Hyperinflation is a rare occurrence which only happens when normal inflation becomes out of control, for example, in Germany during The Great Big Sad (The great depression), Today some countries are experiencing hyperinflation such as Venezuela. While a small country may seem to have little impact on the global scale the hyperinflation of Venezuela has political, economic, and social impact worldwide.
One of the early political factors that led to Venezuela’s hyperinflation is the election of a communist leader who claimed a dictatorship after running on a democratic socialist platform named Nicolás Maduro in 2014. This was the beginning of Venezuela’s downfall. After Maduro became President of Venezuela, the country lost its main source of income, oil, due to a mass influx of oil from their rigs which caused the price of oil to drop. This was compounded by a lack of infrastructure that caused maintenance on the oil rigs to be substandard. Oil prices dropped to less than ten dollars per barrel. As a political response to this economic crisis, Maduro ordered the printing of Venezuelan currency which started the hyperinflation of Venezuela. The hyperinflation would rise to nearly 1,000,000% at its worst point in 2018. This then caused the economic structure of Venezuela to fall further into disarray. The dropping of their economy caused the world’s oil prices to rise because suddenly President Maduro decided to withhold all oil exports from Venezuela in a fruitless attempt to stop hyperinflation. The people of Venezuela also began using US currency which further caused the Venezuelan currency to become worthless. The political and economic factors that led to hyperinflation not only affected Venezuela but also had a worldwide impact economically with higher oil prices leading to higher gasoline prices and inflation in the transportation of goods and services. Additionally, Venezuela’s government was found to be corrupt as many other formerly communist and socialist nations were found to be and, in turn, caused their downfall, unlike some socialist countires. Venezuela’s downfall made other countries scared to explore the idea of democratic socialism. After the world’s oil prices rose it caused a very anti-communist and anti-socialist scenario around the world sense Maduro caused the mass price increases in oil. In turn, socialists and communists in America began to be criticized heavily because of a lack of knowledge of the two economic/political beilefs.
Venezuela’s recovery from hyperinflation is incredibly slow because of the political and economic issues that ruined their country for almost a decade. The country has become a warning to other societies worldwide, proving that even small countries can have huge impacts across the world.