What Happened To Venezuela?

This article can also be found at Tremr.

Venezuela is in a state of utter chaos and the government is being awfully cryptic about it. President Nicolas Maduro declared a constitutional state of emergency on Friday reportedly in order to “prepare to denounce, neutralize and overcome the external and foreign aggressions against [Venezuela].” Maduro, the heir of former President Hugo Chavez, didn’t provide many details about the reasons for the announcement, but indicated that the decision was made in case of a “foreign attack.” 

The state of emergency, which is poised to last until July, comes in the midst of an economic crisis of epic proportions. In 2015, the economy shrunk by 5.7%, and is expected to decrease by an additional 8% this year. A massive drop in the oil prices that drive the economy has lead to appallingly high inflation rates. In April, the Vice President announced that government employees will have three days per week of mandatory leave until further notice.

The consequences of the failing economy have been astronomical for the Venezuelan people. The crisis has left an alarming 70% of the population in poverty, and extreme drought in a nation that runs on hydropower has left many households without electricity. There has been an increase in violent crime to the extent that Caracas, Venezuela’s capital, currently holds one of the highest murder rates in the world. Furthermore, the government has been unable to afford basic necessities like sugar, flour, eggs and even medication, leading to the emergence of black markets for everyday items. To make matters worse, the country is also facing one of the worst outbreaks of the Zika virus in South America.

What on earth could have caused a crisis of this scale?

President Maduro has blamed both the West and his domestic opposition for seeking a coup against him in order to “destroy the socialist legacy of his predecessor…Hugo Chavez.” The historic distrust between the United States and Venezuela has, in the past, lead to Venezuelan leaders accusing the US of conspiring against them. President Obama has stated that he does not plan to get involved in the matter for precisely this reason.

In reality the economic crisis can be traced back to Hugo Chavez and his Bolivarian Revolution, which was based around the policies of Simon Bolivar. Chavez introduced “21st-century socialism” to a nation whose elite class had previously dominated the political realm. He frequently spoke out against “US imperialism” and incorporated the poor class into the democratic process for the first time.

But behind Chavez’s popular radical left-wing policies was an oscillating market and sheer luck. As home to one of the world’s largest oil reserves, Venezuela has relied almost exclusively on its oil reserves for its hard currency. During Chavez’s time in power, the country faced a huge oil boom and simultaneously did not impose any institutional limitations on spending. Over the last 17 years Venezuela has seen a trillion dollars in oil revenues, which has made up half of the government’s income. While the prices were high, he was able to set up a social welfare system and bring healthcare and education to people of the lowest socioeconomic class.

Chavez’s socialist reforms were successful precisely because they were funded by the oil boom, but Maduro was significantly less lucky when he took power in 2013 after Chavez’s death. The absence of institutional limitations eventually caused oil prices to plummet, which lead to severe shortages of basic goods. In essence, “when oil prices plummeted, so did Venezuela’s very being.”

Venezuela has made a habit of blaming the West for its own economic shortcomings. In 2014 Maduro claimed that there was a “world campaign against Venezuela.” While there is some amount of credibility in this accusation, as the US has traditionally meddled in Venezuela’s domestic affairs, it is far from the whole story. In actuality, the economy that Chavez created was entirely short-sighted; it was created under the assumption that oil prices would remain high, and functioned on the impulses of an “irrational energy market” – at the very least it certainly should have incorporated economic diversification. Instead, the government’s response was to tighten state controls over the economy and to hide its economic reports.

The government began hiding these reports from the public at the end of 2014 and only released them again in January of this year. Unsurprisingly, the reports revealed the dire economic crisis that had unfolded. Shortly after the government began hiding its economic reports, Maduro flew to China in a desperate last attempt to request a loan in order to stabilize the country. China, however, was wary of lending money to a nation they predicted would never pay it back.

Fortunately for Maduro however, there has been no evidence that he has lost the support of the military, which he heavily relies on for support and power. Military leaders are strategically placed in top positions in various institutions throughout the country. Amidst Maduro’s ever-increasing unpopularity at the end of 2015, he declared that should he lose the National Assembly, “there will be a massacre.”

At this point a complete collapse of Venezuela looks inevitable. Seventy percent of Venezuelans believe that Maduro should be ousted from power and Pew Research Center found that a staggering 85% are entirely dissatisfied with the government. These facts and an increase of protests indicate that Maduro will not finish his presidential term, which is set to end in 2019. The Atlantic predicted that the government may very well be overthrown in an uprising by the end of 2016. The fact of the matter is that Maduro and Chavez had ample time to diversify the economy and prevent the disaster that has played out, but instead Maduro deflected responsibility and blamed the West for his own shortcomings. Chavez’s “Bolivarian Revolution is a failure not because its ideals were unachievable but because its leaders were as corrupt as those they decry.”

Photo courtesy of ThePeoplesVoice.org

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