subsidies. Some are hoping that OPEC’s recent agreement
to slash production will keep pushing oil prices higher – enough at least to ward off
the very worst of Venezuela’s economic problems, but most analysts agree the country needs
to diversify away from its reliance on a single commodity. And ultimately It’s up to the country’s
lawmakers to agree on how best to implement those much needed reforms in order to bring about change.

100 Comments on "What’s happening in Venezuela? | CNBC Explains"


  1. Everyone is saying it’s socialism’s fault obviously didn’t even watch the whole video

    Reply

  2. CNBC International not once mentioned socialism as the cause of the problem. Nor did they blame Chavez or Maduro instead they blamed the Arabs. CNBC sugar-coated this whole problem. If you truly want to understand Venezuela and what happened read Ayn Rand's Atlas Shrugged.

    Reply

  3. A socialist pig's leader's tough luck on oil market. His nation's oil revenue rose slower than inflation rate, his tummy grow faster n bigger than his brain cell, trouble begin to brew for him, while the people slowly begin to wake up to reality.

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  4. Hey Americans would Common Sense this is what's going to happen to our country if we keep the borders open if we keep putting the illegals on welfare we keep giving them driver's licenses and the right to vote even though they don't belong in our country it's going to happen here

    Reply

  5. CNBC is clearly pushing the same narrative as the Venezuelan ELITE – the ones whom are in reality responsible for two decades of chaos – as they don't want to give up enriching themselves on the back of the working class Venezuelans, through their MONEY LAUNDERING schemes. After Chaves and Maduro implemented laws which made it impossible for the elite's to launder money, the elite continued to launder their money abroad, mainly on their neighboring islands Aruba and Curacao. They build various MEGA shopping malls on these islands, which are empty of customers THE WHOLE DAY, but on paper they are selling more than Macey's in NYC !! Add to that, the economic boycott by the US – in response to getting pissed off after the Venezuelan president demanded that the foreign oil giants start paying a REASONABLE price for the oil that they are extracting out of Venezuela – and the chaos is complete. The problem is NOT being a socialist country – UK, FR, BE, GE and NL have a socialist structure and are all low on crime and are providing high quality healthcare for all their citizens – pls see American documentary 'Sicko' by Michael Moore – Main Stream Media want the average US citizen to believe that socialism can not be successful, because they want their citizens to remain a sheep to their CAPITALIST masters. CNBC nick-and-pick and is only showing the END RESULT of TWO DECADES of constant meddling by the US government, wanting to re-install a puppet president so that they can go back and extract the Venezuelan oil again for a nickel and dime – as they have been doing before Chavez came to power!

    Reply

  6. Didn't even watched this video. A year later and still a 💩hole nothing has changed. Still eat dogs and cats. Dumb ass socialist. praying for the good people there that aren't prideful and are godly and upright. 🙊🙉🙈

    Reply

  7. Really im feeling bad for Venezuela but i dont want to help them. Mail food and water. And we wash our hands.

    Reply

  8. Problem is one product economy…also socialism and dictatorship …yuk yuk.They need farmers and people planting gardens And a million refugees pouring out of country. Trade oil and roofing tar for corn and beans and soy oil….distribute these as free to every person by the state at least this would stave off starvation. And get the commies in charge to do chinese style and encourage small businesses. put market suply and demand back to work!

    Reply

  9. Leftists in
    2010: OMG! look at Venezuela, a perfect socialist utopia, we must follow their system in the US immediately REEE!
    2018: But… but… tHat iS nOt trUe sOciAlisM muh

    Reply

  10. You Treasonous Trumpturds can stop commenting. Putins boyfriend is not going to do anything. Release the Crackin!!! Oh i mean the pee pee tape.

    Reply

  11. Germany and Canada are socialist country. Everyone has health care. It is simple. We want the free education of modern day Germany and Trumpturds want the German of the 40s. My uncle fought you fascist in WW2.

    Reply

  12. Democrats love Marxism and seeing if fail in every country that implements it doesn't dissuade their love of Marxism. Democrats would love to turn America into a Marxist hell hole ! Democrats are very dangerous and the greatest threat to America ! Look at what they are doing to California.

    Reply

  13. Most of the good people have left.Now all you have is "chavistas" digging through trash bins.Hope they are happy 🙂 You have the country to yourselves,and all the trash bins you can get to.

    Reply

  14. This is prove that EVEN THOUGH you have the biggest oil production in the world, but your country can't manage it well so you start starving,

    Reply

  15. Its not socialism, its a deception! Capitalistic countries with welfare systems have socialism. Cuba, North Korea, etc are deceptions NOT socialism.

    Reply

  16. Socialists are funny. When Venezuela was getting rich, it was pointed out that it was the oil boom, and not socialist policies that buoyed the economy. "Wrong!" Claimed the Socialists, "It was the redistribution, the price controls and state takeovers which improved the country!" Then the oil price crashed and the Socialists were presented with what always happens with Socialism, sooner or later. "Wrong!" Claimed the Socialists. "It was the drop in oil prices!"

    Of course when the price recovered, and is now above where it was in 2003, Venezuela is still further in its crisis with even more hunger, inflation, crime and shortages. So the Socialists claim "Um….it's corruption! It's foreign interference!" Anything but their beloved failed doctrine.

    Reply

  17. Dammit!! We know what is happening. How do we fix it? What's gonna happen when it does collapse? Huh? Starvation on a massive scale, disease's, how about sanitation issue's? Huh???

    Reply

  18. Almost 2 years later:
    "We" do not fix it. They voted for massive free social programs. Then they stole productive work. They are now broke.
    So, you voted for Chavezmo and slogans.
    Now, all you have is the social programs, slogans, and rationed food, you can not afford.
    That defines Maduro-mo.
    So you fix it.
    Other S.A. counties could help, but the USA must stay out.

    Reply

  19. Oh my…. What are they thinking???? They have the oil, what happened? First to blame, the people and then domino effect…. haist…. 😔

    Reply

  20. Malaysia will become the next Venezuela after the 93 year old dictator Mahathir wins power again in 2018. He was Prime Minister from 1981 to 2003 and now again in 2018. He is abusing his power by arresting opposition leaders and appointing positions and business to his cronies again. He is also preparing his son to be PM someday. His son is the Kedah state Chief Minister. Once the oil prices drop again, Malaysia economy will fall to its knees as they have cancel GST and foreign investors are running away.

    Reply

  21. Well that's what they're doing or trying to create a Utopia as they say and this Utopia is not going to benefit the quote-unquote poor people but the so-called rich people and those who believe they are privileged and highly above all the other races on the planet.

    Reply

  22. I live in Venezuela. I have lived in Venezuela for 32 years now. Excuse me but I remember the 1980's and the 1990's when Venezuela was HELL ON EARTH.

    I PERSONALLY PREFER THIS VENEZUELA TO THE OLD VENEZUELA.
    More than 90 percent of businesses are PRIVATELY owned in Venezuela which makes Venezuela A CAPITALIST country with socialist programs for the poorer Venezuelan majority. Simple.

    Reply

  23. Democrats want this it's a license to steal. Socialism has never been viable it always turned into a dictatorship and failure. My advice to Venezuela is use the second amendment human right and take out a corrupt government. Get guns and use them. What have you got to lose they took you life savings so they could live rich. I would be pissed

    Reply

  24. They want to make an excuse to invade Venezuela so the shadow government, CFR are using socialism. They are paying people to come to the websites and claim it is Socialism. They own the media and so when the USA gets ready to invade they are going to claim Socialism and it will appear all over the television as a cover story. When the economy in Venezuela gets bad due to sanctions they use socialism as a cover story to be displayed on television. Sometimes they use false flags. The united states is controlled by bankers who have taken over the production of money.

    Reply

  25. Maduro just doesn't have what it takes to run a country. He needs to find a way to assemble a team of competent talents of Venezuela origin who honestly want the best for their own country instead of playing politics for self interest. He should realize what works for China does not necessarily work for Venezuela. For starter, the Chinese leadership, comprising mostly trained engineers, are Communist in name only. The "Chinese model" is a hybrid of multiple "isms." What exactly it is nobody knows for sure. (The talking heads on tv pretend they know, but they don't.) The professors that will be teaching the "Chinese model" in Ivy League schools are yet to be born, as the model is still evolving. So find your own way. Good luck.

    Reply

  26. Hugo Chavez destroyed this nation. He was just lucky to have died before the damage caused by his policies showed and managed to escape blame. To make a long story short Hugo Chavez nationalized large parts of the economy. Basically he took the private assets of corporations and declared them government owned. In the short term while oil prices were high this improved the lives of the poor. But this action made the economy entirely dependent on the price of oil. The excess profits from oil were used to fund many social welfare programs.

    Once oil prices dropped those programs ran out of funds and the people had already developed a dependency on those programs. Further because Chavez had nationalized private assets foreign investors were too scared to invest in Venezuela as they feared their assets being seized. Also rich people in Venezuela saw their government seize private assets and began divesting from Venezuela and moving their wealth to countries where the government won't declare your assets state property. These factors taken together have created this mass starvation

    I am a liberal and generally believe in providing social assistance to the poor, but you can't go this far. Chavez went way too far and now his country suffers.

    Reply

  27. The biggest problem in Venezuela is one that almost all nations, especially the less socially advanced ones, are facing: dumb, uneducated people reproduce at much higher rates than intelligent people.

    Reply

  28. BAAAAAAD!!!!!!!!!!!!!!!! Socilaists>>>>>>> ALL!!! their fault……………………….instead in good ol' 'MURICa we gave the wankers OOOOPs! Sorry<<>> the BANKERs 100s of $BILLIONs of FREE no repay $$$$……………hmmmmm…………………seems to me JOE 6 PACk gets screwed everywhere!!!

    Reply

  29. G0 Trump😎 democrats tax and spend does not work go Republicans cut government I know what to do with to do with the little money the government let's me keep. 🗼😄🤣🌀red wave

    Reply

  30. Image if the US president right now is a Bus Driver instead of a random successful billionaire dude what would happen

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  31. What did Venezuela do with all their oil money, the rich got richer and the criminals got theirs to and the citizens of Venezuela got the shaft.

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  32. Everything is so bad. If we compared November 2017 with November 2018 everyhing is wrong, a inflation of 8.000+.

    I borned, grow up and live in Venezuela, make questions if you want.

    Reply

  33. When I saw it was CNBC, I knew it was not worth viewing. See http://www.insidesources.com/socialism-in-the-end-is-slavery/ and comments, especially the eingriff comment with references.

    Reply

  34. We need another Castro and Chavez ! Impeach Madurai now! 👍👍👍👍👍👍👍❤️❤️❤️❤️❤️❤️❤️❤️❤️

    Reply

  35. Socialism is a wrong thinking… And China is nothing but money driven country… And I see the countries ever heavily influenced by Russia is Muffia only except China…… Thanks…. Make usa great again…. Go trump go..

    Reply

  36. Taking economic advice from Fidel Castro was not the first mistake. It might not have been the biggest mistake, but it sure was way on up there.

    Reply

  37. Starting in 2014, the Kingdom of Saudi Arabia flooded the market with cheap oil. This is not a mere business decision, but a calculated move coordinated with U.S. and Israeli foreign policy goals. Despite not just losing money, but even falling deep into debt, the Saudi monarchy continues to expand its oil production apparatus. The result has been driving the price of oil down from $110 per barrel, to $28 in the early months of this year. The goal is to weaken these opponents of Wall Street, London, and Tel Aviv, whose economies are centered around oil and natural gas exports.

    And Venezuela is one of those countries. Saudi efforts to drive down oil prices have drastically reduced Venezuela’s state budget and led to enormous consequences for the Venezuelan economy.

    At the same time, private food processing and importing corporations have launched a coordinated campaign of sabotage. This, coupled with the weakening of a vitally important state sector of the economy, has resulted in inflation and food shortages. The artificially low oil prices have left the Venezuelan state cash-starved, prompting a crisis in the funding of the social programs that were key to strengthening the United Socialist Party.

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  38. "I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.” ― Smedley D. Butler, War is a Racket: The Antiwar Classic by America's Most Decorated Soldier.

    Reply

  39. In 2011, it became apparent that Muammar Gaddafi in Libya was attempting
    to develop a currency that can compete with the Dollar or the Euro. 
    The International Monetary Fund estimates Libya has 144 tons of gold
    currency (the gold Dinar) in its vaults.  An oil rich country like Libya
    is much less likely to enter a contract in which the currency they
    receive in exchange for their oil; due to the likelihood that the
    currency will quickly depreciate in value rendering long term savings
    obsolete.  Knowing an oil rich nation would not accept a depreciating
    currency in exchange for oil and natural gas, the U.S. government had
    every incentive to assist the rebels in Libya’s 2011 civil war.

    Reply

  40. Gadhafi’s plan
    to quit selling Libyan oil in U.S. dollars — demanding payment instead
    in gold-backed “dinars” (a single African currency made from gold) — was
    the real cause. The regime, sitting on massive amounts of gold,
    estimated at close to 150 tons, was also pushing other African and
    Middle Eastern governments to follow suit.

    Reply

  41. Maybe Chavez and Maduro really want to help all Venezuelans, but they are just lack of knowledge that they do not know. Their stubbornness also is the culprit. Hope this will give a lesson to all leaders of the world.

    Reply

  42. THE BACKGROUND MUSIC DOES NOT MATCH THE TONE OF WHATS REALLY GOING ON IN VENEZUELA. THIS ISNT SOME HAPPY INFOMERCIAL. HAVE SOME RESPECT! PEOPLE ARE SUFFERING AND LITERALLY DYING THERE. 🤦🏻‍♂️

    Reply

  43. CNBC Explains ? That's laughable !I HAVE THE BEST SOLUTION EVER FOR THIS. The people there do not hate us ! They hate the fact that their corrupt government shoved socialism down their throats ! Socialism destroys countries. All it does is make the government rich and corrupt! While their people suffer through poverty and starvation. Free health care free every thing !That's how they sell it . SOUND FAMILIAR? Democrats are trying to do the same in America . So here's the obvious fix : Fully welcome refugees from Venezuela. All of them! Then round up all these democrat idiots and ship them to Venezuela . Never to return!!!! They love socialism so give it to them. PROBLEM SOLVED !

    Reply

  44. I feel for the Venezuelans. They got fooled by Hugo Chavez. Chavez made decisions that favored an oligarchy at the expense of the masses. I’m American(USA). The U.S. dollar lost a great deal of value when taken off the gold standard in 1971. World history matters. It’s a shame. I think Venezuela is pretty and it’s people looking for a better life are very nice. The leadership truly fleeced them.

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  45. For all these idiots complaining of socialism, if they didn’t help out a lot of those people a lot of children would have starved to death. Whether you like it or not, millions of people can’t work, are disabled or have no access to education. They need fucking help. Dumb conservative Trump dick suckers.

    Reply

  46. That's correct Hugo Chavez and Maduro let the Venezuelans rely on money and social welfare to keep people on their side
    while the country's GDP was diving at unprecedented scale Maduro relied heavily on oil but the oil business is very unpredictable
    now his blaming the US

    Reply

  47. Its an attempted coup.certainly not the first time we(the us) tried this there.they have lots of resources that we want cheap,bottomline!!!

    Reply

  48. off course this US propaganda machine CNBC won't talk about the affect that US sanctions are having on Venezuela

    Reply

  49. They have never known anything other than buying in the supermarket they
    have never learned how to grow vegetabels for themselves. And why they got unlearned? because the capitalists want them to constrain using their money

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  50. They have never known anything other than buying in the supermarket they
    have never learned how to grow vegetabels for themselves

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  51. US and the elite white Venezuelans is the part of their problems……..Go check " the Jimmy Dore show " on Venezuela with the BBC reporter named Greg Palast.

    Reply

  52. this is what democrats here in the usa want-to be like venezuela. socilisim will always leave a country like this. without capitalism no one has a job norhave money and starve-a country can not put people on government help for long because thisis what happens. if any reader here is a liberal democrat then put yourself and family in these peoples posicion. watch your kids starve

    Reply

  53. the people want every really made they don't want to work so they vote for this now oil prices fall they suffer similar situation always try to take place in my country but it never get to happen

    Reply

  54. The world is almost done ,problems in every corner of the world, there's no real people anymore,,we have gangs ,the most uneducated society,,kids having babies then talking about going to college ,rulers are enjoying seeing people starve to death, war over oil,,it's legal for same sex marriage,,it stinks

    Reply

  55. What's happening in Venezuela will happen in California..good job liberal socialist Democratic party

    Reply

  56. Countries like India can help Venezuela by buying their oil , but it is the U.S sanctions which is stopping them , I clearly see U.S as the devil

    Reply

  57. China is there to help them out…US just causes HAVOC around the world by using its BULLY tactics…GREEDY YANKS.

    Reply

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