Shit you should care about … The Venezuela crisis
Venezuela is at the centre of major international debate and criticism as the spiralling South American country whose history is ridden with political corruption, nationwide recessions and riots, might have finally reached breaking point. At the root of the conflict are the rich oil supplies found in Venezuela’s land, holding some of the largest reserves in the world. Venezuela is now deep in economic peril, triggering hyperinflation and a humanitarian crisis. The state of their government reflects these dire circumstances, and the situation is only escalating.
In January 2019, Nicolas Maduro was inaugurated for his second term as president following an election that the opposition and a large portion of the international community deemed to be illegitimate. In response, Juan Guaido declared himself as the interim president of Venezuela. The nation has since been split, and foreign support is being offered on both sides, but right in the middle is the suffering Venezuelan public whose future is growing more and more uncertain.
So how did this happen?
The root of all of Venezuela’s problems come from its status as a petrostate. This is a country which is identified through a few crucial interlinking attributes:
Exporting oil and natural gas is the key contributor to government income.
Both political and economic power is unequally distributed, focused on the elite minority.
High corruption is found within political institutions.
Other countries also deemed petrostates are Algeria, Cameroon, Chad, Ecuador, Indonesia, Iran, Libya, Mexico, Nigeria, Oman, Qatar, Russia, Saudi Arabia, and the United Arab Emirates.
Economists say that petrostates experience a ‘resource curse’. The resource (oil in Venezuela’s case) brings in large amounts of foreign capital that appreciates the local currency and boosts imports which are now relatively cheaper. As a result, the government tends to neglect other sectors such as agriculture and marketing, which economists warn is crucial for growth and developing competitiveness.
In Venezuela, oil sales make up for 98% of the export earnings and 50% of GDP. So, when oil prices plummeted in 2014, and other sectors of their economy could not support them, Venezuela’s economy and government suffered. The country was pulled into a downward spiral of government debt and hyperinflation that they are yet to get out of.
Venezuela, throughout the 19th century, was characterised by a turbulent history of military coups, the overthrowing of governments and the transition from a dictatorship to a civilian government in 1945. The Country experienced the benefits of an oil boom in 1973 and endured through economic depression in 1989.
Hugo Chavez is a significant figure whose actions have greatly contributed to Venezuela's position today. Chavez first gained recognition in 1992 when he still held the position as Colonel in Venezuela’s military. In this role, Chavez and his supporters made two attempts of a coup to overthrow President Carlos Andrés Perez. These both failed, with over 120 people killed, and Chavez spent two years in prison. But these attempts had made Chavez a media star, embodying the public’s symbol as a figure who would stand up against government corruption. His following remained loyal and in 1998 Chavez was elected as Venezuela’s President, bringing the United Socialist Party into government.
Chavez as president introduces the ‘Bolivarian Revolution’, a political process which established a new constitution, new socialist and populist economic and social policies, and an intensified anti-American foreign policy.
But, during Chavez’s 14 years of presidency he led Venezuela’s political and economic environment into shambles. His government’s control continued to skyrocket, pressing the nation closer and closer to authoritarianism. The independent press was shut down, and a huge portion of private businesses and foreign-owned assets were nationalised. His government took control of the Supreme Court and ended term limits, meaning a leader could run as many times as he pleases. The country’s oil reserves continued to plummet, while President Chavez effectively doubled government debt during his time in office.
In March of 2013 Hugo Chavez died of cancer and his chosen successor, Nicolas Maduro narrowly won a close race for Venezuela’s new leader against the opposition party. However, under Maduro’s rule things didn’t appear to get any better. Inflation continues to rise which at 2013 was running at 50% a year.
In 2014, anti-government protests spread into Caracas, Venezuela's capital city. The violence led to at least 28 deaths. The Maduro government accuses the opposition party of planning a coup to oust the president. In November 2014, oil prices reach a four-year low forcing the government to announce further cuts to public spending. A month later Maria Corina Machado, an oppositional leader, is charged with conspiracy to assassinate President Maduro. In February 2015, the opposition Mayor of Caracas, Antonio Ledezma is also charged with planning a coup backed by US support.
The Opposition Democratic Unity coalition wins control of Venezuela’s legislative body, the National Assembly with a two-thirds majority. This marks the end of 16 years of Socialist Party control. This is the first major power shift in over a decade which should lead to some constructive development in Venezuela’s political landscape. However, this is not the case.
President Maduro announces a state of ‘economic emergency’. The combination of declining oil prices, falling currency rates, political corruption and ongoing food and medicine shortages has the nation in chaos. Maduro announces measures to combat this such as currency devaluation and a rise in petrol prices. As a result, hundreds of thousands of people protest in the capital city. The crowds accuse Maduro for the economic crisis and call for his removal.
The Venezuela Supreme Court announce they are stripping the National Assembly of its power. The Supreme Court has continuously sided in favour with Maduro’s government, whereas the National Assembly is controlled by the opposition. This generates huge outcry both internationally and from the opposition who say the move is comparable to a coup. After several days of extreme resistance and protests, the Supreme Court reverses the decision.
Despite previous criticism, Maduro announces he has signed an executive order to form a "Constituent National Assembly". This will be all-powerful body, reshaping the current legislative functions and the president’s executive powers. The new assembly is filled with Maduro supporters meaning the president will hold a lot more power. Maduro said this will bring peace but there is hefty criticism nationally and in the international community who accuse Maduro for taking a road to dictatorship
Maduro says of the new assembly, "We must modify this state, especially the rotten National Assembly that's currently there."
Maduro’s supporters celebrated this expansion of power, whereas the opposition continue to protest, calling for earlier election dates.
The Opposition holds an unofficial referendum, with over 7 million participants. 98% of voters reject Maduro’s proposal for the new constituent assembly. The government however dismisses the results, stating the referendum was illegal. Despite high levels of protest, the referendum to replace the National Assembly with the Constituent National Assembly takes place. The new Constituent National Assembly wins the referendum and the opposition condemns the results as fraudulent.
The United States Secretary of the Treasury, Steve Mnuchin announces on July 26th, the sanctions made against 13 Venezuelan government and military officials, all in connection to Maduro. These sanctions are then followed by Colombia and Mexico for the same individuals. This escalates on the 31st when Mnuchin announces the freezing all of Maduro’s assets that are under US jurisdiction and all American citizens are prohibited from any kind of exchange with Maduro.
The CEO of the company who provided the technology for last month’s election spoke out about an alleged discrepancy of at least one million votes. The government denied any type of vote tampering. However, when Venezuela's attorney general Luisa Ortega begins an investigation into the voter fraud, she is sacked by the government. Ortega states that the reasons for her firing were to stop her investigations.
Following a disagreement over the timing of the next presidential election, the major opposition parties decide to boycott the election taking themselves out of the running. As a result, President Maduro wins another six-year term over relatively unknown opposition candidates. However, voter turnout is down to only 46% and Maduro’s victory is denounced by the international community.
The United Nations report that more than two million Venezuelans have left the country since 2014 due to growing economic concerns and food and medicine shortages. They warn of a potential migration crisis as people flee to Colombia, Brazil, Peru and Ecuador. This creating rising tensions within the region. Peru and Ecuador implemented new restrictions on migration and in Brazil a migrant camp was destroyed by locals.
On the 23rd, Juan Guaido declares himself as the interim president of Venezuela. Guaido is the leader of the National Assembly, which is virtually powerless in Venezuela’s political landscape against the newer Constituent National Assembly. Guaido states that under Venezuela’s constitution the National Assembly leader can assume president temporarily if the position is left vacant or if the president is deemed illegitimate.
The US applies further sanctions, cutting off Venezuelan state oil company PDVSA from receiving proceeds on exports to the US. This cuts off key revenue to the Maduro’s government, applying added pressure for him to step aside.
Guaido warns British Prime Minister Theresa May that Maduro may attempt to remove Venezuela’s gold that is held in the UK central bank. He asks for authorities to prevent this. Guaido states that, "If the money is transferred ... it will be used by the illegitimate and kleptocratic regime of Maduro to repress and brutalize the Venezuelan people."
Maduro is asked by a Spanish TV show if the current situation in Venezuela could lead to civil war. He responds that "no-one could answer that question with certainty." He then adds, “Everything depends on the level of madness and aggressiveness of the northern empire (the US) and its Western allies.”
However, Guaido says "There is no possibility of a civil war in Venezuela, it is a Maduro invention."
On the 8th a cargo container carrying food and medicine for the Venezuelan public is blocked at a bridge that links Colombia and Venezuela. Venezuelan soldiers blocked the crossing with a tanker truck under Maduro’s authority. Maduro insisted that letting in any aid could trigger a US-led invasion. US President Donald Trump has maintained that the use of military force is “an option.”
The first delivery of humanitarian aid was delivered on the 11th to Venezuela. This was a shipment of vitamins and supplements. Guaido remarked that it was on the smaller scale as the border continues to be blocked. He also did not say who the donation was from.
The humanitarian crisis has now reached dire levels as Maduro is reportedly weaponising food and medicine supplies. Using this as a political weapon, he is blocking much-needed aid from coming into the country in an attempt to hold onto power. Guaido called Maduro’s actions, “almost genocidal.” The new interim president has a huge amount of pressure weighing on him from the international community to overthrow Maduro. The situation is only heightened as the longer it takes the longer the Venezuelan public are left without the necessities to live.
So, who is backing who?
Internationally, countries have taken sides on which leader they will support. Guaido has many strong supporters:
The US declared their recognition of the new comer as the legitimate president, stating it would use its “economic and diplomatic power” in order to help rebuild Venezuela’s crumbling democracy.
A number of European countries including Britain, France, Germany and Spain initially gave Maduro an eight day period to call a presidential election for a credible president to be chosen. When Maduro failed to do so, the European countries chose to recognise Guaido as president.
Brazil, Colombia and Argentina were among various right-leaning governments in Latin America who are also backing Guaido.
Canada has also given Guaido their support and have donated $40.4 million dollars to help Venezuela’s population.
A number of other countries including Australia, Israel and Morocco have also backed Guaido.
In opposition, Maduro’s government has received continual support from a number of countries who are likely to be crucial in Maduro prolonging his influence:
Maduro’s most significant international supporters have been Russia and China. Both countries are major investors in Venezuela’s oil industry. The two countries also blocked a United Nations Security Council’s push to back Guaido. Russia has also loaned Maduro’s government billions of dollars to keep it afloat. China has vocally taken a slightly more neutral stance likely trying to safeguard its economic interests if Guaido is successful. A spokesman for China said they are, “committed to the principle of noninterference in other countries’ internal affairs.”
Turkey, Iran and Cuba also support Maduro.
Maduro has the key support of Venezuela’s military. The military have been loyal to the United Socialist Party since Chavez was president. He allowed for more opportunities than simply confining them to barracks, which Maduro has also continued. However, political analysts have speculated that this is more than just loyalty. Within the Venezuelan military, corruption, repression and drug trafficking is apparently a large problem, and those who have committed these crimes are worried amnesty will not be maintained if the opposition comes into power.
New Zealand has not given official recognition to either side of Venezuela’s government despite the US calling on the international community to do so.
In a political crisis it is often the innocent public who suffer the most. The people of Venezuelan are in the midst of a leadership struggle combined with economic and social collapse. For years this has been escalating, now nearly 90 percent of the population live below the poverty line, and three quarters of the population have lost an average of 8.6 kilograms due to food scarcity.
Hyperinflation has also devastated the country, meaning few people can even afford what is left. A study led by the National Assembly found that in November 2018, annual inflation reached 1,300,000% in last 12 months. This is projected to grow to 10,000,000% this year. Prices were doubling on average every 19 days. People have started using the worthless currency to make handbags and purses as this is more valuable than the bills alone.
As a result of this suffering the UN has estimated that by the end of 2019 there will be 5.3 million refugees and migrants, with more than 3 million people displaced already. Most of these people are fleeing to neighboring countries, such as Columbia, Brazil and the Caribbean islands. It has been warned that if this continues it could potentially overwhelm medical facilities and destabilize local economies.
What happens now?
This crisis has been shaped by actions to fuel greed and extend power, but its implications affect the innocent Venezuelan public far more than anyone who is responsible. Their future is uncertain and fear of civil war is still very real. Maduro’s government continues to block aid from reaching the public but how long will Guaido and his international supporters allow for this to go on before action is taken? The pressure is mounting but for peaceful resolution this requires the seemingly impossible idea that one side will have to give.
Banner image courtesy of Rayner Pena/picture alliance via Getty Images