Venezuela’s economy dropped by 16,5% in 2016: many children are starving to death

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Venezuela’s economy dropped by 16,5% in 2016, while the oil sector contracted 9,9%, according to a US Securities and Exchange Commission’s report. The report also showed inflation reached 274 percent in 2016, one of the higher of the world. Venezuela’s government refused to release any key economic indicators for almost two years and investors had to rely on independent estimates provided by international organizations and banks.

The 144-page report confirms that the most oil-dependent economy in the world continues to slump due to low crude prices and has contracted for three years in a row.

The filing comes as the country is facing a dramatic humanitarian crisis. Severe shortages of medicines, medical supplies, and food have intensified since the crisis began, and Maduro’s weak responses have undermined Venezuelans’ rights to health and food.  Many people are starving to death, including children, who are dying at an alarming rate. 

Venezuela crisis: some Venezuelans are playing old video games to survive

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Venezuela is today one of the South America’s rotten economy and the country become a symbol of Latina America’s socialism failure. The currency is worth less than a dime, people are starving and fighting to have basic commodities and essential supplies, young brains continue to expatriate in other countries.

The country is sitting on the larger oil reserves in the world (397 billions barrels), and the Venezuela’s economy rely on oil export too much (oil accounts for about 95% of Venezuela’s export). Oil prices collapsed in late 2014 from $110 per barrels to $45 and reached a $25 low in early 2016, putting Venezuela’s economy under severe stress (Crude oil and Brent are now stable around $55 per barrel, which is still not enough to stop the economic bleeding).

Economic instability and political blockade turned Venezuela into a leaving hell since then. The hyperinflation, which soars above 800 per cent  in October and over 4.000 per cent compared to an year ago, made bolivar worthless and the government interrupted many social programmes, mostly financed through oil’s export revenues.

In a race for survival, Venezuelans need to find alternative ways to cover the family’s basic needs. Some of them are using old video games such as RuneScape or Tibia, where users can trade virtual gold for us dollars or cryptocurrencies, as Bloomberg reports.  Venezuelans gold farmers are becoming so familiar in Venezuela to a point to affect the games’ inflation. The practice, already used in other basket-case economies such as North Korea’s, is usually enough to earn about 2$ per day, more than what they made with their real jobs.