I explain you how Venezuela fallen into a deep economic crisis

Hi guys! I wrote this because in a previous post @cryptick asked me this:

This made me think that although these things are my daily life there are people with other realities out there. Not everyone fully understands the internal problems that we live with in Venezuela.They may not even be aware that there are issues due to the strong censorship of the media in Venezuela.

I would like to show you some of the problems that Venezuela is going through and how they came up.

It all started with the President Hugo Chavez and the expropriations, but first I must explain the difference between capitalism and socialism:

In capitalism, individuals and companies carry out the production and exchange of goods or services freely for the purpose of benefiting. The distribution, production and prices of goods and services are determined by the free market.

Source

While in a socialist government system:

It is a system of economic and social organization, whose base is that the means of production are part of the collective heritage and the people themselves administer them. Some of the main objectives of a socialist order are the just distribution of goods and a rational organization of the economy. For this, it proposes the elimination of private property and the extinction of social classes.

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In order to change from capitalism to socialism, President Chavez began to expropriate private companies. This caused a loss of international reliability and left these companies in the hands of people who were unprepared to operate them properly, so many went bankrupt and the products began to be scarce.

Of course, all that did not happen suddenly, or from 1 month to another.

In the middle of the expropriations, in 2015, oil prices fell more than 50%. Venezuela only exports oil, so it’s economy was greatly affected.

They stopped entering more than 50% of the currencies, so the government could no longer maintain the stable economy that we had and began to take special measures. One of these measures was the exchange control, making the only way to obtain foreign currency by buying it from the government, a government that had just suffered a cut of 50% of its income, so it was impossible for them to continue selling dollars to people and entrepreneurs who needed dollars to buy foreign raw materials had to begin to buy dollars in the parallel market or black market, which began to increase the price of the dollar and small companies that could not keep up the pace began to fail, increasing increasingly the shortage of products.

SOURCE

Private companies were disappearing and those that were expropriated by the government no longer produced. Venezuela reached a critical point where we could not get basic necessities in the supermarkets: toilet paper, toothpaste, shampoo, butter, flour, bread (typical breakfast and dinner in Venezuela), just to name a few. To get them everyone had to buy resale at very high prices.
The government had to take another special measure: since these products were so scarce, they began to be sold by ID number. A person could only buy their products on the days scheduled by the government based on their ID number. They are grouped by the last numbers of the identification document, in this way:

Monday people with a identification number that end in: 1 and 2
Tuesday people with a identification number that end in: 3 and 4
Wednesday ending in: 5 and 6
Thursday ending in: 7 and 8
Friday ending in: 9 and 0
Saturday ending from 0 to 4
Sunday ending from 5 to 9

This was a measure of "rationing" the food, and it generated even more problems.
When everyone is scheduled for a specific time to buy food at the supermarket, long queues began to form in order to buy food.

People queuing to buy regulated products.

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This resulted in people called "bachaqueros", or people who are dedicated to standing in these long queues to buy the products at a regulated price. They then resell them at higher prices to people who do not have time to stand in these long lines.

The problem with bachaqueros is that not only do they go with their ID cards on their day, but they also go on other days with family cards and end up buying a large part of the goods. This increases the shortages.

The scarcity increased the price of the products, so the monthly minimum wage not enough to cover the expenses of the month. Then the government began to take other measures: they increased the salary several times, indiscriminately, without analyzing the root of the problem.

This led many people having to take unemployment, when forced companies to pay more to their employees. With fewer sales (due to high prices), the owners can not pay the full payroll, have to cut expenses, and finally end up dismissing many of their employees.

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So in summary:

Expropriations -> Zero international investment.
Zero international investment -> Little national production.
Little production -> Shortage of products.
Shortage of products -> Increase in prices.
Increase in prices -> increase in salary.
Salary increase -> INFLATION.

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While all of this was occurring, the price of oil plummeted, so the government applied a law of exchange control. They controlled how much a company was allowed to pay for raw materials. In a short time, the only way to acquire dollars was through the black market. The demand for foreign currency increased, so the value of that currency also went up.

The increase of the dollar has us fucked

Currently, the dollar has a value of: 41 thousand bolivares fuertes (Bsf) per dollar.

With a minimum monthly salary of 250 thousand bolivares, the equivalent in dollars would be only 6.25 $.

yes... an average Venezuelan earns only $ 6.25 a month, how sad this is?

This obviously is not enough to cover the monthly expenses, this led people to not eat their 3 meals a day or not eat enough to alarge the food, causing people to start losing weight.

Encovi 2016: 74% of Venezuelans lost more than 8 kilograms of weight last year

-The vegetables and tubers became substitutes for red and white meats
-82.8% of Venezuelans are poor in income
-10% of children stop attending classes because they do not have to eat at home or on their campus
-63% of the population does not have a medical care plan (health insurance)

SOURCE

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How does Steemit Fit In?

Since the minimum monthly salary is only $6, Steemit has become a great tool to obtain an alternative source of income. In a week with good content, Venezuelans can generate the same as an average person would generate in 1 month of work.

In my case, Steemit has helped me in this crisis. Steemit allowed me to continue my studies (Computer Engineering), otherwise I would have had to emigrate as many of my friends and family have done.

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I hope I have helped you understand a little about the problems that Venezuelans are dealing with every day. This was my way of explaining how, little by little, we sank into the crisis that we are now so deep into.

If you have any questions / corrections, please comment and I will respond!