How did Venezuela, once Latin America’s richest country, sink into ruin? As the country faces a presidential election Sunday, here are four key elements in the unravelling of its economy.
– Oil boom brings dollars- The country with the largest oil reserves on the planet enjoyed more than a decade of abundance between 2004 and 2015, pulling in some $750 billion while the price of crude soared.
Heavily dependent on oil, which accounts for 96 percent of its foreign earnings, late president Hugo Chavez took advantage of the oil boom to borrow heavily.
Venezuela issued some $62 billion in sovereign bonds from the state oil company PDVSA, according to the consultants Ecoanalitica, and borrowed also from China and Russia. External debt increased fivefold to $150 billion. Read More