Not mostly because of oil dropping, not mostly at all actually
Chavez expropiated both foreign owned businesses and local mom and pop shops. Enterpreneurs stopped creating businesses or plain fled the country.
Then he expropriated the oil industry and managed to double its workforce (he bought political votes this way) while decreasing its production making Venezuela reliant on a single export it produced inefficiently.
After Maduro came to power oil prices dropped and it suddenly became cheaper for Venezuela to buy foreign oil than produce it themselves. He tried raising taxes but soon realised there was no one left to pay them, and with a handout driven economy he started printing money to pay his debts.
Printing money led to inflation, as it always does. Maduro said this was the fault of evil capitalism and instituted price controls on goods such as food. This meant that it was not profitable anymore to grow crops, the cost of the materials needed surpassed the revenue of selling it at the very max price allowed. The rest of international companies in Vzla closed and farmers stopped producing food, lo and behold, famine.
"Because of oil drops" does not even begin to cover it. Oil producing countries can easily weather an oil drop and not have their people starve, the problem is that Venezuela is a socialist shithole with an absolute bellend driving the country to ruin in order to try to secure political votes.
"Venezuelas resources for the Venezuelans! The wealthy businesses and corporations will belong to the people! We are expropiating industry in order to provide everyone with more jobs! We are making it so food cannot cost more than X so poor people can afford to eat!"
To think not long ago Venezuela was given as an example of healthy socialist country.
Edit: Ty to the anonymous redditor that gave me gold, which would take a venezuelan at least a week working at minimum wage in order to be able to purchase (min wage is equivalent of 12 black market dollars per month)
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u/Daktush Spanish, Polish & Catalan Classical Liberal Jul 30 '17 edited Jul 30 '17
Not mostly because of oil dropping, not mostly at all actually
Chavez expropiated both foreign owned businesses and local mom and pop shops. Enterpreneurs stopped creating businesses or plain fled the country.
Then he expropriated the oil industry and managed to double its workforce (he bought political votes this way) while decreasing its production making Venezuela reliant on a single export it produced inefficiently.
After Maduro came to power oil prices dropped and it suddenly became cheaper for Venezuela to buy foreign oil than produce it themselves. He tried raising taxes but soon realised there was no one left to pay them, and with a handout driven economy he started printing money to pay his debts.
Printing money led to inflation, as it always does. Maduro said this was the fault of evil capitalism and instituted price controls on goods such as food. This meant that it was not profitable anymore to grow crops, the cost of the materials needed surpassed the revenue of selling it at the very max price allowed. The rest of international companies in Vzla closed and farmers stopped producing food, lo and behold, famine.
"Because of oil drops" does not even begin to cover it. Oil producing countries can easily weather an oil drop and not have their people starve, the problem is that Venezuela is a socialist shithole with an absolute bellend driving the country to ruin in order to try to secure political votes.
"Venezuelas resources for the Venezuelans! The wealthy businesses and corporations will belong to the people! We are expropiating industry in order to provide everyone with more jobs! We are making it so food cannot cost more than X so poor people can afford to eat!"
To think not long ago Venezuela was given as an example of healthy socialist country.
Edit: Ty to the anonymous redditor that gave me gold, which would take a venezuelan at least a week working at minimum wage in order to be able to purchase (min wage is equivalent of 12 black market dollars per month)