A Closer Look to the Rates of Unemployment and Population in

Venezuela: Exploring the Current Economic Landscape

A Country Review

Midterm Examination in:

Political Economy

Submitted by:

Mahinay, Pamela N.

Submitted to:

Ms. Vibeli Hermano

 Every nation's economic strategy includes employment creation as a major element to

provide different economic opportunities for the people and for the country’s productivity and

stability. Given the economy line of Venezuela in terms of exporting their wide resources of

oil and other non-renewable reserves globally, there’s also other factors that affect its

competency in economic growth such as the job opportunities. High rates of unemployment

reflect the workforce sector's inability to accommodate the growing manpower, which typically

results to economic downturn.

For the last 10 years, the Venezuelan economy has been in the state of collapse and this

includes the unemployment rate of Venezuela in 2013 that shows its downfall due to different

factors. Below is the data presented from 2010-2021 regarding the unemployment rate.

As we can see on the graph presented, the unemployment rate in Venezuela in the year

2013 was estimated to be around 7.5%, where it was the highest recorded percentage from

2010-2021 according to data from the International Labor Organization (ILO).

Several factors contribute to the grounds of high unemployment rate of Venezuela. One

of these is the nation's reliance on oil exports as its main source of income is one of the main

issues. Venezuela has one of the largest oil reserves in the world, but due to government

mismanagement of the sector and declining oil prices globally, output has declined and
revenues have decreased. This has had a knock-on effect on other economic sectors, resulting

in job losses and layoffs. The complexities and costly labor restrictions of Venezuela are

another factor raising the unemployment rate there. Due to the high costs of workforce, many

companies find it difficult to hire and fire workers. This makes it challenging for enterprises to

remain competitive. Due to this, investments have fallen and the private sector has shrunk,

which has made the unemployment issue worse.

In addition, migration caused a decrease in the number of workers available to fill

positions, leading to a lack of employees in many industries that significantly affect the

unemployment rate of Venezuela in 2013. As a result, a lot of industries experienced a lack of

employees particularly in a healthcare and educational institutions.

The data provided above presents the number of Venezuelan immigrants in other

countries particularly in United States according to the Migration Policy Institute (MPI) which

constitute for the out-migrants in Venezuela in 2013-2015. It shows the outflow of people from

Venezuela due to country's migration which impacted the unemployment rate. However, this

case is complex and multifaceted, and also depends on a range of factors, including the skill

levels and demographics of the emigrants, as well as the overall state of the domestic labor

market.
 In addition to these structural factors, the political instability and social unrest such as

presidential election protests happened in 2013 that have characterized Venezuela in previous

years also have contributed to the high unemployment rate. The country has been mired in a

deep economic and political crisis, marked by hyperinflation, shortages of basic goods, and a

collapse of public services. This has led to widespread protests and uprisings, which have

further hampered economic activity and extended to job losses.

In summary, a number of causes, such as the nation's reliance on oil exports, restricted

labor regulations, migration, political instability, and social unrest, were implicated in

Venezuela's high unemployment rate in 2013.

EMPLOYMENT SITUATION IN VENEZUELA AND IT’S NEIGHBORING COUNTRIES

Colombia and Brazil are neighboring countries of Venezuela in South America. These

nations may be geographically close together, but their economic situations are very diverse

and the employment situation is one of its proofs. As Venezuela has recently struggled with

high rates of unemployment as a result of its economic policies and reliance on oil exports,

strategies favoring economic growth and job creation have been implemented in Colombia and

Brazil for the mean time to aid the rising unemployment rates. Now, let us compare and contrast

the employment situation in Venezuela, Colombia, and Brazil, highlighting the factors that

contribute to the differences observed.

 Based on the data provided in 2013, Colombia has the highest unemployment rate

among the three countries followed by Venezuela and Colombia was the last.

Colombia

The unemployment rate in Colombia in 2013 was 8.9%, which was higher comparing

to other nations in the region, such as Brazil. In 2013, a significant informal sector, income

inequality, and the impacts of the global economic slump all had a role in Colombia's high

unemployment rate. A sizable section of Colombia's workers was employed in the so-called

"informal economy," which encompasses jobs that are not vulnerable to official regulation or

taxation. The low benefits and generally unstable nature of this industry contribute to the high

unemployment rate in the nation. Another one is the Gini coefficient, which measures income

disparity and raises hurdles for people with lower incomes to enter the job market. Last but not

least, Colombia's economy, notably its export sector, was significantly impacted by the

worldwide economic downturn that started in 2008. There were more layoffs and greater

unemployment rates as a result of the decline in demand for Colombian products and services.

However, the Colombian government took action by making investments in technology,

education, and infrastructure to draw in foreign capital and open up new job opportunities for

Colombians.

Venezuela

The fact that Venezuela was overly dependent on oil exports, which made up a

substantial amount of the country's GDP, became one of the main causes of the declining

employment rates in 2013. The Venezuelan economy suffered a significant impact in 2013 due

to the global economic recession and falling oil prices, which led to job losses. Another issue

was the government's economic policies, which mainly relied on government interference in

the economy and the nationalization of different sectors of the economy. As a result of this
policy's failure to promote both domestic and international investment, Venezuelans had less

chances for employment in the private sector.

Brazil

With a rate of 5.4%, Brazil has the lowest unemployment rates among the three nations

being contrasted. It was ascribed to the government's plans for increasing employment

opportunities and economic expansion. The government made investments in social welfare,

education, and infrastructure in order to combat poverty and inequality, which helped to

stabilize the labor market. Moreover, due to its participation of the 2016 Summer Olympics

and the 2014 FIFA World Cup, the nation had an employment boost. However, Brazil started

experiencing certain economic difficulties, such as high rates of inflation, wherein the

government tried their best to address.

To sum it up, Venezuela has long struggled with a high unemployment rate. The issue

has been made worse by the country's ongoing economic and political crises, which began in

the middle of the 2010s and has resulted in greater rates of unemployment and

underemployment. The country's economic policies, political instability, the human crisis,

migration, inflation, and a decline in foreign investment are all contributing factors to the high

unemployment rate. The Migration Policy Institute (MPI) further asserts that the country's

highly qualified citizens have fled for employment possibilities overseas as a result of the high

unemployment rates between 2010 and 2015, resulting in a loss of human capital and further

economic degradation. It will take a comprehensive strategy to address these problems, one

that includes both immediate steps to ease public suffering and long-term plans to rebuild the

economy and preserve job possibilities for Venezuelans.

Demographic Rate in Venezuela: An Economic Challenge or a Country’s Development?

Despite the continuous population growth in Venezuela over the past ten years, there

are no reported serious demographic issue in the nation because of its steadiness. The World

Bank projected that there were approximately 30.5 million people living in Venezuela in 2013.

The population has been falling, nevertheless, as a result of the recent economic and political

challenges the country has faced, including high rates of inflation, emigration, and a drop in

healthcare and living conditions. The predicted population of Venezuela in 2021 is around 28.4

million, down by about 2.1 million from 2013. Furthermore, the significant decrease during

the past ten years, the population growth rate has gone from 1.3% in 2010 to 0.4% in 2021.

Over the years, the Venezuelan government has implemented a number of initiatives

and policies aimed at managing the population line of the nation, including:

• Programs for family planning which include free access to contraception, sex education,

and maternal health services. These programs aim to promote birth control.
 • Healthcare efforts designed to improve Venezuelan’s health status particularly to

mother and child as well as to increase access to healthcare services, prenatal care, and

parent readiness that the government has invested in healthcare initiatives.

• Improvements to education and job possibilities for women and young people,

particularly in rural and disadvantaged areas, to make them educated and aware to be

more productive and goal oriented instead of having a large and unplanned family.

• Immigration regulations in order to control the influx of migrants from other nations in

the region, the Venezuelan government has also imposed immigration regulations,

which include providing emergency residency permits and social services to those in

need.

I believe that the current political and economic turmoil in Venezuela will make it

difficult to enact initiatives that will reduce the population growth rate. Healthcare, education,

and job opportunities are all crucial to fostering population growth and development, but the

government's limited resources and political instability have made it difficult to invest in them.

Besides these obstacles, population strategies are crucial to Venezuela's future progress.

Government spending in areas such as maternal and infant health, education, and job creation

can raise standards of living and encourage foreign investment. The government can make it

possible to keep Venezuela's population steady and sustainable over the long run by addressing

the causes of migration and encouraging responsible family planning.

To conclude with, population policies have played a significant role in the Venezuelan

government's efforts to control the size and composition of the country's population. However,

their effectiveness is still up in the air because of the country's persistent economic and political

problems as time goes by. It is really important to tackle these fundamental issues in order to

create sustainable gains in population outcomes and economic stability.

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