Venezuela's Socialist Government Siezes GM's Plant
Protests erupted again in Venezuela, this time leading to the seizure of GM's assets by the country. GM said the takeover was illegal. According to GM, Venezuelan authorities seized GM assets including cars. Adding insult to injury, GM said it would also make separation payments to its workers—an honorable gesture. Venezuala's economy has been struggling ever since the "great recession" beginning in 2008 but it has gone into free fall with the collapse of the price of oil in late 2015. Hugo Chavez, the former President, died in 2013, but before his death he handpicked current President Nicolas Maduro. Maduro who has in the past has blamed the United States for the countries problems. For example, on December 18, 2016, Maduro said "we are victims of an international sabotage so the new bills, which are ready, cannot be shipped to Venezuela." He also said violence was due to a "macabre" plan by Obama, the former President of the United States.
Therefore, it is suspected this seizure is in retaliation. Because of the socialist policies of Venezuela, the country has continued to struggle since the collapse of the price of oil. The countries socialist initiatives could no longer be paid for after oil money started to trickle in. Unemployment is above 25% and the economy shrunk 18% in 2016. Government deficits have also exploded since 2011.
Inflation, for the Venezuelan Bolivar, is expected to jump to over 720% this year but the IMF forecasts 2018 inflation at over 2000%. This means, many of its citizens no longer have savings unless they owned other currencies. Unfortunately for Venezuela these seizures will likely compound the problem if business is not seen as safe, companies will pull out of the beleaguered country at an even faster rate further damaging its economy.