Case: Venezuela and the case for Economic

Overview:

The last 100 years of world economic thought have been characterized by an ideological tug of war called the "battle of ideas". Following the Bolshevik Revolution of 1917, the leaders of the Soviet Union established a centrally planned economy and put Moscow in charge. by contrast, in the United states and many other Western nations, free market capitalism was the order of the day. After the stock market collapse of 1925 and the Great Depression of the 1930s, however the wisdom of laissez-faire economic policies and free markets was called into question. Maybe the Soviet model was the best one? Should the government, in fact, play a central role in the economy?

Fast forward to the present day: although the Soviet Union is long gone, there are still plenty of examples of countries where the government leaders attempt to control the economy. Venezuela is a case in point. After assuming the presidency in 1999, Hugo Chavez, toyed with the idea of pursuing a "third way" to economic growth. That approach, suggested by then British Prime minister Tony Blair was a mashup of socialism and capitalism- that is "capitalism with a human face ".

However, it wasn't long before Chavez began espousing socialist policies for his country while vilifying the United States. "Chavismo" was the rallying cry of the president's one man revolution: Venezuela's rich oil reserves provided resources for Chavez to rally popular support with voters. In addition , Chavez provide Cuba and other Latin American neighbors with aid, mostly in the form of cheap oil through an energy pact known as Petrocaribe. Chavez died in March 2013. By 2015, with oil prices plummeting Venezuela faced an economic crisis that deepened with every passing week. Venezuela's inflation rate is currently 60%, the highest in the world. Even so, many in the Latin American nation of 29 million people still proclaim themselves to be "Chavistas". The case describes the challenges facing Venezuela in the current economic climate. Needless to say, the problems in Venezuela's economy have created both challenges and opportunities for global marketers.

The situation in Venezuela illustrates vividly the dynamic integrated nature of today's economic environment.

Requirements:

You have to read the case very well, provide an overview of the case, and answer the question:

1. Many Venezuelans proclaim themselves to be "Chavistas," despite the country's problems. How do you explain this?