2015 was a troubling year for the global economy.
Political turmoil, falling oil prices, and decreasing demand for commodities affected
ostensibly every country in the world.
Some countries struggled so much that Bloomberg dubbed them as having quote “the world’s
most miserable economies” in its annual Misery Index.
So, which economies topped that list and why are they so miserable?
Well, the label is based on the two factors that affect daily life the most: inflation
and unemployment.
According to Bloomberg’s report, South Africa is among the worst.
This may come as a surprise, as its economy is Africa’s most industrial and second largest.
But 20-15 was a particularly tough year.
Demand plummeted for its two largest exports - gold and platinum - and severe drought thwarted
the country’s agricultural output.
By early 20-16, a quarter of South Africans were unemployed, and the currency had reached
an all time low.
On top of this, South Africa’s government is riddled with corruption allegations at
every level.
In early 2016, the country’s President, Jacob Zuma, was found guilty of violating
the Constitution when he funneled more than $20 million dollars of state money into his
own home for so-called “security upgrades”.
These “upgrades” included a pool, a visitor’s center and a chicken coop.
Slightly more miserable than South Africa… was Argentina, which suffers from one of the
highest rates of inflation in the world, stemming back to 2001, when the country effectively
declared bankruptcy.
Since then, consumer prices have risen anywhere from 10 to almost 40 percent every year.
Argentina’s inflation has had other, unforeseen consequences, one of which is an increase
in robbery.
Because the interest rate has been below the inflation rate, many Argentinians have kept
their savings in cash, instead of banks accounts.
As a result, the country has one of the highest robbery rates in Latin America.
But beyond Argentina and leading the misery index by a large margin... is Venezuela, which
saw inflation reach an estimated 150 percent in 2015.
Venezuela’s export economy is 95% dependent on petroleum, and with oil prices dropping
around the world, it has decimated the country’s economy.
As of early 2016, the country owed more than $10 billion dollars in debt payments and due
to such high inflation, currency coins have been effectively worthless since last October
of 2015.
Venezuela’s economic downturn -together with a drought that drained the country’s
hydroelectric dams - has resulted in a food shortage and a major electricity crisis.
To combat food stockpiling, the state enforces a strict rationing system that only allows
citizens to grocery shop on certain days of the week And to save electricity, the government
reduced the workweek to just two days for state employees and ordered that all clocks
be turned forward by a half hour so there’s more sunlight in the evening and less need
to turn on the lights.
The President of Venezuela even asked women to stop using hair dryers and let their hair
dry naturally instead.
This is likely just the beginning of a miserable chapter for Venezuela, Argentina and South
Africa.
Venezuela and Argentina stopped releasing inflation data in 2015, but economists predict
that both countries will continue to see inflation grow - in Venezuela possibly by as much as
700 percent.
And South Africa’s poor economic outlook has led foreign investors to withdraw money
from the country.
There’s no question all three will face major economic challenges in the coming years.