Question

Please read Case 2: “Venezuela under Hugo Chávez and Beyond” available in INTERNATIONAL BUSINESS e-book (page no.611), and answer the following questions

4. During the Chávez years, many foreign multinationals exited Venezuela or reduced their exposure there. What do you think the impact of this has been on Venezuela? What needs to be done to reverse the trend?

5. By 2016, Venezuela’s economy appeared to be on the brink of total collapse. What do you think needs to be done to reverse this?                                         

Answer 1

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During the Chávez years, many foreign multinationals exited Venezuela or reduced their exposure there. What do you think the impact of this has been on Venezuela? What needs to be done to reverse the trend?

As a result of many foreign multinationals exiting or reducing their exposure in Venezuela, the country became more corrupt because the government was presented with more opportunities to take control of different aspects of the economy. More companies were being taken over and run by the government than privately run, leading many people to fall into poverty. To reverse this trend, the government needs to fall back from its role in operating businesses and allow for foreign companies or privately own business to operate independently and correctly.

By 2016, Venezuela’s economy appeared to be on the brink of total collapse. What do you think needs to be done to reverse this?  

I believe that in order to reverse the fall of Venezuela’s economy, the government needs to control less aspects of the economy. An economy needs to run freely with fair rules in regulations in order to be successful, and total biased control over an economy will only benefit those in charge. The government needs to control less businesses/prices and allow for foreign trade/investments to take place.