Perhaps you’ve heard about the Venezuelan crisis, or have seen pictures floating around of the protests and clashing of armed forces with citizens. As of right now, the country is facing an economic, political, and social crisis. What once was a thriving democracy with a flourishing economy and a lot of social welfare, turned into a corrupt and condemned dictatorship with President Maduro being the head of it all. Although its shift from a free democracy to a socialist democracy by Chavez also caused the beginning of the economic struggles. In this post, we will analyze and assess the economic and political aspects of the crisis and how the country was plummeted into chaos. We will also look at what it means for Venezuelan society, and how much the citizens have to endure from a human-rights violating and ill-managed government. 
Political Background:
In the early 1920’s people discovered the largest and most expansive oil reserves in the world stationed in Venezuela. Immediately after, large oil corporations established a tremendous presence in the oil drilling and exporting industry, allowing for the dramatic growth in the Venezuelan economy. In the late 1970’s however, massive amounts of oil were being produced every year, creating a surplus of oil worldwide which dramatically reduced the value of oil in Venezuela. When President Hugo Chavez received power in 1999 oil prices coincidentally rose exponentially and allowed him to achieve his political strategies over the next few years. Through socialism, Chavez nationalized the oil industry and used the excess money to invest in the social welfare programmes that were catered to improving healthcare, access to food, and education for the poor. Chavez enjoyed enormous amounts of support from populus groups while it helped him to secure his Presidency. In addition, Chavez’s Social Democracy was looked up to with great admiration as his policies enjoyed wonderful short term success deeming Venezuela one of the richest countries in Latin America. While the economy grew as a result of oil demands from China and India, the social life also maintained steady improvements. Despite these developments, Chavez had rigged the economy so that it favoured the poor because he knew that he would receive their electoral support in return. Even worse, his economy was contingent on the hope that oil prices would remain high, which proved to be unsuccessful in the end. In 2013 after Hugo Chavez passed away and Nicolas Maduro became President of Venezuela, oil prices plunged and the economy fell to shambles. Failed economic policy in the previous administration neglected to acknowledge the potential downfall of the oil industry and its results were devastating. In the wake of social and economic unrest, Maduro consolidated his power and shifted towards an authoritarian government. Through corruption, Maduro filled Supreme court positions with people who aligned with his beliefs and they eventually voted to negate power from the leading opposition party known as the National Assembly. In addition, Maduro re wrote the Constitution so that it contributed to his presidency and his policies. Protests erupted across the nation but this had little effect on Maduro as he continued to practice fraudulent activity and reduced opportunity for fair and equal elections in the coming years. Now, with the support of the military Maduro enjoys total control over nearly every facet of the crumbled economy, while Venezuela endures the most extreme political and social conditions in the world. 
Economic Background:
Venezuela’s economic crisis has been a large, if not the largest, factor in their current crisis. Since the fall of oil prices in 2014, Venezuela has been experiencing inflation, massive debt, and an inability to obtain basic goods. The set up for this economic crash began when former president Hugo Chavez nationalized the nation’s oil reserves, making the oil industry the primary source of national income. During Chavez’s presidency, oil prices soared to extremely high prices ($100 per barrel), allowing the government to put into place an array of social programs and subsidies. But when prices crashed, Venezuela felt the foundation built from their oil cash flow crumble beneath their feet. The Chavez government also failed to save money for times of crisis, so when the waves of the economic crash hit, limited money was available to import the basic goods that sustain everyday life. Now, Venezuela has a foreign debt of 150 billion dollars, which according to Ricardo Hausmann, Director of the Harvard Center for International Development, is equivalent to approximately six years of the country’s exports(Watch his interview with Aljazeera here). In this state, foreign countries are reluctant to loan money to Venezuela, leaving the country without the ability to import goods to its citizens. Venezuela is facing massive hyperinflation as well. According to the IMF the inflation rate is set to rise to 720% by the end of 2017. The Venezuelan government has attempted to regulate the exchange rate of bolivar to dollar, but because of the development of the black market, which values the bolivar at basically nothing, the bolivar has not gained value in recent years. With their massive debt, and lack of foreign reserves, (down 30 billion since 2008), Venezuela has considered defaulting on their debt, which may alleviate temporary financial pressure, but would do nothing in rebuilding its currency. The crash that the country is experiencing today did not happen overnight, because of Chavez’s history of poor investment and dependency on revenue from oil, Venezuela is left today in a state of desperation, with a worthless currency and not enough food and basic necessities to go around. 
Why Does the Venezuelan Crisis Matter?
Economic and political unrest in Venezuela have severely deteriorated the living conditions and the status of human rights within the nation. The government, under Maduro’s authoritarian rule, has implemented a series of regulations which directly attribute to massive deprivation of resources. From 2004 to 2013, the government wildly overspent on social programs, along with subsidizing imported food in order to make goods affordable to the impoverished people of the country, but by 2014, the government’s spending became severely unsustainable. Maduro then drastically cut imports, and attempted to repay Venezuela’s foreign debt and avoid default by using up already dwindling financial reserves. Additionally, the government increased regulations on food and medicine, which stifled domestic production. Such regulations include the Fair Price Law, a price ceiling created to keep costs affordable for the lower socioeconomic classes. However, this in turn made companies extremely unprofitable because they could not meet such low prices with their already scarce resources, which led to halts in production and worsening shortages. Farmers are unable to obtain fertilizer and equipment they need to successfully complete a supply chain, which contributes to the lack of food on grocery store shelves. According to the New York Times, the scarcities have become so out of control, that in order to purchase the most basic groceries, Venezuelans have to pay 5 times the monthly minimum wage, which is a mere 200,000 Bolivars. 93% of the population cannot afford food, and the country has an estimated deficit of 80% of goods, according to data presented from several Venezuelan polling firms. Furthermore, the state aggressively seized the private property of hundreds of companies, along with hundreds of thousands of acres of land, in order to gain control of the private sector and redistribute wealth. But after poor management of the seized assets, redistribution failed and a large portion of the population were rendered homeless. Additionally, the government decided to tightly control the currency exchange, and in 2003 they became the sole administrator of American dollars within the nation, according to the Harvard Center for International Development. Black markets of American dollars have been created, where they are sold for more than 700 times their value. This makes it very difficult for companies to obtain dollars, which are necessary to import raw materials and machinery. Without these supplies, locally made goods are impossible to produce, which further degrades the economy and perpetuates starvation within the country.
Shortages have also materialized in hospitals, where the staff lacks basic supplies like gloves, antibiotics, running water, and chemotherapy. It is estimated that cancer rates have more than doubled in the past few years, and people wait months on end to receive life saving surgeries. In one particular hospital in Caracas, 5,000 children awaited surgery, yet there are only enough supplies to successfully complete 3. In 2016 alone, 101 infants died by March, and 100 mothers died by the end of June, simply due to an undersupply of medical treatment. Gherzon Casanova, a fourth year medical resident at the hospital told ABC News, "When people come, we have to tell them to leave because we can't treat them...We tell them they'll die if we get them in." Amnesty International’s director for the Americas Erika Guevara-Rosas stated, “It’s like a war zone; the conditions were deplorable… the doctors had to get creative to treat incoming patients with no resources. [This is] a humanitarian crisis.” Lawmakers estimate that the country is lacking 95% of resources to treat a variety of conditions, but the Venezuelan Ministry of Health refused to release any official statistics. As demonstrated by an article from ABC News, citizens cannot find anything in stores; “You can't find anything, I've spent 15 days looking for diapers," says Jean Paul Mate, a meat vendor.
The food and medical shortages have pushed people to take to the streets in violent protest, and it is estimated that more than 90 people this year have been killed during such demonstrations, along with 3,600 people detained. Moreover, in the 2017 Venezuelan Crime and Safety Report, it was noted that the greatest quantity of crimes include homicide, kidnapping, and robberies, all of which are supported by an under-equipped, poorly trained, corrupt police and judicial force and the country-wide availability of millions of illegal weapons. Without control and support by the state, human rights violations, violence and starvation relentlessly continue on.
Overall, the economic crisis began in the 1980’s when the country started producing extensive amounts of oil and making oil the only source of income. Under the president of Chavez, socialist changes were taken in the country and vast amounts of money were put aside for social programs, with no money saved up for the future. When the oil prices changes, and Venezuela’s economy crashed, under the current President Maduro, he turned the government into an authoritarian government, and is not doing much to help the economy and citizens, while violating human rights policies. With this being said, the country’s debt has soared very high and other countries are reluctant to help. Because of this massive debt, Venezuela does not have the means to acquire basic necessities for the citizens, and the government is also crushing any opposition it faces.
Sources:
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Benzaquen, Mercy. (2017, July 16). How Food in Venezuela Went From Subsidized to Scarce. The New York Times. September 19, 2017, from https://www.nytimes.com/interactive/2017/07/16/world/americas/venezuela-shortages.html.
United States Department of State Bureau of Diplomatic Security. (2017). Venezuela 2017 Crime & Safety Report [Data File]. Retrieved from https://www.osac.gov/pages/ContentReportDetails.aspx?cid=21286.
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