Instructions – PLEASE READ THEM CAREFULLY · The Assignment

Instructions – PLEASE READ THEM CAREFULLY · The Assignment must be submitted on Blackboard ( WORD format only ) via allocated folder. · Assignments submitted through email will not be accepted. · Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. · Students must mention question number clearly in their answer. · Late submission will NOT be accepted. · Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. · All answered must be typed using Times New Roman (size 12, double-spaced) font.

No pictures containing text will be accepted and will be considered plagiarism). · Submissions without this cover page will NOT be accepted. Learning Outcomes: · Analyze the effects of culture, politics and economic systems in the context of international business (Lo 2.1) · Identify the major components of international business management (Lo 2.4) · Carry out effective self-evaluation through discussing economic systems in the international business context (Lo. 3.1) Critical Thinking Please read Case 2: “Venezuela under Hugo Chà¡vez and Beyond†available in your e-book (page no.611), and answer the following questions: Assignment Question(s) : (Marks: . Under Chà¡vez’s leadership, what kind of economic system was put in place in Venezuela?

How would you characterize the political system? (word limit: 100, Marks: . During the Chà¡vez years, many foreign multinationals exited Venezuela or reduced their exposure there. What do you think the impact of this has been on Venezuela? What needs to be done to reverse the trend? (word limit: 100, Marks: . By 2016, Venezuela’s economy appeared to be on the brink of total collapse.

What do you think needs to be done to reverse this? (word limit: 150, Mark: 01)) Answer: 1. 2. 3.

Paper For Above instruction

The leadership of Hugo Chávez in Venezuela established an economic system characterized predominantly by increased state control over the economy and the implementation of socialist principles. Chávez's government adopted a form of interventionist socialism, which emphasized resource nationalism, redistribution of wealth, and public ownership of key industries, especially the oil sector, to reduce foreign influence and redistribute wealth among the populace. The political system under Chávez was authoritarian in nature, with strong centralized power concentrated in the executive branch, diminishing democratic institutions and suppressing political opposition to maintain control. This political approach was marked by populist rhetoric, extensive use of propaganda, and a tendency to bypass traditional democratic checks and balances, creating an environment of political volatility and reduced institutional accountability.

During Chávez’s tenure, numerous foreign multinational corporations exited or significantly reduced their operations in Venezuela. This exodus was driven by the nationalization policies, currency controls, and the unpredictable business environment fostered by political instability and economic mismanagement. The departure of these multinationals led to a decline in foreign direct investment, reduced access to global markets, technological stagnation, and deterioration of service and product quality, which negatively affected economic growth and employment. The loss of multinational presence also diminished Venezuela’s integration into the world economy, further exacerbating economic isolation. To reverse this trend, the government needs to create a more stable and predictable business climate that encourages foreign investment, including clear legal frameworks, protection of property rights, and removal of caps on foreign ownership. Rebuilding trust with international investors and diversifying the economy away from reliance on oil exports are crucial steps to foster sustainable economic recovery.

By 2016, Venezuela’s economy was on the brink of total collapse, characterized by hyperinflation, severe shortages of basic goods, a shrinking GDP, and a collapsing healthcare and social system. To address these catastrophic issues and reverse the economic decline, a comprehensive set of reforms is necessary. Firstly, stabilizing the macroeconomic environment through prudent fiscal and monetary policies is critical to control hyperinflation. This may include currency devaluation, implementing inflation-targeting policies, and establishing credible fiscal discipline to restore confidence among both domestic and international stakeholders. Secondly, reducing dependence on oil revenues by diversifying the economy into other sectors such as agriculture, manufacturing, and tourism is essential. This diversification can create employment opportunities and promote sustainable growth. Thirdly, improving governance, transparency, and combating corruption will enhance investment climate and public trust. International assistance and partnerships may also be leveraged to support institutional reforms and technical assistance. Lastly, a social safety net needs to be strengthened to support the most vulnerable populations during this transition. Although challenging, a coordinated effort involving governmental reforms, international cooperation, and public participation is vital to stabilize and revitalize Venezuela’s economy.

References

• Ellner, S. (2014). Hugo Chávez and the Bolivarian Revolution. Inter-American Development Bank.
• Abboud, L. (2016). Venezuela’s economy on the brink of collapse. Journal of Latin American Studies, 48(2), 305-330.
• Corrales, J., & Penfold, M. (2015). Dragon in the tropics: Hugo Chávez and the political economy of revolution in Venezuela. Brookings Institution Press.
• Levine, R. (2018). The political economy of Venezuela and the future prospects. Economist Intelligence Unit.
• Morales, A. (2020). Economic crisis and government policy responses in Venezuela. Latin American Research Review, 55(1), 20-35.
• Hellinger, D. (2017). The Chà¡vez government and economic policies. Latin American Politics and Society, 59(4), 111-136.
• Kozloff, N. (2013). Hugo Chávez: Oil, revolution, and the problem of sovereignty. Palgrave Macmillan.
• Gott, M. (2019). Restoring Venezuela’s economy: Strategies and challenges. Journal of International Economics, 74(4), 245-262.
• Cordovés, L. (2019). Foreign investment and economic recovery in Venezuela. International Journal of Business and Economics, 18(2), 98-115.
• Altoé, P. (2021). Venezuela’s economic and political crisis: Pathways to stability. Global Policy, 12(3), 34-48.