Although holding the potential for riches, Venezuela is experiencing an economic catastrophe and great political friction. Here, Adam Grech examines the country’s economic decline, and the events that have pushed citizens to protest.
On the Northern side of the South American continent rests Venezuela, a state rich in beauty and natural resources, maintaining one of the largest oil reserves in the world, and housing a diverse national ecosystem. Despite these riches, however, elements of instability, both political and economic, have been commonplace in the country recently. Poor implementation of economic programs by the states government and crackdowns on freedom of speech have led to statewide protests, and left the citizens of Venezuela with more questions than answers about the future of their country.
While political strife has been a frequent occurrence in the country’s history, many of Venezuela’s current economic problems can be traced to the late 1990’s, and the administration of former President, Hugo Chavez. With the promise of a better future for the nations people, and with the hope that rising oil prices would fuel national social programs, Chavez rose to power in 1998. He quickly began the process of the nationalisation of private companies operating within the country’s borders as well as the redistribution of wealth through the expropriation of property.
During his reign, Chavez was the beneficiary of a fortuitous economic tide in which oil prices rose from only $10 a barrel to nearly a hundred, allowing him to advance his social programs, and at one point was looked upon extremely favourable by the people of Venezuela. Although claims by the Chavez government that nationalisation processes would be beneficial in the long-term for the nations people, and for a period, his reforms did experience great success, his policies and over-reliance on oil revenues led to food shortages. They have now left feelings of resentment among many citizens.
For some, the situation has become so severe that they have turned to purchasing goods in neighbouring Brazil and Columbia. Those that cannot afford to travel, however, face a more dismal situation. As inflation has risen, stores have experienced difficulty maintaining an adequate supply of food, and when combined with the inability of citizens to match rising prices, have exasperated the states poor economic conditions. It is estimated that up to 32% of the country’s people are unable to afford three meals a day, and that levels of nationwide poverty have spiked from 73 to 82 percent in only a year.
Following an exodus of foreign companies and a fall in oil prices, the Venezuelan economy experienced a steep decline, and by 2016, inflation had risen by more than 800 percent, and the national economy had undergone a contraction of nearly 19 percent. Amid these economic constraints, current President Nicolas Maduro has accused political opponents of purposefully attempting to create financial difficulties for the state, and has stated that Venezuela is in the midst of an economic war with global rivals such as the United States.
Today, calls for a constitutional convention by Maduro that would delay national elections (the country’s presidential contest was set to occur in 2018), and increase the likelihood of his defeat, have led to mass protests, and created fear for those who may be considered adversaries of the regime. In recent weeks, the situation has continued to worsen. As civilian led demonstrations continue across the state, protests have become increasingly violent, with 37 dead, more than 700 injured, and 152 taken into police custody.
As conditions in Venezuela worsen and violence continues, a mass number of citizens have attempted to flee the country in order to find safety. Across the world, nations are experiencing a sharp rise in Venezuelan asylum seekers, with countries such as the United States seeing as much as a 150 percent increase. Others, such as Spain and Italy, are also undergoing a significant increase in asylum requests as the political situation of the country continues to deteriorate.
While Venezuela remains a nation of beauty and natural wealth, it faces a difficult road ahead, and will likely continue to fight large political hurdles in order to achieve sustainable economic growth in the years to come. Looking towards the future, it remains to be seen whether Venezuela will be able to truly prosper under similar political leaders, and whether or not the nations people will be able to truly benefit from the country’s sources of potential prosperity.
Feature Image: David Numeritos | Flickr
The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.
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