Causes of the crisis
1. Political instability: Maduro took over the Venezuelan government after the death of Hugo Chavez, and since then this government has become increasingly authoritarian.
In February 2015 the Venezuelan government took over a supermarket chain and arrested the mayor of Caracas, Antonio Ledezma. Ledezma is an outspoken critic of the government, which Maduro claims is trying to overthrow itself. Separately, Venezuelan opposition leader Leopoldo López has been jailed.
2. FOOD CRISIS: Venezuelans have formed long lines outside supermarkets in order to buy milk, sugar and flour. Grocery stores across the country are experiencing food shortages because the government has no money to import food. Sugar, flour and other basic imports make up 70 percent of the country's consumer goods, according to the Brookings Institution. In January 2015, Venezuelan fast-food restaurants ran out of French fries and had to replace them with silken fries ( yucca).
Venezuelan President Nicolas Maduro had accused the owner of the supermarket chain Dia Dia of hurting the economy by hoarding food, and the government took over the chain two weeks later. But Dia Dia owner Jose Vicente Aguerrevere has denied the accusations against him.
3. CRUDE OIL: FROM RICH TO POOR: VENEZUELA IS BEING DRAGGED DOWN BY LOW OIL PRICES Oil prices on the global market traded at $51 a barrel in February 2015, roughly half of what they were six months earlier. This has exacerbated serious problems for the economy. Venezuela has the world's largest crude oil reserves, which at one time brought it great wealth.
Maduro seems panicked at the moment. Seeking funds to prop up his government, he recently visited China, Russia and a number of OPEC countries in quick succession.
Maduro announced on Venezuela's state television that China has given Venezuela aid. But in return, Venezuela is to supply crude oil to China. Experts say Venezuela sells crude oil for next to nothing. In the past, it cost almost nothing to buy gasoline in Venezuela, but now a penny can buy about five gallons of gasoline in Venezuela.
4. Collapsing Currency: The Venezuelan currency is devaluing faster than any other currency in the world. Most Venezuelans now exchange currency on the unofficial black market. A year ago, one U.S. dollar could be exchanged for 88 bolivares. And currently, according to dolartoday.com, a Web site that tracks black market exchange rates, one dollar is worth 190 bolivares.
In Venezuela, the process of trading foreign currency is very confusing. There are four exchange rates in Venezuela: two of which are used by the government to pay for imports, as well as the unofficial (black market) and a new exchange rate mechanism introduced by Maduro in the month of 2015.
With the new exchange rate system, Venezuelans are able to legally buy dollars for the first time in more than a decade. But there is a limitation: only $2,000 per person per month can be purchased.
5. Default: Venezuela will need to repay $11 billion in debt in 2015. Some experts believe Venezuela will default in October 2015, when it must pay $5 billion.
Expanded:
Venezuela's crisis is rather extreme, but some of the problems that are reflected are The problems are quite universal: unrealistically high welfare, often making the economy unsustainable; the country's economy can not be diversified, once the pillar industries are in trouble, the whole country is in crisis;
If you can not restrain the impulse to print money, hyperinflation will be difficult to avoid. Of course, there is also a very critical point, if you can not let the market play a decisive role, the economic operation will often be distorted, and the end result is a full-blown economic crisis.
Baidu Encyclopedia-Venezuela's Economic Crisis