Venezuela was one of the wealthiest countries in Latin America in the 1970’s, built on petroleum and the largest oil reserve. From Venezuela’s abundance of oil resulted in the country becoming the main exporter of oil to the United States, producing three million barrels a day at its peak. However, due to the disorderly state the country is in currently, it is difficult to recall such a time in Venezuela where there was a stable democracy and macroeconomics.
In between the years of 1960 and 1977, Venezuela had an annual growth in gross domestic production, the total of goods produced, of two point three percent. However, when former President, Hugo Chávez, initiated the nationalization of the oil industry, the annual growth quickly declined to negative two point six percent in 1978 and further fluctuated at low levels. The volatility inevitably impeded economic growth along with varying international petroleum prices, global economic recessions in the 1980’s to 1990’s, and even internal issues unfolding such as further political conflicts.
President Chávez was responsible for pursuing alterations in the Venezuelan constitution. His changes included remodeling the executive and legislative in order for the seat of president to gain more power over affairs. Chávez’s changes were deemed controversial as he exchanged the Supreme Court judges seat in 2010 to be replaced by his supporters and in cases rejected the implementation of separation of powers.
Among the other plans in his agenda, Chávez utilized the lucrative oil industry now, put under state ownership, to improve the economic state of Venezuela by creating Petrocaribe. Through this project, countries that purchased Venezuelan oil would have up to 25 years to pay their dues. However it may have appeared at first glance did not meet up with its result, for the program devalued the Venezuelan currency in order to increase revenue oil exports. Oil workers, specifically the ones in the company Petróleo De Venezuela (PDVSA) , were outraged with Chávez and began a strike to which the president retaliated by firing the participating employees. Chávez’s new policies and the loss of 80 percent of important managers and engineers, PDVSA was not able to recuperate when the oil company crashed in 2014 and production decreased.
A few months after being sworn in for his second term as president, Chávez died from cancer in 2013 leaving Nicolás Maduro as his successor. According to the Central Electoral Commision, Maduro was voted in by less than two percent margin as opposed to his opponent Henrique Capriles, and yet the reaction to this was violent as several protests ensued in six different cities.
According to a chart by the Organization of the Petroleum Exporting Countries, Venezuela reached its highest petroleum value of over $75 billion during Chávez’s presidency, but were met with its lowest value of petroleum of 31.4 billion in the beginning of Maduro’s presidency to 2017. Economists comment how mismanagement and the reduction of oil prices was what caused the sudden decline.
Back in 2014, global prices for oil dropped along with its foreign demand, thus devastating the Venezuelan economy. Subsequently, Maduro launched a series of attempts to salvage the situation, some of which were to subtract five zeroes off of their currency, bolívars, and to print more money. Nevertheless, Maduro’s action furthered the inflation by reducing the currency value even more and caused pertinent investors of theirs to walk away. Citizens then tried to help themselves by converting what money they had left into US dollars despite the government instituting a fixed exchange rate system, therefore resulting in the bolívar to once more losing value. For that reason occurred the largest devaluation ever seen -- the bolívar was reduced by 95 percent -- but only served to enrage the Venezuelans as they were upset by the government not addressing the policies that limited productivity instead.
In 2016, when the inflation rate reached 800 percent, Maduro declared a state of emergency for the country. Currently, the country is experiencing high inflation, meaning products are becoming more expensive as the general value of the currency decreases.
Ultimately, life in Venezuela became agonizing as the horrendous economic state took a toll on civilians caught in the crossfire. Food and other basic supplies were scarce, for the Venezuelans had no other choice but to rely on imported goods at exorbitant prices. Once proud of their free education for everyone, numerous Venezuelan schools have been shut down because of low salaries for teachers -- a dollar a month -- and no funding for free school lunches. Simply put, inflation poses a serious threat to the country’s youth education as three million children out of eight million do not attend class anymore. Additionally, with the low income of two dollars a month reported by the spanish international news agency EFE, citizens need to decide between showering or eating. Proper hygiene has become a privilege if one could afford it furthermore contributing to widespreads epidemic of previously eradicated disease such as measles. Be that as it may, Venezuela has an 85 percent medicine shortage rendering chronic disease, diabetes or kidney issues, untreatable. People have to resort to battling over necessities resulting in an increase of violence. Reporters from the Brogen Project, a non-profit organization that publishes information on severe poverty, described encountering five to six protests a week during their visit to Venezuela, and in Sucre, a state, alone 111 protests happened in three months. As a result, citizens have come to depend on neighboring countries for supplies, such as but not limited to medicine and food from Colombia.
Three million -- a tenth of the population-- Venezuelans migrated out of their country in 2018, and the United Nations High Commissioner for Refugees estimates 5,000 people flee a day. This is recorded as the largest exodus of humans in South America. Other Latin American countries like Brazil, Colombia, Ecuador, and Peru are offering programs to help refugees of Venezuela. However, due to the vast amount of people leaving, South America has entered another crisis in which the other countries fear they will not be able to sustain such a staggering amount of people, lest their own country is put in danger.
Action to improve the ever-worsening conditions are ensuing as shock therapy is being practiced and organizations like Cuatro Por Venezuela is providing aid to the citizens. Though many speculate that the long term condition of the country is in the hands of the authoritative government ruling.