Question

How imports and exports due to hyperinflation in Venezuela differ from the standards in the US.

Answer 1

Venezuela's economy is largely based on the petroleum sector and manufacturing In 2014, total trade amounted to 48.1% of the country's GDP. Exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of those exports.Venezuela is the sixth largest member of OPEC by oil production. Since the 1920s, Venezuela has been a rentier state, offering oil as its main export.From the 1950s to the early 1980s, the Venezuelan economy experienced a steady growth that attracted many immigrants, with the nation enjoying the highest standard of living in Latin America. During the collapse of oil prices in the 1980s, the economy contracted the monetary sign, commenced a progressive devaluation and inflation skyrocketed to reach peaks of 84% in 1989 and 99% in 1996, three years prior to Hugo Chávez taking office. The nation, however, has experienced hyperinflation since 2015 far exceeding the oil price collapse of the 1990s.

Venezuela manufactures and exports heavy industry products such as steel, aluminum and cement. Production is concentrated around Ciudad Guayana, near the Guri Dam, one of the largest dams in the world and the provider of about three-quarters of Venezuela's electricity. Other notable manufacturing includes electronics and automobiles as well as beverages and foodstuffs. Agriculture in Venezuela accounts for approximately 4.4% of GDP, 7.3% of the labor force and at least one-fourth of Venezuela's land area Venezuela exports rice, corn, fish, tropical fruit, coffee, pork and beef. The country is not self-sufficient in most areas of agriculture.

In spite of strained relations between the two countries, the United States has been Venezuela's most important trading partner. American exports to Venezuela have included machinery, agricultural products, medical instruments and cars. Venezuela is one of the top four suppliers of foreign oil to the United States. About 500 American companies are represented in Venezuela.According to Central Bank of Venezuela, between 1998 and 2008 the government received around 325 billion USD through oil production and exports in general.According to the International Energy Agency (as of August 2015), the production of 2.4 million barrels per day supplied 500,000 barrels to the United States

Since the Bolivarian Revolution half-dismantled its PDVSA oil giant corporation in 2002 by firing most of its 20,000-strong dissident professional human capital and imposed stringent currency controls in 2003 in an attempt to prevent capital flight there has been a steady decline in oil production and exports and a series of stern currency devaluations, disrupting the economy.Further yet, price controls, expropriation of numerous farmlands and various industries, among other disputable government policies including a near-total freeze on any access to foreign currency at reasonable "official" exchange rates, have resulted in severe shortages in Venezuela and steep price rises of all common goods, including food, water, household products, spare parts, tools and medical supplies; forcing many manufacturers to either cut production or close down, with many ultimately abandoning the country as has been the case with several technological firms and most automobile makers In 2015, Venezuela had over 100% inflation—the highest in the world and the highest in the country's history at that time According to independent sources, the rate increased to 80,000% at the end of 2018 with Venezuela spiraling into hyperinflationwhile the poverty rate was nearly 90 percent of the population.On 14 November 2017, credit rating agencies declared that Venezuela was in default with its debt payments, with Standard & Poor's categorizing Venezuela as being in "selective default"

Venezuela has the world's largest proven oil reserves, totaling 302,81 billion barrels at the end of 2017. The country is a major producer of petroleum products, which remain the keystone of the Venezuelan economy. The International Energy Agency shows how Venezuela's oil production has fallen in the last years, producing only 2,300,000 barrels (370,000 m³) daily, down from 3.5 million in 1998. However, the oil incomes will double its value in local currency with the recent currency devaluation. Venezuela has large energy subsidies. In 2015, the cost of petrol was just US$0.06 per gallon, costing 23% of government revenues  In February 2016, the government finally decided to raise the price, but only to 6 bolivar (about 60¢ at the official rate of exchange) per litre for premium and just 1 bolivar (10¢) for lower-grade petrol.

A range of other natural resources, including iron ore, coal, bauxite, gold, nickel and diamonds, are in various stages of development and production. In April 2000, Venezuela's president decreed a new mining law and regulations were adopted to encourage greater private sector participation in mineral extraction. During Venezuela's economic crisis, the rate of gold excavated fell 64.1% between February 2013 and February 2014 and iron production dropped 49.8%.

Venezuela mostly utilizes hydropower resources to supply power to the nation's industries, accounting for 57% of total consumption at the end of 2016. However, persistent drought has severely reduced energy production from hydropower resources. The national electricity law is designed to provide a legal framework and to encourage competition and new investment in the sector.^{[citation needed]} After a two-year delay, the government is proceeding with plans to privatize the various state-owned electricity systems under a different scheme than previously envisioned