Venezuela

Venezuela once enjoyed the status of an upper-middle income country in the global hierarchy. In 1988, the country's gross domestic product (GDP) was approximately US$58 billion, or about US$3,100 per capita (Haggerty, 1993, p. 81). Blessed with an abundance of natural resources, Venezuela's relative prosperity ground to a halt during the 1980s. Previously spurred by handsome revenues from petroleum and the oil crisis during the 1970s, the Venezuelan economic bubble burst when oil prices tumbled during the 1980s, a downturn for which the country was ill-prepared: " . . . Venezuela squandered much of its newly found revenues through poor economic management, corruption, and over-ambitious development projects" (Haggerty, 1993, p. 128).

At one time, Venezuela's natural resources accounted for more oil reserves than any other nation in the Western Hemisphere. It was third only to Saudi Arabia and Iran as an exporter of oil and was the world's ninth largest oil producer (Haggerty, 1993, p. 81). Despite attempts to diversify its indus

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iven the fact that so many Venezuelans are employed in this sector. The IMF strategy for Venezuela has changed little in the past seven years. In 1989, when Venezuela received a credit tranche purchase from the IMF, the agency outlined the following economic strategy: "The country's comprehensive reforms include far-reaching structural measures designed to improve economic efficiency and spark a supply response through market incentives . . . trade liberalization, exchange reform, market-determined interest rates, and greater price flexibility" (U.S. Congress, 1991, p. 68). Other objectives were diversification of the economy and the protection of the poor. The IMF envisioned that spending would be cut on major investment projects and that social services funding would be increased. Labor intensive projects, however, would be promoted so that the working class would realize economic benefits from the injection of IMF funds. Unfortunately, the economic objectives outlined by the IMF have not been realized in Venezuela. Economically, the country is in a precarious position. Unless it abides by the conditions placed on IMF credit assistance, the country faces default on its debt. The government has recently placed about $
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Approximate Word count = 3975
Approximate Pages = 16 (250 words per page)

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