In the United States, while the entire nation is feeling the impact of the virus, government grants are being prepared for small to medium businesses, the backbone of the economy. Apart from these grants, entrepreneurs can also source funds from private institutions such as https://looselending.com.
While authorities from all over the world are battling the pandemic and suffering major economic loss, fear of the epidemic swept South America. Many government leaders seem to recognize that health care in their countries cannot cope with a major outbreak. The motto is, therefore, maximum prevention.
Venezuela’s struggling economy hit even harder with coronavirus
In Venezuela, the number of infections in Venezuela has not passed fifty, yet the country has been in lockdown since Tuesday and continues to plummet into poverty. The economic crisis is affecting the country even more than the virus itself.
Since Monday, borders have closed and presidents have curtailed daily life in their countries one by one. “If we don’t move, the virus won’t move either,” said Argentine President Alberto Fernández when he announced “total quarantine” on Thursday.
Nowhere is the need to prevent the spread of the virus as great as in Venezuela. Under socialist Nicolás Maduro, who took the helm after Hugo Chávez’s death in 2013, the country has been in a deep economic crisis for years. A large part of the population barely has access to food and water and depends on food packages from the government. This scarcity is also prevalent in hospitals, which are struggling with a lack of medicines and resources.
Left-wing populist Chávez shared Venezuela’s oil wealth with the underclass, which made him immensely popular among poor Venezuelans. But oil addiction is troubling the country now that the price of oil has fallen rapidly in recent years and the country has hardly any other sources of income.
In 1998, Venezuela still produced 3.3 million barrels of oil a day, says Urbi Garay, professor of finance at the private management training IESA in Caracas. “A few years ago it was still 2.5 million barrels, production has now fallen to just 800 thousand barrels a day.”
While the United States is once again leading the way as the world’s largest oil producer thanks to the shale gas revolution, Maduro’s internationally controversial regime is able to sell its oil to fewer and fewer countries. In addition to plummeting production, the oil price fell freely this month.
Russia (albeit one of Venezuela’s last allies) refused to join early March agreements with other oil-producing countries to dampen production and keep prices high. The result: nearly two-thirds of Venezuela’s oil revenues went up in smoke.
Garay: “That is terrible for a country that is already in poverty. Gross national product has fallen by about 65 percent since 2013, an economic contraction rarely seen in a peacetime country. “
Venezuela has no fat left on the bones. The government is in arrears on its foreign debts and therefore no longer has access to international credit, says the economist.
Under those circumstances, the coronavirus doesn’t even have to really gain a foothold in Venezuela to cause immense damage. Now that the economy has come to a standstill in large parts of the world, the exchange rate of the bolivar, the Venezuelan currency, has also plummeted.
Distress is high
The need was evident on Tuesday when Maduro asked the International Monetary Fund – a capitalist institution vilified by his government for years – for a $ 5 billion loan.
The president got a “no” back. Among the countries affiliated to the IMF, there was no consensus on the legality of its government: more than 50 countries last year recognized opposition leader Juan Guaidó as the legitimate president of Venezuela.
Political power struggles have also weakened the country (and the regime). Guaidó is supported by the US, which expresses its support in strong sanctions against the Maduro government, among other things.
Those sanctions would also affect the import of medicines, the president said last weekend. According to news agency AP, he asked the US to lift the sanctions, but they did not respond. The measures would not affect the procurement of food and medicines, the Americans believed.
Professor Garay gives lectures from neighboring Colombia via the internet while his country has been in collective quarantine for four days. People may only take to the streets in exceptional circumstances and are then obliged to wear a mouth mask. Washing hands is more effective against the virus, according to WHO, but water and soap are scarce goods in Venezuela.
“Health care is in a bad state and part of the population is already undernourished,” says the economist. He wonders if a house arrest of all Venezuelans is possible at all in a country where a large proportion of the people “live from day to day”, unsure of where the next meal will come from.