Question 85 from UPSC CSE 2024 - Current Affairs (Economic s)

Question

Consider the following statements:
1. Statement-I: Recently, Venezuela has achieved a rapid recovery from its economic crisis and succeeded in preventing its people from fleeing/emigrating to other countries.
2. Statement-II: Venezuela has the world's largest oil reserves.
Which one of the following is correct in respect of the above statements?

IASCODEX · Accepted Answer

Correct Option: D. Statement-I is incorrect, but Statement-II is correct

Strategy: Assess recent facts about Venezuela's economy and migration. Statement-I is contradicted by ongoing mass emigration and lack of genuine crisis recovery—an easily verifiable contemporary fact. Statement-II is a widely known fact regarding Venezuela's oil reserves. By contrast, rapidly rejecting Statement-I while confirming Statement-II leads directly to the correct answer.

Key Info: Venezuela remains in a deep economic and political crisis since the mid-2010s, marked by hyperinflation, collapsing GDP, widespread poverty, political repression, and acute shortages of basic necessities. The crisis triggered one of the largest refugee exoduses globally, with over 7.7 million Venezuelans fleeing since 2014, according to the UNHCR and IOM. Push factors include food insecurity, insecurity, deteriorating healthcare, and weak state institutions. The displacement has mainly impacted Colombia, Peru, Ecuador, and other Latin American countries. Despite possessing the world's largest proven oil reserves—about 300 billion barrels or approximately 17% of the world's reserves—Venezuela's oil sector suffers from mismanagement, lack of investment, and international sanctions, resulting in low production (just 0.8% of global output in 2023). The country remains heavily dependent on oil revenues for its economy. OPEC certifies Venezuela's oil reserves as the world's largest, having overtaken Saudi Arabia in official statistics in 2011. Efforts at economic recovery have so far been insufficient to stem the humanitarian or migration crisis. International organizations continue to provide humanitarian assistance to both the population and those displaced regionally.

IASCODEX · Answer

Option A: Both Statement-I and Statement-II are correct and Statement-II explains Statement-I

IASCODEX · Answer

Option B: Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I

IASCODEX · Answer

Option C: Statement-I is correct, but Statement-II is incorrect