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The '''Crisis in Bolivarian Venezuela''' refers to the socioeconomic crisis that Venezuela has undergone since the end of [[Hugo Chávez]]'s tenure and which, extended over the years into the current presidency of [[Nicolás Maduro]]. During the year 2016, for example, consumer prices rose 800%, the economy contracted by 18.6%,<ref>{{Cite news|url=http://www.reuters.com/article/us-venezuela-economy-idUSKBN154244|title=Venezuela 2016 inflation hits 800 percent, GDP shrinks 19 percent: document|date=2017-01-20|work=Reuters|access-date=2017-05-01}}</ref> and hunger had escalate to the point that the "Venezuela's Living Conditions Survey" (ENCOVI) found nearly 75 percent of the population had lost an average of at least 8.7 kg due to a lack of proper nutrition.<ref>{{Cite news|url=http://www.upi.com/Top_News/World-News/2017/02/19/Venezuela-75-of-population-lost-19-pounds-amid-crisis/2441487523377/|title=Venezuela: 75% of population lost 19 pounds amid crisis|work=UPI|access-date=2017-05-01|language=en}}</ref> The murder rate in 2015 was 90 per 100,000 people according to the Observatory of Venezuelan Violence (compared to 5 per 100,000 in the US).<ref>{{Cite news|url=http://www.latimes.com/world/mexico-americas/la-fg-venezuela-violence-20160605-snap-story.html|title=The biggest worry in crisis-ridden Venezuela: crime|date=2016-06-06|work=Los Angeles Times|access-date=2017-05-01|language=en-US|issn=0458-3035}}</ref>
The '''Crisis in Bolivarian Venezuela''' refers to the socioeconomic crisis that Venezuela has undergone since the end of [[Hugo Chávez]]'s tenure and which, extended over the years into the current presidency of [[Nicolás Maduro]].


The crisis affected the average life of Venezuelans on various levels; the rise of unemployment, which resulted in the emergence of social movements aimed at changing the economic and productive model, as well as questioning the political system and demanding a democratic renewal. The most important social movement is the Venezuelan student movement{{cn|date=April 2017}}, which has arisen mainly due to precariousness and economic conditions. Political corruption, scarcity of basic products, closure of companies, deterioration of productivity and competitiveness, and high dependence on oil are other problems that have also contributed to the worsening crisis.
The crisis affected the average life of Venezuelans on various levels; the rise of unemployment, which resulted in the emergence of social movements aimed at changing the economic and productive model, as well as questioning the political system and demanding a democratic renewal. The most important social movement is the Venezuelan student movement{{cn|date=April 2017}}, which has arisen mainly due to precariousness and economic conditions. Political corruption, scarcity of basic products, closure of companies, deterioration of productivity and competitiveness, and high dependence on oil are other problems that have also contributed to the worsening crisis.

Revision as of 16:25, 1 May 2017

Crisis in Bolivarian Venezuela
Top to bottom, left to right:
Protesters confront the People's Guard at Plaza Francia on 18 March 2014. Empty store shelves in a Venezuelan store. Millions of Venezuelans protest in Caracas on 26 October 2016. Venezuelans queued to enter a store.
Date2012 – present [1]
Location Venezuela
CauseCrime, corruption, economic downturn, shortages and political conflict.

The Crisis in Bolivarian Venezuela refers to the socioeconomic crisis that Venezuela has undergone since the end of Hugo Chávez's tenure and which, extended over the years into the current presidency of Nicolás Maduro. During the year 2016, for example, consumer prices rose 800%, the economy contracted by 18.6%,[2] and hunger had escalate to the point that the "Venezuela's Living Conditions Survey" (ENCOVI) found nearly 75 percent of the population had lost an average of at least 8.7 kg due to a lack of proper nutrition.[3] The murder rate in 2015 was 90 per 100,000 people according to the Observatory of Venezuelan Violence (compared to 5 per 100,000 in the US).[4]

The crisis affected the average life of Venezuelans on various levels; the rise of unemployment, which resulted in the emergence of social movements aimed at changing the economic and productive model, as well as questioning the political system and demanding a democratic renewal. The most important social movement is the Venezuelan student movement[citation needed], which has arisen mainly due to precariousness and economic conditions. Political corruption, scarcity of basic products, closure of companies, deterioration of productivity and competitiveness, and high dependence on oil are other problems that have also contributed to the worsening crisis.

Background

Chávez presidency

Chávez wearing military fatigues in 2010

With increasing oil prices in the early 2000s and funds not seen in Venezuela since the 1980s, Hugo Chávez created the Bolivarian Missions, aimed at providing public services to improve economic, cultural, and social conditions[5][6][7][8] so he could maintain political power.[9] According to Corrales and Penfold, "aid was disbursed to some of the poor, and more gravely, in a way that ended up helping the president and his allies and cronies more than anyone else".[10] The Missions entailed the construction of thousands of free medical clinics for the poor,[5] and the enactment of food[7] and housing subsidies.[6] A 2010 OAS report[11] indicated achievements in addressing illiteracy, healthcare and poverty,[12] and economic and social advances.[13] The quality of life for Venezuelans had also improved according to a UN Index.[14] Teresa A. Meade wrote that Chávez's popularity strongly depended "on the lower classes who have benefited from these health initiatives and similar policies."[15]

The social works initiated by Chávez's government relied on oil products, the keystone of the Venezuelan economy, with Chávez's administration suffering from Dutch disease as a result.[16][17] By the end of Chávez's presidency in the early 2010s, economic actions performed by his government during the preceding decade such as overspending [18][19][16][20][21] and price controls[7][22][23][24][25] proved to be unsustainable, with Venezuela's economy faltering while poverty,[14][26][27] inflation[28] and shortages in Venezuela increased. According to analysts, the economic woes Venezuela continued to suffer through under President Nicolás Maduro would have still occurred with or without Chávez.[29] In early 2013, shortly after Chávez's death, Foreign Policy stated that whoever succeeded Chávez would "inherit one of the most dysfunctional economies in the Americas — and just as the bill for the deceased leader’s policies comes due".[16]

Maduro presidency

Diosdado Cabello beside Nicolás Maduro and his wife, Cilia Flores

It is impossible to understand why the government is not reacting to this reality, why it has not taken measures to alleviate the economic distortions that are destroying the real income of Venezuelans.

Barclays, September 2015[30]

When elected in 2013 following Chávez's death, Nicolás Maduro continued the majority of existing economic policies of his predecessor Hugo Chávez. When entering the presidency, President Maduro's Venezuela faced a high inflation rate and large shortages of goods[31][32][33] that was left over from the previous policies of President Chávez.[34][16][18][19]

President Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples, and often said he was fighting an "economic war", calling newly enacted economic measures "economic offensives" against political opponents he and loyalists state are behind an international economic conspiracy.[35][36][37][38][39][40] However, President Maduro has been criticized for only concentrating on public opinion instead of tending to the practical issues economists have warned the Venezuelan government about or creating any ideas to improve the economic situation in Venezuela such as the "economic war".[41][42]

By 2014, Venezuela had entered an economic recession[43] and by 2015, the country had an inflation rate which had reached its highest rate in its history.[44]

Economic crisis

Further information: Economic policy of the Hugo Chávez government and Economic policy of the Nicolás Maduro government

The origin of this crisis, framed in the context of the Great Recession, years after the improvement of the extraction of unconventional hydrocarbons in the United States showed a macro-economic phenomenon of great importance for the region. From China's slowdown, a steady increase in oil production and stable demand, generated a surplus of this resource that caused a drop in prices of reference crude oil, WTI and Brent, as at the beginning of 2014 Found above $100 and at the end of the year could fall to $50 per barrel, causing unfavourable changes in the economy of Venezuela.

Due to high oil reserves, lack of policies on private property and low remittances, by 2012, of every 100 dollars, more than 90 came from oil and its derivatives. With the fall in oil prices in early 2015 the country faces a drastic fall in revenues of the US currency along with commodities.

Housing

Since the mid-2000s during Chávez's presidency, Venezuela suffered from a housing crisis.[45] In 2005, the Venezuelan Construction Chamber (CVC) estimated that there was a shortage of 1.6 million homes, with only 10,000 of 120,000 promised homes constructed by Chávez's government despite billions of dollar of investments.[46] Due to the shortages, poor Venezuelans attempted to construct homes on their own despite structural risks.[46]

Slums in Caracas seen above El Paraíso tunnel

By 2011, Venezuela suffered from a housing shortage of 2 million homes, with nearly twenty prime developments being occupied by squatters following Chávez's call for the poor to occupy "unused land".[45][47] Up to 2011, only 500,000 homes were constructed under Chávez, with over two-thirds of the new housing developments being built by private companies while the Bolivarian government provided about the same amount of housing as previous administrations.[47] Housing shortages were further exasperated when private construction halted due to the fear of property expropriations and because of the Bolivarian government's inability to construct and provide housing.[45] In a July 2011 article by The Guardian, urban theorist and author Mike Davis, "Despite official rhetoric, the Bolivarianist regime has undertaken no serious redistribution of wealth in the cities and oil revenues pay for too many other programmes and subsidies to leave room for new housing construction".[48] By 2012, the shortage of building materials had also began to disrupt construction, with metal production at a 16-year low.[49] At the end of Chávez's presidency in 2013, the number of Venezuelans in inadequate housing grew to 3 million.[49]

Under the Maduro government, housing shortages continued to worsen. Maduro announced in 2014 that due to the shortage of steel, abandoned cars and other vehicles would be acquired by the government and melted to provide rebar for housing.[49] In April 2014, Maduro ruled by decree that Venezuelans who owned three or more rental properties would be forced by the government to sell their rental units at a set price or they would face fines or have their property possessed by the government.[50] In By 2016, residents of government provided housing, who were usually supporters of the Bolivarian government, began protesting due to the lack of utilities and food.[51]

Venezuelan debt

Venezuelan debt, 2014

According to the Central Bank of Venezuela, the foreign debt of the Venezuelan state in 2014 is divided into:

  • Venezuelan public debt: it represents 55% of the total and is what is owed in terms of domestic and foreign debt bonds, treasury bills and bank loans.
  • PDVSA's financial debt: it represents 21% of the total debt
  • Foreign debt: accounts for 15% of total debt, financing obtained through Chinese funds.
  • CADIVI's debt: represents 9% of the debt. It is CADIVI's non-financial debt (currencies for imports, dividends, income and services in general)

Shortages

Further information: Shortages in Venezuela
Venezuelans eating from garbage in late-2015.

Shortages in Venezuela have been prevalent following the enactment of price controls and other policies during the economic policy of the Hugo Chávez government.[33][32] Under the economic policy of the Nicolás Maduro government, greater shortages occurred due to the Venezuelan government's policy of withholding United States dollars from importers with price controls.[52]

Shortages occur in regulated products, such as milk, various types of meat, chicken, coffee, rice, oil, precooked flour, butter prices; and also basic necessities like toilet paper, personal hygiene products and medicine.[33][53][54] As a result of the shortages, Venezuelans must search for food, occasionally resorting to eating wild fruit or garbage, wait in lines for hours and sometimes settle without having certain products.[55][56][57][58][59]

Gross domestic product

In October 2014 due to the crisis, the Venezuelan economy contracted 2.3%. In the second quarter, there was a fall of 4.9%, after registering a contraction of 4.8% in the first three months of the year.

Venezuela has a strong dependence on oil, which generates about 96% of the revenues it receives from exports. The fall of prices occurs at a time when the South American country faces a runaway inflation which reached an annualized rate of 63.9% in November and severe problems of scarcity of basic products.

In reference to the violent anti-government protests that shook Venezuela earlier this year and alleged plans to destabilize the country, which President Maduro said included smuggling and hoarding essential products, the central bank said that those "actions against the national order prevented The full distribution of basic goods to the population, as well as the normal development of the production of goods and services. This resulted in an inflationary upturn and a fall in economic activity. "

Inflation

Inflation in 2014 reached 68.5%. This figure is one of the highest that has been recorded in the country's economic history and was the highest in the world during 2013. By 2015 inflation had reached 180.9%, and by 2016 it had increased to 700%.

According to several people inflation has become a way of life, or at least that is what have made politicians and economists, who assume inflation as an inevitable process.

Business and industry

At the beginning of the crisis, international airlines (which depart from Maiquetia international airport in Caracas) have had problems getting their normal flights to and from Venezuela, and as a result, many airlines have left the country.

According to the International Air Transport Association (IATA), the Government of Venezuela has retained 3.8 billion dollars to airlines. As a result of this, the country loses business opportunities, aggravating the deep crisis that currently suffers.

Airlines such as Air Canada, Alitalia, Lufthansa, among others, join forces to leave the country, making the departure of the country even more difficult. Other airlines, most of them, reduced the number of flights and the size of the planes, in an effort to stay in the country. Like the Colombian Avianca, one of the operations that carried out more and that now only has a quarter of its seats.

Unemployment

As a result of the crisis, Venezuela has suffered the greatest unemployment in years, being this one of the biggest problems of the Venezuelans, due to the inflation and expropriations by the Venezuelan government to private companies, many others are leaving the country, leaving To many Venezuelans in unemployment.

Likewise, the salary increase at the end of 2016 (this being one of the supposed solutions of the government), brought with it the dismissal of half of the employees of large companies (Corpoelec, Imaseo, etc. ...).

In January 2016 the unemployment rate closed at 18.1 percent[60] becoming the most miserable economy in the world.[61]

Political crisis

Freedom ratings in Venezuela from 1998 to 2017[1] (1 = Free, 7 = not free)

2013 Presidential election

The events that occurred after the presidential elections of 2013, mainly the demonstrations that took place in the election result in which Nicolas Maduro is elected president of Venezuela.

Protests and recall movement

Further information: 2014–17 Venezuelan protests and Presidency of Nicolás Maduro § Recall referendum

The political crisis was unleashed in October 2016 when at least six lower Venezuelan state criminal courts declared void the previous processes of collecting signatures in their states. As a consequence, the National Electoral Council declared the end of the national referendum for the removal of Nicolas Maduro from the presidency of Venezuela, following previous opinions of the Supreme Court of Justice.[citation needed]

The Venezuelan opposition, through the Bureau of Democratic Unity, announced in reaction a peaceful demonstration at the national level, called "Venezuela takeover", to be held throughout the country from Wednesday 26 October 2016 and with indefinite duration . Finally, the opposition announced the "March to Miraflores" to be held on Thursday, November 3, 2016 concentrated in Caracas at the Miraflores Palace.[citation needed]

Likewise, the Venezuelan National Assembly, which had been declared "in contempt" by the Venezuelan Supreme Court, declared the "rupture of the constitutional order" in Venezuela in extraordinary session.57 58 On October 25, the National Assembly debated Possibility of bringing Maduro to trial for his responsibility in adopting the decision of the lower court, and its application as a national decision to suspend the recall referendum. Although the Constitution does not grant this power to the legislature.[citation needed]

Corruption

Further information: Corruption in Venezuela

Corruption in Venezuela is high by world standards and is prevalent throughout many levels of Venezuela's society.[62] In the case of Venezuela, the discovery of oil in the early twentieth century has worsened political corruption.[63] While corruption is difficult to measure reliably, Transparency International (TNI) currently ranks Venezuela among the top 20 most corrupt countries, tied with four other countries as the 8th most corrupt nation in the world.[64] A 2014 Gallup poll found that 75% of Venezuelans believed that corruption was widespread throughout the Venezuelan government.[65] Discontent with corruption was cited by opposition-aligned groups as one of the reasons for the 2014 Venezuelan protests.[66]

Social crisis

Crime

Further information: Crime in Venezuela

Emigration

Further information: Bolivarian diaspora

The Bolivarian diaspora is the voluntary emigration of millions of Venezuelans from their native country during the presidencies of Hugo Chávez and Nicolás Maduro, due to the establishment of their Bolivarian Revolution.[67][68] According to Newsweek, the "Bolivarian diaspora is a reversal of fortune on a massive scale" where the "reversal" is meant as a comparison to Venezuela's high immigration rate during the 20th century.[68] The analysis of a study by Central University of Venezuela titled Venezuelan Community Abroad. A New Method of Exile by El Universal states that the "Bolivarian diaspora" in Venezuela has been caused by the "deterioration of both the economy and the social fabric, rampant crime, uncertainty and lack of hope for a change in leadership in the near future".[67] The Wall Street Journal stated that many "white-collar Venezuelans have fled the country's high crime rates, soaring inflation and expanding statist controls".[69] It is estimated that more than 1.5 million emigrated from Venezuela from 1999 to 2014[67] while in 2015, it was estimated that approximately 1.8 million Venezuelans had emigrated to other countries according to the PGA Group.[70][71]

Parents will say, "I would rather say goodbye to my son in the airport than in the cemetery".

Tomás Páez, Central University of Venezuela[72]

In 1998, the year Chávez was first elected, only 14 Venezuelans were granted U.S. asylum. In just 12 months in September 1999, 1,086 Venezuelans were granted asylum according to the U.S. Citizenship and Immigration Services.[73] Chávez's rhetoric of redistributing wealth to the poor concerned wealthy and middle class Venezuelans causing the first portion of a diaspora fleeing the Bolivarian government.[72] In a May 2002 cable from the United States Embassy, Caracas to United States agencies expressing astonishment at the number of Venezuelans attempting to enter the United States, stating, "This drain of skilled workers could have a significant impact on Venezuela's future".[74]

Academics and business leaders have stated that emigration from Venezuela increased significantly during the final years of Chávez's presidency and especially during the presidency of Nicolás Maduro.[75] This second diasporic episode consisted of lower class Venezuelans who suffered from the economic crisis facing the country, with the same individuals that Chávez attempted to aid seeking to emigrate due to their discontent.[72] It has been estimated in the year 2016 alone, over 150,000 Venezuelans emigrated from their native country, with The New York Times stating that it was "the highest in more than a decade, according to scholars studying the exodus".[72] Venezuelans have opted to emigrate through various ways, though image of Venezuelans fleeing the country by sea has also raised symbolic comparisons to the images seen from the Cuban diaspora.[72]

Health care

Main article: Health care in Venezuela
Healthcare spending by percentage of Venezuela's GDP[2]

Following the Bolivarian Revolution and the establishment of the Bolivarian government, initial healthcare practices were promising with the installation of free healthcare and the assistance received from Cuban medical professionals providing aid. The Bolivarian government's failure to concentrate on healthcare for Venezuelans, the reduction of healthcare spending and government corruption eventually affected medical practices in Venezuela; causing avoidable deaths along with an emigration of medical professionals to other countries.[76][77]

Venezuela's reliance of imported goods and its complicated exchange rates initiated under Hugo Chávez led to increasing shortages during the late-2000s and into the 2010s that affected the availability of medicines and medical equipment in the country.[77] By 2010, the Bolivarian government stopped publishing medical statistics.[78] Throughout Chávez's presidency, the Health Ministry changed ministers multiple times. According to a high-ranking official of Venezuela's Health Ministry, the ministers were treated as scapegoats whenever issues with public health arose in Venezuela.[77] The official also explained how Health Ministry officials would also perform illicit acts in order to enrich themselves by selling goods designated to public healthcare to others.[77]

Into the Maduro presidency, the Bolivarian government could not supply enough dollars for medical supplies among healthcare providers; with doctors saying that 9 of 10 of large hospitals had only 7% of required supplies with private doctors reporting many patients that are "impossible" to count are dying from easily treated illnesses due to the "downward sliding economy" in 2014.[78] Due to such complications, many Venezuelans died avoidable deaths with medical professionals having to use limited resources to use methods that were replaced decades ago.[76] In February 2014, doctors at University of Caracas Medical Hospital stopped performing surgeries due to the lack of supplies, even though nearly 3,000 people require surgery.[79] By August 2014, Venezuela was the only country in Latin America where the incidence of malaria was increasing, allegedly due to illegal mining and in 2013, Venezuela registered the highest number of cases of malaria in the past 50 years, with 300 of 100,000 Venezuelans being infected with the disease. Medical shortages in the country also hampered the treatment of Venezuelans.[80] Shortages of antiretroviral medicines to treat HIV/AIDS affected about 50,000 Venezuelans, potentially causing thousands of Venezuelans with HIV to develop AIDS.[81]

In late-2014, Venezuelans began saying that due to shortages of medicines, it was hard to find acetaminophen to help alleviate the newly introduced chikungunya virus, a potentially lethal mosquito-borne disease.[82] In September 2014, the Venezuelan government stated that only 400 Venezuelans were infected with chikungunya[83] while the Central University of Venezuela stated that there could be between 65,000 and 117,000 Venezuelans infected.[84] In August 2015 independent health monitors said that there were more than two million people infected with chikungunya while the government said there were 36,000 cases.[85] By August 2015 independent health monitors said that there were more than two million people infected with chikungunya while the government said there were 36,000 cases.[85]

By early 2015, only 35% of hospital beds were available and 50% of operating rooms could not function due to the lack of resources.[76][77] In March 2015, a Venezuelan NGO, Red de Medicos por la Salud, reported that there was a 68% shortage of surgical supplies and a 70% shortage of medicines in Venezuelan pharmacies.[77] In May 2015, the Venezuelan Medical Federation said that 15,000 doctors had left the public health care system because of shortages of drugs and equipment and poor pay. In August 2015 Human Rights Watch said “We have rarely seen access to essential medicines deteriorate as quickly as it has in Venezuela except in war zones.”[85] By the end of 2015, the Bolivarian government reported that of all Venezuelans visiting public hospitals in the year, one-of-three patients died.[86]

Public opinion

In a November 2016 survey by Datincorp, Venezuelans were asked which entity was responsible for the crisis, with 59% stating that President Chávez (25%), President Maduro (19%) and chavismo (15%) were the causes, while only 16% blamed the opposition (10%), entrepreneurs (4%) and the United States (2%).[87]

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source: https://en.wikipedia.org/w/index.php?diff=778181293

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