Explanation:
Venezuela is one of the petrostates in the world. It is a resource blessed country with a 299,953,000,000 barrels of proven oil reserve. This has made the oil rich nation assiduously dependent on the black gold (oil).
With much dependence on oil comes a host of many adverse economic issues. Falling crude prices will have a huge toll on the economy of this oil rich nation.
If the government does not diversify the economy;
- Venezuela foreign exchange earning will only depend on the price of oil and the production rate.
- Venezuela will not be able to finance her national budget.
- There would be serious inflation and rise in cost of goods and prices.
- It can lead to total economic collapse when renewable energy takes the fore front in the energy race.
