Updated 05:14 PM EST, Mon, Nov 23, 2020

Venezuela Named the Most Miserable Country in the World for the Third Time

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The latest World Misery Index named Venezuela as the most miserable country in the world in 2015, a title that has been given to the nation for the third consecutive year now.

The study is published annually by Johns Hopkins University economist Steve Hanke, PanAm Post wrote. The Misery Index score is the sum of the unemployment rate, the lending rate, and the inflation rate, and minus the yearly percent change in real GDP per capita.

Venezuela's Misery Index score is largely due to the country's increasing levels of inflation. Hanke believes that Venezuela's way out of this predicament is to adopt the U.S. dollar.

"The only sure fire way to permanently fix Venezuela's money mess, which has been going on for many years, is to dollarize," Hanke told PanAm Post. "The politician or political movement that does this will win the prize and will stand a good chance of remaining in power for many years."

Joining Venezuela in the top five of the index are Brazil (at the 2nd spot), followed by Argentina, Jamaica, and Uruguay. The index views the countries' interest rates as the primary reason to blame.

"When interest rates are the major contributing factor to the Misery Index, it implies that the banking system is either not competitive, or there is a great deal of credit risk and uncertainty about inflation - or both," Hanke explained, as quoted in PanAm Post's report.

Hanke asserted that countries who got Misery Index scores over 20, such as Paraguay, Colombia, Dominican Republic, and Peru, should implement "serious structural economic reforms," which includes a major overhaul of its money and banking rule and "a good dose of free-market reforms," the news outlet reported.

Hanke further explained, "In the world of economic reforms, one has to be big and bold. The best way to proceed is to adopt a foreign currency (i.e. dollarization), or clone a sound foreign currency via a currency board."

He concluded that Latin America was unsuccessful in taking advantage of the prosperous economy in the past year.

"Yes, Latin America failed to reform and modernize during the 'boom' years. Now, the region will pay the price," Hanke said, as quoted by PanAm Post. "Indeed, there are many headwinds in the region. Indeed, 2016 could prove to be a very difficult year, and the 2016 Misery Index scores could be worse than this year's. There will be exceptions, of course, like Argentina, where a Marxist-populist government has finally been thrown out after ruining the country."

Bloomberg wrote that Venezuela is facing shortages of goods such as medicine, and the collapse in oil price, which represents 95 percent of the country's exports.

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