Venezuela’s Crisis Situation: Explained

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Daily riots, violence, crime, hunger, shortage of medicines and even death have sadly become the new normal in the South American nation of Venezuela. A series of events led to the downfall and Venezuela’s crisis.

Venezuela’s crisis situation has been brewing for quite some time and it started with Hugo Chavez

Since 1999, Hugo Chavez ruled Venezuela. Chavez was a communist leader and an ally of Cuba and bitterly opposed the U.S. He even went so far ahead to call President George Bush a “devil.”

Venezuela’s economy is heavily dependent on oil exports and is a major source of revenue. Taking advantage of the high oil prices following the Iraq war, the government spent heavily on public welfare schemes. This ensured great popularity for Chavez. Also, Chavez’s policies were not business friendly. He introduced new regulations, which adversely affected the private sector. During Chavez’s time, oil prices were above $100 per barrel and this helped the government continue spending. Troubles started when the prices of oil fell to historic lows ranging between $20-$30 per barrel. Around the same time, Chavez was diagnosed of cancer passed away.

Nicolas Maduro’s rise to power and the outburst of the crisis

In the election held after Chavez’s death, Nicolas Maduro defeated opposition party candidate by mere 1.5% votes. But, Maduro didn’t enjoy the same level of popularity among the people as Chavez.

In order to stay in the good graces of people, he continued with his predecessor’s policies and spent heavily on welfare schemes. The over dependence on oil and natural gas exports cost the economy dearly. Naturally, people were angry and this anger was reflected in the ballot boxes when the opposition won a landslide in the National Assembly in the election of 2015.

Maduro, however, was adamant and used police force against dissenters. Hundreds of protesters on the street were jailed. He used all the state’s resources to control mobs often resorting to brutal means to control violence. Violence on the streets became common and so did government surveillance.

With Maduro’s popularity declining, he resorted to increasingly dictatorial means. When some members of his own party went against him, they were quickly dismissed. He used institutions like the Supreme Court and the Military to further his agenda and block any moves made by the opposition that ruled the National Assembly.

He even put several opposition leaders behind bars or house arrest under trumped up charges. and conducted a “sham” election of a new legislative body in July 2017 to redraft Venezuela’s constitution. This caused the US government to impose financial sanctions against President Maduro.

With a declining economy, Venezuelan civilians are suffering the most

All this political chaos has led to recession in Venezuela that has been forecasted to go on till 2019. The economy took a turn for the worse in 2015, when the oil prices were cut in half and the country’s public finances made it a high-risk debtor, cutting the country’s access to international capital. Also, production of oil has dropped to a 13-year low.

The Venezuelan people are suffering the most due to the failing economy. The inflation levels rose to 800% in 2016 and is expected to rise to 1660% in 2017. Shortages of food and medicine have become common. It has led to a thriving black market economy for food and other vital products. There were even power shortages and the government was forced to cut electricity supply for hours. Even malaria, once almost eradicated in the country, is back on the rise.

One can only hope Venezuela’s political mess cleans itself up with the Presidential elections coming up in 2018 and the economy is able to rebuild itself.

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