Although Venezuela is suffering from financial difficulties, the company is taking steps to address various financial obligations. Most recently posted on the DavidOsio Blog, the Venezuelan government completed a $30 million payment to dairy farmers in Uruguay. The dairy farmers are sure to be pleased with the payment, but the amount is only a down payment. Venezuela owes the dairy farmers $100 million. When the remaining $70 million is to be paid is not known at present.
Currently, Venezuela is dealing with several problems adversely impacting its economy. Oil prices are down to the lowest levels in many years due to a host of global market factors. In addition, a massive drought has led to electricity shortages. Without power, an economy is not exactly going to run efficiently.
Economies have their ups and downs. History reveals this to be an undeniable fact. How long the ups and downs last is never known until a reversal in the trend commences.
The decision on the part of the dairy industry in Uruguay to extend $100 million in credit is really nothing outrageous. Venezuela’s economy garners tens of billions of dollars in oil exports alone. Unfortunately, the volume of exported oil – among other issues – has led to economic hardship. Venezuela ended up overextended with the dairy farmers and other importers.
A change in the oil landscape and an end to the drought could put Venezuela on better fiscal footing. Hopefully, these changes will occur within a reasonable amount of time.