Venezuela: Four Exchange Rates Distorting Economy –

Surely, building up a functioning economic system with effective industries other than the oil sector is very difficult for a so called “petro state” like Venezuela. Simple enough, it is just cheaper and easier to live on the oil revenues and import the greatest part of the needed goods – be it food, pharmaceuticals or spare parts – than producing that oneself. However, whereas the described phenomenon called Dutch disease earns some merit in explaining the Venezuelan situation, it can certainly not explain the severity of the economic problems in the country. More…