Economic policy of the Nicolás Maduro administration
When elected in 2013, Nicolás Maduro continued the majority of existing economic policies of his predecessor Hugo Chávez. When entering the presidency, President Maduro's Venezuela faced a high inflation rate and large shortages of goods[1][2][3] that was left over from the previous policies of President Chávez.[4][5][6][7] These economic difficulties that Venezuela was facing were one of the main reasons of the current protests in Venezuela.[8] President Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples, and often said he was fighting an "economic war", calling newly enacted economic measures "economic offensives" against political opponents he and loyalists state are behind an international economic conspiracy.[9][10][11][12][13][14] However, President Maduro has been criticized for only concentrating on public opinion instead of tending to the practical issues economists have warned the Venezuelan government about or creating any ideas to improve the economic situation in Venezuela such as the "economic war".[15][16]
In 2014, Venezuela's economy entered a recession with its economy contracting by 4.8%, 4.9% and 2.3% in the first three quarters.[17] That year, Venezuela topped the Global Misery Index, which is based on inflation, unemployment, and other economic factors.[18] In December 2014, it was stated that Venezuela had a 93% chance of being in default,[19] while it has also been noted that the government has never failed to meet the country's foreign-debt obligations.[15]
In 2015, Venezuela again topped the Global Misery Index and was expected to have its economy contract 7% according to the World Bank.[20][21] The inflation rate also reached its highest rate in Venezuelan history.[22]
In 2019, Maduro started allowing transactions in U.S. dollars, a much more stable currency which is also used for international money transfers. People in Venezuela receive about $3.5 to $4 billion per year in remittances from family members; this change allowed Venezuelans to spend that money and started an economic recovery.[23]
Economic indicators[edit]
Business environment[edit]
The business environment in Venezuela during the beginning of Maduro's tenure was poor according to multiple organizations.[65][69][76] In his first year as president, 77,839 business closed with according to the government's National Statistics Institute (INE).[77] The loss of 173,000 Venezuelan jobs was allegedly due to the implementation of Maduro's Organic Law of Fair Prices according to the president of the Business and Trade Union Services Zulia (UCEZ), Gilberto Gudino Millan, because it supposedly prevents the free development of the private sector.[77] In 2014, President Maduro also created "a freeze on commercial rents at rates more than 50 percent lower than they had been at some malls" which resulted with Venezuela's malls and retail industry losing 75% of their incomes.[78]