12/25/2019 Analyzing Venezuela's Oily Hyperinflation Story | Case Study - Learning IRL By ABGLP - InsideIIM

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Analyzing Venezuela's Oily Hyperinflation Story | Case

Study - Learning IRL By ABGLP
Imagine this: you the common man or woman, is struggling to buy daily rations and
2 meals a day. Everything from soaps, to the internet seem out of your financial
effort zone, because everything is expensive. While you struggle to make the 2 ends
meet, your country’s president visits with international communist and socialist
leaders and makes impossible deals with other countries in a bid to buy political
clout and show off his power. Your nation’s greatest natural resource, a matter of
pride for many, the natural oil wells in your country, are used as a political tool by
the president to gain public support and stay in office. Meanwhile, you wait in a
long line to convert pesos into dollars so that you can pay an exorbitant amount for
a cup of coffee. Sounds morbid right? But this is exactly what happened and is
happening in Venezuela. Hyperinflation has the country in its vice like grip. Once
known as the pioneer in oil mining and policy across the world, today Venezuela
has fallen on harsh times. How did this happen. Check out the case study below
and answer the following questions to understand Venezuela’s situation.This is a
part of the Learning IRL series brought to you by ABGLP.

Based on key information and data provided in this case study, analyse
Venezuela's Oily Hyperinflation Story (https://insideiim.com/venezuelas-oily-
hyperinflation-story-case-study-learning-irl-by-abglp?src=comm) and answer the
following questions:

If you were a PDVSA executive, assuming a corrupt official would not be the
President, what strategies would you put in place to bring PDVSA out of debt?
What economic and social factors do you think are the main reasons for
Venezuela’s poverty?
If you were working at a financial institution in Venezuela before and after the
strike, what advice would you give your customers regarding personal
finance?
How would you solve Venezuela’s poverty? What measures would you
implement to revive and bring back Venezuela’s economy?
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2 months ago

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Prateek Gupta (/Author/Prateek_gupta_21)

Alumni | Indian Institute Of Management Lucknow

Few points that Venezuela need to focus to get its golden hat back again

• Oil Expoloration Policy: Change the oil exploration policy so that big oil exploration company
can feel that their investment are safe and they can bring new technolgies to explore oil in
Venezuela.

•Revenue or Profit sharing program: The PDVSA can share the revenue/profit based on oil output
from the fields and spend some portion of those profit for social causes.

♦ Too much socialism and dependence on oil led to the Venezuela in poverty, Venezuela need to
diversify in argiculture, manufacturing information technology and tourisim based economy.

• Spending and Saving both at same time. Buy dometic product to help economy to boost and save
so that country can spend on infrastructure projects. Socialism will help in short run people need
to work hard to leave country in glory for new generation.

•Venezuela’s economy need boost. Privatization of some oil fields to get the initial funds to get
started and bring new technology, open new sectors for large MNC to invest and bring funds.

2 months ago

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