Default in Venezuela Informative Speech Outline
Upcoming Default in Venezuela
The recent economic investigations show that the economy of Venezuela is as close to default as it has never been before. The rating agency known as Moody’s has reported that this country is rated as Caa3, which is an indication that the next step in the economy would be total collapse. Thereafter, the objective of the following paper is to speak about the crisis that hit Venezuela and seems not to be ending soon.
- Many economists state that the two main reasons which have contributed to the possible collapse are oil pricing and inadequate foreign reserves.
- The problem that is related to balance of payment is very disturbing, as price drop in oil market has caused serious currency fluctuations. The oil price is 40$ per barrel, which is far from being enough to cover the production cost. Before it was 100$ per barrel.
- Foreign exchange inflows of Venezuela are much lower than its outflows and the reserves of the US are close to hitting the bottom level.
- The root cause of the problem is the domestic economy policies.
- Budget deficit of Venezuela was 17% in 2014 and is getting bigger due to oil price drop. Inflation and shortages of many goods are the repercussions.
- Shortages of basic products such as milk, soap and toilet paper have become common in Venezuela.
- The government enforced certain regulations that stop people from queuing and buying all out.
- Unfortunately, the President received no loans from China and no support from oil world producers about decreasing the production.
- Opposition leaders has used this as an opportunity to ask people to “get out on streets and mobilize” (Coppola, 2015).
In conclusion, it is important to mention that the government of this country has been leading it to collapse for many years as economic, fiscal and political crisis is the result of wrong policies and strategies. It seems that the collapse in inevitable.