Venezuela's economic environment Research Paper

Venezuela's economic environment - Research Paper Example This means that the country has a great share in the geopolitical structure of the world. Venezuela, at 2013, is the world’s 34th largest economy with a GDP of $ 407.4 billion (Central Intelligence Agency 1). It experienced a growth rate of 1.6 percent, which is attributed to a slow and unstable recovery from the 2008’s world recession. In 2012, it experienced a growth rate of 5.6 percent. Besides, it has Per Capita GDP of $ 13, 600. This is the world’s 99th largest PPP. Oil forms a major part of Venezuelan economy since it contributes 96 percent of its export earnings, 12 percent of its GDP, and 45 percent of its annual budget. Manufacturing forms a huge percent of Venezuelan’s economy as the country exports steel, cement, and aluminum. The industry sector contributes 35.5% of the country’s GDP. Agriculture forms a mere 3.7 percent of the economy suggesting that the sector is underdeveloped. Although it exports agricultural products such as fish, the country imports two-thirds of its food supplies. The services’ sector is occupi es the largest part of the GDP, 60.8 % thereby employing 70.9 percent of the Venezuelan population. In terms of economic freedom index, the country has a score of 36.3 thereby making it a repressed economy. This means that there is limited individual freedom and liberty as pertains to investment and economic prosperity. The government has a big stake in economic activities, which in turn limits innovation and individual economic prosperity. It is essential, however, to note that Hugo Chavez, the former president, nationalized the oil industry in order to prevent conflicts and eliminate corruption. Venezuela experiences significant economic problems that correspond with state control of economic activities. Venezuela has a corruption index of 20 and ranks 166th in the world. This also