Venezuela: A Nation in Economic Crisis
Venezuela possesses the largest oil reserves in the world and a population of approximately 30 million people. For decades, it was the richest country in Latin America. However, the collapse of oil prices, coupled with the incompetence of the government led by former bus driver Nicolás Maduro—who succeeded Commander Hugo Chávez, the father of the Bolivarian revolution in 2013—has plunged the country into the most serious crisis in its history.
Ninety-three percent of the population consumes less than two meals per day; 82% live below the poverty line, and one in two Venezuelans is in absolute misery. Inflation, currently at 800%, continues to rise and could reach 2,200% by the end of 2017, according to the International Monetary Fund. The Fitch rating agency has classified Venezuela among the countries at risk of default.
Before the crisis, oil accounted for 96% of the country’s financial income. The dramatic decline in barrel prices—from $95.07 in January 2014 to $24.38 in January 2016—has devastated public finances. The increasingly militarized government is no longer able to secure basic necessities for the population. Many industries, lacking access to raw materials, have been forced to close, leaving countless workers unemployed. Even the colossal Coca-Cola, which employed 7,300 Venezuelans, halted production due to a lack of sugar.
In response to the crisis, President Maduro declared a "state of economic emergency." His government, a continuation of Chavism but lacking the charisma of its predecessor, has implemented water and electricity rationing. A small percentage of the population enjoys privileges amidst the crisis: corrupt state officials, military generals, and the so-called boliburgueses, the new wealthy elite who have managed to thrive in this situation. The majority of residents must endure long lines outside the few shops and supermarkets that remain open, desperately trying to purchase the limited food still available.
In addition to the economic crisis, a health emergency has emerged. While Venezuela was the first country to eradicate malaria in 1961, public hospitals now have less than 5% of the necessary medicines to treat those who are already suffering from severe malnutrition and are hospitalized under deplorable hygienic conditions. About one in three patients dies in a hospital bed.
The crisis has primarily impacted the middle class: workers and small artisans who, due to the economic collapse, suddenly found themselves without jobs and have since crowded into the barrios of the capital, Caracas, as well as Valencia and other major cities in Venezuela.