Daniel Halliday
Jan 5 · Last update 13 days ago.
What has caused so many problems in Venezuela?
Many nations have rejected the legitimacy of the Venezuelan government, with almost all Latin and North American countries recently calling for President Nicolas Máduro to step down and hand over power to the opposition. Why is the country with the world’s largest oil reserves suffering from so many social, political and economic problems?
Stats of Viewpoints
Venezuela’s involvement in the illicit drugs trade
0 agrees
0 disagrees
Venezuela’s international relations could make things even worse
0 agrees
0 disagrees
The manipulation of democracy
0 agrees
0 disagrees
Corruption plain and simple
0 agrees
0 disagrees
Economic failure
0 agrees
0 disagrees
Viewpoints
Add New Viewpoint
Venezuela’s involvement in the illicit drugs trade

The Venezuelan government under Hugo Chavez accused the United States Drug Enforcement Administration of spying in 2005, severing relations and ending US efforts to fight drug trafficking in the region. As a result Colombian drug cartels began to move into Venezuelan territory, following a new USDEA deal with the Colombian government in the same year. Venezuela increasingly became a safe haven for these cartels as they used drug money to buy protection from corrupt politicians, solidifying a firm narcotics manufacturing and distribution industry in the country. The effects this industry has had on the country is a complex one, but the role of the government in it has become increasingly clear as even family members of President Maduro have been caught trafficking drugs in 2015.

Agree
Disagree
Venezuela’s international relations could make things even worse

From 2003 onward Venezuela and China have made a growing number of large economic deals and have increasingly improved international relations. Since 2014 this has taken the form of $60 billion of ambiguous Chinese investments which currently seem to have been paid back in the form of oil barrels. China has also invested heavily in Petróleos de Venezuela, S.A. (the government owned oil company), but as Venezuela’s whole economy is dependent on this one industry China has essentially made itself a majority stakeholder in the whole of the Venezuelan economy. If Venezuela defaults and fails to pay back these Chinese loans, something that seems quite likely considering the economies dependency on the price of oil, China would lose this investment or could seize 75% of assets of PDVSA, effectively owning the country’s economy.

Agree
Disagree
The manipulation of democracy

A large contributing factor to the problems in Venezuela is the ongoing government actions designed to manipulate and bypass democracy. Nicholas Máduro’s government are essentially making any progress or social change impossible by forgoing human rights, imprisoning opposition leaders and manipulating votes, progressively making the situation in Venezuela only worse. This has lead recently to the Lima Group (a trans-American multinational body working towards the end of the crisis in Venezuela) rejecting the Máduro government and requesting them to step down and hand power to the opposition.

Agree
Disagree
Corruption plain and simple

The underlying theme behind all of Venezuela’s deep rooted problems is undoubtedly corruption. The country has been one of the highest ranking nations on Transparency International’s Corruption Perception Index since 1995. Corruption here can be largely linked government involvement in the oil industry in Venezuela, going all the way back to the start of oil drilling in 1938, it is without a doubt the misuse of this resource by corrupt hands that has lead to so many problems for Venezuela as a country.

Agree
Disagree
Economic failure

While the reasoning behind Venezuela’s numerous problems ultimately lay in a varied range of dire policies and events, the largest contributing factor to their economic issues lay in a lack of economic diversity. Since the beginning of oil drilling in Venezuela in the early 20th century their economy became so dependent on oil that the economy declined as all other sectors failed to develop in unison. The subsequent strengthening of the currency due to this sharp growth of one sector had the negative overall effect of making exports uncompetitive and causing imports to become progressively cheaper, leading to an economic phenomenon known as Dutch Disease. This has only worsened following a doubling down on similarly negative economic policy in recent times, leading to the highest hyperinflation in history of the country.

Agree
Disagree
Translate