Fuel Shortage in Venezuela
In 1960, the Organization of Petroleum Exporting Countries (OPEC) established to coordinate and unify policies around the price of oil. This intergovernmental organization consists of 15 nations that produce 44 percent of the world’s oil and own 81.5 percent of the world’s oil reserves. Given the importance of oil in today’s economy, it is reasonable to assume that OPEC members are well-off, especially those with vast oil reserves. However, the fuel shortage in Venezuela proves otherwise.

Fuel Shortages Starve the Country

Venezuela, one of the five OPEC founders, boasts the world’s largest oil reserve. Although this South American country sits on a vast reservoir of mineable liquid gold, there is a fuel shortage in Venezuela that starves it. Due to years of mismanagement and corruption, the oil-rich nation has dried up its gasoline pumps, leaving lines trailing from gas stations that last hours. People can sometimes wait for days to fill their tanks. In the southern and western states of Tachira and Bolivar and the central states of Carabobo and Aragua, people can wait in line for five hours or more. Venezuela has limited power so it rations it; periodic power outages means that people cannot pump gas. However, there are no gas shortages in the country’s capital, Caracas; oil tankers divert into the capital to supply its six million citizens, but also to prevent political unrest around the Parliament.

These fuel shortages and gas station lines are impeding on already troubled Venezuelan lives. The hyperinflation and lack of job opportunities in the country hinder a good quality of life and gas shortages push this even further. Citizens cannot get to their jobs when their cars are empty on fuel or when they are stuck in line to fill up.

However, the fuel shortages in Venezuela are troubling to not only the day-to-day lives of citizens but also the entire agriculture industry that feeds the population. Fuel shortages compound the effect of food insecurity. When there is a shortage of fuel, food cannot make it from farm to market or from city to city. There is no rail system to move food either. Farmers leave harvested produce to rot, simply because the truck that transported vegetables to the market never arrived. On May 20, 2019, the National Federation of Cattle Ranchers in Venezuela issued a public plea to the government citing its difficulty moving cattle across the country.

Delayed shipping dates are not the only way fuel shortage in Venezuela impacts agriculture. Farmers might have nothing to sell because pesticide shipments might not arrive to prevent insects ruining their harvest. Without the shipment of crucial parts, farmers cannot operate basic equipment and without a reliable gas pump, workers cannot take the bus into work. Fuel shortage in Venezuela impacts not only the food but the equipment and the workers necessary to cultivate crops.

Plummeting Oil Production in the World’s Largest Oil Reserve

In the past, Venezuela has provided generous gas subsidies to make fuel almost free. However, the issue of fuel shortage began in 1989, when then-President Perez announced an end to the gas subsidy. The announcement resulted in large riots and since then, the suggestion of increased prices of oil is taboo. Thirty years later and after six years of economic crisis and recession, oil is still cheap, but production has dropped significantly. At the beginning of 2019, PDVSA, the state-owned oil and gas company, produced 1.2 million barrels of oil. On April 2019, this figure dropped down to 830,000. This decrease in production is due to obsolete machinery and under-resourced facilities. Additionally, as of now, only two refineries are in operation.

In addition to the mismanagement and corruption that has caused these plummeting oil production rates and shortages, the Maduro government also blames the corruption of former management of resources and U.S. sanctions. These sanctions prevented the export of specific materials that refine crude oils into usable fuel.

Solutions

Corruption, mismanagement and sanction stand-offs are difficult to address. However, there are many NGOs that operate on a community level and provide for those immediately in need. The Venezuelan Engagement Foundation Group (VEFG) is one of these NGOs with programs that address the effects of the fuel shortage and resulting food insecurity. One of its top missions is to provide nutritional meals to children in need through food programs. This year, its food programs have targeted communities in need, mainly children who are the most impacted demographic regarding food shortages. VEFG’s #FeedAKid campaign guarantees that $1 can give a child one meal a day through community kitchens and school canteens. Currently, VEFG feeds 3,000 children, teenagers and elders in 32 different centers worldwide or 90,000 meals a month.

Venezuela’s position is full of contradictions. As an oil-rich OPEC country with fuel shortages and once the richest country in South America, it is now grappling with hyperinflation, failing job markets and food insecurity. The corruption and mismanagement in government have failed to convert the potential of oil into social welfare. Venezuela has limitless potential in terms of its crude oil reserves ready for refinement. The efforts of NGOs on the local level and change on the national level will refine the crudity of poverty into prosperity.

– Andrew Yang
Photo: Flickr

Personal Technology and Poverty in IndiaTechnology is often associated with poverty in regard to agricultural or water-retention devices. This is because poverty precludes many people from securing access to fresh food and clean water. While these types of technologies successfully increase crop yield and food access for land-scarce countries, they don’t necessarily provide people with opportunities to actually lift themselves out of poverty. One of the most pervasive forms of technology in society today is the cellular phone, especially smartphones. Cellular networks cover nearly three-quarters of the globe now. However, cost and other access barriers leave much more of the population without adequate technological access. Personal technology and poverty are becoming increasingly related as more and more features on smartphones enable people to become more connected with other people. This also includes banks and lending institutions.

According to the Pathways for Prosperity Commission on Technology and Inclusive Development, only one in four people in developing countries utilize smartphone technologies for digital financial services. Digital financial services can allow small businesses to grow through online lending, thus resulting in sustainable economic development.

Digital Financial Services

Encouraging the usage of digital financial services is one way that personal technology and poverty must be addressed . In order for this to occur, there needs to be more widespread access to smartphones and cell phones in developing countries. Melinda Gates, co-chair on the Pathways for Prosperity Commission, cited that a phone costs at least two month’s salary for someone living below the poverty line in Tanzania. If businesses and governments prioritize expanding access of smartphones to developing countries, then costs may be lowered. As a result, citizens wouldn’t need to fall deeper into poverty in order to harness the power of personal technology.

Invest in Tech

Founded in 2010, Go-Jek is a transportation network company located in Jakarta, Indonesia. Go-Jek was able to change the market of ride-sharing in Indonesia. They accomplished this by utilizing technology to expand where ride-sharing services were available. Additionally, they facilitated communication between drivers and riders. CNN reports that Go-Jek has helped drivers see a 44 percent increase in income.

Offering incentives to businesses and governments to subsidize personal technology in developing countries is one-way access can be expanded. Policymakers must also address the inequitable technological access between men and women based on social inequality. Many developing countries do not grant women the same social and political rights as men. This means fewer women would likely gain access to personal technology than men. The Pathways for Prosperity Commission stated that in many developing countries, women are 40 percent less likely to have used the internet than men. While tech companies work to expand access to personal devices, there is still more that can be done. It is imperative that governments are working simultaneously to grant women equal political and social rights. The U.S. House of Representatives recently passed the Digital Global Access Policy Act of 2019, which seeks to increase investments in expanding internet access across the world.

Beyond the iPhone

Phones are one way for people in developing countries to utilize personal technology to lift themselves out of poverty. Still, there are other “low-tech” opportunities for sustainable growth and development. Susan Davis, in the Harvard Business Review, points out that small, localized tech solutions often prove to be more beneficial than large-scale, generic tech investments. Implementing technological solutions requires more than businesses giving personal tech devices to those in need. With regard to personal technology and poverty, proper training, policy implementation and assurance that barriers to access are broken down are ways that personal technology can be an effective solution to help end poverty.

-Erin Grant
Photo: Flickr

American Car Sales, The Roads of India
American cars have populated roads from Texas to Vermont to Oregon for decades, yet domestic sales growth is not what it once was. India is the next emerging market with vast potential for American car sales, and companies are vying for dominance.

General Motors (G.M.) and Ford are two of the biggest auto companies that export American cars around the world. In recent years, this model made by the U.S. has shifted to opening new manufacturing and distribution systems across the world.

India is an emerging market in the global auto sales industry and G.M. and Ford have both invested early, resulting in competition for popularity, market share and profit. Based on the current circumstances, it appears that Ford has the advantage. Ford has made large investments in production plants, including the Sanand and Chennai Vehicle Assembly and Engine Plants, each with a price tag of $1 billion. Together, the combined production capacity of these plants is 440 thousand vehicles per year. Ford has seen steady increases in production from just over 14 thousand to 26.4 thousand cars sold in August of 2014, and 2016, respectively.

In contrast, G.M. has just halted a planned $1 billion investment which was aiming to double G.M.’s market share by 2020. Unpredictable consumer patterns and possible new environmental regulations may play a part in this development. Monthly sales are declining over time for G.M, with sales struggling to rise above 4,000 units in early 2015.

In India, only 18 per 1,000 individuals own a car, compared to the 800 per 1,000 in the U.S. India also saw the largest percentage increase in sales from January to November of 2015. The lack of saturation in the Indian market presents a huge potential for growth in American car sales, yet what remains to be seen is how American companies will re-invent themselves to be desirable in the eyes of the people of India.

In the past, U.S. companies brought models of the European theater to developing countries with reliable success, expanding American car sales into new markets. However, this tactic has proven ineffective in India where customers will not jump to a higher price bracket. These companies are attempting to figure out ways to follow the market much more closely than they have before, and it is proving more difficult than anticipated.

India is on the edge of an explosion in car sales as a result of the growing middle class that will disseminate out of the cities and into more rural areas. As this inevitable future approaches, the possibility of capitalizing on this growth becomes less and less certain for new companies that wish to enter this market. Will Ford and G.M. be flexible enough to attract the people of India to companies rooted in decades of American success?

Patrick Tolosky

Photo: Flickr