Faisal Khan examines the crisis in Venezuela, what has caused it and what might be done to help resolve it.
Venezuela is currently facing an unprecedented humanitarian crisis. From being Latin America’s richest country, it is now one of South America’s most impoverished.
As Moisés Naím and Francisco Toro, writing in Foreign Affairs put it:
‘Its schools lie half empty. The health system has been devastated by decades of under-investment, corruption, and neglect; long-vanquished diseases, such as malaria and measles, have returned. Only a tiny elite can afford enough to eat. An epidemic of violence has made it one of the most murderous countries in the world.’
Some 2.3 million Venezuelans have fled since 2014; apparently the largest migration in the history of Latin America since the slave trade.
Venezuela’s recent elections have not been widely recognised, and the country is reported to have become a major cocaine trafficking hub. The annual inflation rate reached 83,000% in July. Prices double on average every 25 days and it is estimated the inflation rate by the end of 2018 will be 1,000,000%. Some 2.3 million Venezuelans have fled since 2014; apparently the largest migration in the history of Latin America since the slave trade.
The causes of this predicament are complex. Some of this is explained by the ‘resources curse’; the fact that Venezuela has failed to diversify its economy beyond oil.
Much of the explanation, lies, however with ‘Chavismo’. After becoming President in 1999 Hugo Chavez quickly centralised power and pursued a populist agenda. Chavez’s arbitrary interference in virtually every sector of the economy caused lasting damage.
As Moisés Naím and Francisco Toro explained:
‘Chávez’s government expropriated foreign-owned oil ventures without compensation and gave them to political appointees, who lacked the technical expertise to run them. It nationalised utilities and the main telecommunications operator, leaving Venezuela with chronic water and electricity shortages and some of the slowest Internet connection speeds in the world. It seized steel companies, causing production to fall from 480,000 metric tons per month before nationalisation, in 2008, to effectively nothing today. Similar results followed the seizure of aluminium companies, mining firms, hotels, and airlines’
Nicholas Maduro has continued where Chavez left off, further centralising power turning Venezuela into an effective dictatorship (with sham elections) and a pariah state.
Speaking to Byline Times, David Smilde, Venezuela expert at Tulane University argues that Venezuela’s current humanitarian crisis is caused by political factors. ‘The economy has been in free fall for the past three years, due to macroeconomic distortions, corruption and contraband grinding the population into misery.’ Due to Maduro’s undermining of democracy people no longer have the option to vote his government, so they are effectively voting with their feet by leaving.
With Trump in the White House, the stage may be set for a military intervention in VenezuelaBarry Cannon, Maynooth University
The crisis in Venezuela has caused International concern and has become a serious regional issue. Jorge G. Castañeda ex-Foreign Minister of Mexico argues considering the absence of an electoral or institutional solution to the crisis the only option maybe oil. Given more than 90% of Venezuela’s hard currency and exports are still destined for the United States Gulf Coast, he advocates oil sanctions by the US; in the hope that this would bring make the government change course.
Venezuela is likely to remain unstable for a long time to come. David Smilde, feels external pressure alone is unlikely to lead to change; what is required is a combination of internal pressure from organised opposition and diplomatic engagement.
The Trump administration even recently considered sponsoring a coup.
Barry Cannon from Maynooth University, who specialises in Latin America politics told the Byline Times: ‘My main worry at the moment is that with the arrival of far right reactionary, Jair Bolsonaro in the presidency in Brazil, Ivan Duque as president of Colombia, an Uribe surrogate, and with Trump in the White House, the stage may be set for a military intervention in Venezuela which Trump has long been threatening.’