Venezuela: On the Brink of Devastation
Over three months of protests in opposition to the Venezuelan president, Nicolás Maduro, coupled with U.S. economic sanctions, crippled the bolívar, only increasing food, medicine and gas shortages. A study by Venezuelan universities found that 75 percent of the population has lost an average of 19 pounds due to the lack of food. 120 people died in the months of violent protests, with more likely to suffer a similar fate at the hands of medicine and vaccine shortages. Some families can’t even afford the propane to cook their own food, resorting to open fires or other temporary solutions. The cost of food rose 17 percent in July, while the bolívar fell by half to the dollar at the end of the month, reducing the minimum wage to an equivalent of just $5.
One of the largest contributing factors has been the failure of Petróleos de Venezuela, state oil company and parent company of Citgo. Petróleos reported a massive drop in revenue last year, and the trend seems to have continued. The company now relies mostly on foreign contractors to pump and refine its oil, generating heavy costs for a cash-strapped company and country. The government has responded by paying largely in bolívars and printing more whenever necessary. The 13 percent increase in the country’s monetary base in one week sent the bolívar’s value plunging and created an endless cycle of debt, the heaviest toll being taken on Venezuelan citizens.
The oil problems will likely only increase as Maduro’s politics continue to be condemned by many foreign leaders. The U.S. buys almost of Venezuela’s oil but has prohibited the trading of Petróleos stocks and bonds, as well as any new ones issued by the Venezuelan government. Sanctions also targeted highly-placed officials close to Maduro, and U.S. banks are no longer allowed to do business with the government or attached companies. President Trump, responding in his characteristic manner, called Maduro, “a bad leader who dreams of becoming a dictator.”
If Maduro continues on his course towards a one-party dictatorship, the protests will likely persist, causing more destruction, claiming more lives and further weakening the country. Volatility in the country’s politics and economy won’t do their currency any favors, leaving most citizens impoverished, starving and sick.
This time, he’s not far off. The protests were sparked by Maduro’s plan to give himself new powers and rewrite the country’s constitution in his government’s favor. On July 30, he voted to install a body of loyalists, the Constituent Assembly, to rewrite the constitution and govern the country for the next two years. The president’s power is almost limitless as he attacks members of the opposition and takes away the rights of his citizens. An official White House statement used the word dictatorship, saying, “The Maduro dictatorship continues to deprive the Venezuelan people of food and medicine, imprison the democratically-elected opposition and violently suppress freedom of speech.”
Venezuelans tried to speak out against the new measures in a referendum held by the main opposition parties, in which millions of citizens opposed the president’s actions. The government declared the referendum illegal and gave the people a different vote. Citizens go to the polls to vote on the new Constituent Assembly, without the option of rejecting it. Instead, they are allowed to vote for its members, choosing from a list of what The New York Times describes as “stalwarts of Mr. Maduro’s political movement.”
If Maduro continues on his course towards a one-party dictatorship, the protests will likely persist, causing more destruction, claiming more lives and further weakening the country. Volatility in the country’s politics and economy won’t do their currency any favors, leaving most citizens impoverished, starving and sick. Other countries will continue to condemn Maduro’s actions, perhaps strengthening the current sanctions or adding new ones, worsening the plight of the Venezuelan people. In the next two years, the country once envied by its neighbors will continue to degrade unless Maduro and his Constituent Assembly rapidly right their sinking ship.