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Summary: Venezuela is a country that has a lot of natural recourses with a good location close to North American market.

The most important natural resource is the oil. They have great reserves of oil that that represent approximately 300 billion barrels. One of the main characteristics of their oil is that its heavy; this heavy oil can be found in Orinoco basin. This heavy oil cannot flow easily and expensive to produce. Venezuela was suffering from income inequality and high rates of poverty and unemployment before the election of the President Hugo Chavez. He was elected in 1999 and reelected again in 2000 and 2006. He decided to follow political and economic policies by leading a Bolivarian revolution in which he ordered the Venezuelan state-owned petroleum company Petroleos de Venezuela; the worlds fifth largest exporter of oil to switch some of its money in order to fund the president social and political goals. The company production declined lately because of underinvestment in infrastructure and development of new fields of oil. The president signed several agreements with countries such as Cuba in addition to some Caribbean nations to encourage the domestic and foreign policy programs which also had an impact on the companys revenues. In addition he signed an agreement with china to sell them oil. The president used his political power to stand against any organization which does not support his polices and goal. In addition, Venezuela is considered as a risky business environment due to the continuous increase in inflation rates and currency devaluation; in which any investment in this country will not be able to grow enough in order to get over inflation over time. As well, it will affect Venezuelan businesspersons investments negatively due to currency devaluation in which it will have an impact on the currency exchange rate. In addition, the Bolivarian revolution has divided Venezuela into two sides; people who supported the government policies and people who opposed those polices. This division in the country because of the political issues led the environment to be even more risky when it comes to investment. Therefore, Venezuelan businesspersons seek to invest in a situation which is better and promising more than their current situation.

Problem: As we mentioned, Venezuela was suffering from income inequality which refers to the unfair distribution of income as well as suffering from poverty and high unemployment rate. Solutions: President Hugo Chavez promoted the Bolivarian revelation to reduce income inequality and to support the countrys economic independence. He implemented his polices by encouraging socialism and social programs in order to reduce poverty and benefit his people. In which he ordered the Venezuelan state-owned petroleum company to sell 115,000 of oil a day at special prices to Cuba in exchange of 20,000 Cuban medical professionals to operate in clinics in the poor areas of Venezuela and in return of Cuban experts. He also made the medical and health care services free to be accessed by all Venezuelans. He also signed an agreement one million barrels a day to china. In return, china will fund several development projects which include housing energy and industrial growth. He implemented price controls on different goods such as food to control the high rates in inflation. The president also nationalized several companies and his targets were oil, cement, steel, rice processing and packaging. His purpose from nationalizing such firms is to control the high unemployment rate and so that everybody can benefit from the countrys natural resources. In other words, he didnt like the idea that the private sector is making money more than the government sector, so he took over such firms in order to control the private sector workers salaries and to equalize both sectors to reduce income inequality. -

Opinion: In our opinion, we support the president idea of leading a Bolivarian revolution in which he benefited his country and had a broader goal which was making Latin America as one union. We believe that the policy which he implemented such as polices to support socialism and many other social problems to reduce poverty were beneficial for many of his people specially people in the poorer areas in which he tried his best to lift the poor people up. As well, implementing nationalization was also a good idea in which it decreased the unemployment rate which helped many unemployed people to find jobs in companies where they couldnt find a job in it before. He also wanted to make the countrys national resources accessible by everyone since he believed that these resources belong to everybody and no one owns them.

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