Policies that Will Solve the Venezuelan Economic Crisis

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Policies that will solve the Venezuelan Economic Crisis
Introduction
The Venezuelan economy is based on the export and production of oil. The dependence of Venezuela on oil alone was nationalized in 1975, creating a state company. It is estimated that 95% of Venezuelan revenues comes from oil. The Maduro leadership took over an economic crisis created by Hugo Chavez’s government. Chavez’s policies involved industries that used the state revenue to pay for social welfare, hence failed to save for difficult days (Council on Foreign Relations). On the other hand, this discouraged private investors that could have diversified the nation’s income. The result was an economic crisis that has made the living conditions for the Venezuelans deplorable and effective measures need to be developed to improve the situation.
Markets and States - Robert Bates
There are various policies initiated by the author to curb the problem. Notably, the author advises the Venezuelan government to diversify on its income earners. To be able to generate income on a higher level, the Venezuelan government needs to diversify its policies to either engage in manufacturing, industrial sectors, or cash crops for exports (Bates 11). Furthermore, offering state capitalism will help divert capital into the agricultural industry that can well be compared to the Nigerian economy. The government could invest in potential industrial projects that are financed by private individuals (Bates 20). Furthermore, the Venezuelan government can use this form of policies to stabilize the economy as this type of cooperation assists in receiving bulk finances from the marketing board. These funds can be diverted to promote various industrial projects in the country that in turn can create employment (Bates 21). Venezuela is considered to be one of the leading oil exporters in the world. Although it is in an economic crisis, Venezuela should raise its fuel prices to devalue its currency. The move, in turn, would boost various measures to enable the failing economy. The Bank of America estimates that there exists a public sector gap that included various payment involving the debt of about $24 billion. It is estimated that the Venezuelan government may have an estimated $60 billion worth of assets that it can sell in the market (Bates 20). The move will help the country close the gaps in the economy and provide a foundation for growth in the future.
The proposed policies may not be outright effective as the Venezuelan economy is estimated to have economic imbalances that need adjustment. Bates highlights that the first task would be to offer and environment that is conducive for work for the Venezuelans. An effective workforce will mean setting up a system that will ensure that the policies will work. The administrative power of the Venezuelan government is key to ensure policies work. The Venezuelan government has proved that it has the administrative policies and capacity to administer elections. During the past year, the country had a significant reduction of the capital flight, which had amazing incentives under the exchange rates. Venezuela also had funds that ensured that citizens access...