A Look to the Future for Venezuela

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Aug 2020
The collapse of the Venezuelan economy is unprecedented. If the expected reduction in economic activity of 2020 (around 30%) is added to the 70% contraction between 2013 and 2019, the Venezuelan economic downfall will be one the largest in the world. As part of this crisis, there has been a dramatic drop in household purchasing power, with consequent increases in poverty and inequality. Moreover, social indicators deteriorated substantially and the provision of basic services collapsed. The COVID-19 pandemic is in its exponential phase, and the ability to react of the public sector is very limited. Fiscal resources are insufficient to provide food to the population and the condition of the health sector is grave.

The goal of this study is to summarize the explanations behind the countrys economic debacle even before the COVID-19 pandemic, analyze the pandemics impacts on the country, and outline short- and medium-term priority actions for dealing with the emergency and recovering the economy. The document also summarizes the efforts made by the Inter-American Development Bank (IDB) in 2019 and 2020 to diagnose the problem, design interventions and establish a dialogue with its counterparts and development partners.