Daniel Halliday
Jan 5 · Last update 2 mo. 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?
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US sanctions
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Venezuela’s involvement in the illicit drugs trade
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Venezuela’s international relations could make things even worse
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The manipulation of democracy
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Corruption plain and simple
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Economic failure
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US sanctions

Economic warfare, in the form of harsh economic sanctions to destabilise the country, overthrow the regime and install a more agreeable one, is the real reason for the economic and humanitarian crisis in Venezuela. Alfred de Zayas, the UN Independent Expert on the Promotion of a Democratic and Equitable International Order, has described these sanctions as illegal and a possible crime against humanity under international law. He was the first UN rapporteur to visit Venezuela in 21 years, de Zayas recommended the ICC investigate economic sanctions against Venezuela under Article 7 of the Rome Statute, and suggested good faith negotiations between government and opposition to be the only true solution to this crisis.

Despite this recommendation to the UN and wide spread condemnation of the US involvement in this destabilisation the US continues its effort to destabilise the country. On the 10th of January US educated Venezuelan opposition leader Juan Gauidó swore himself in as interim president of Venezuela, this was followed by a swift backing of Gauidó's actions by Donald Trump's government. The US government has since place a shipment of aid on the Colombian-Venezuelan border in further efforts to destabilise the country, prompting Maduro to send troops to the border which has led to recent outbreaks of violence. irishexaminer.com/breakingnews/world/former-un-rapporteur-us-sanctions-against-venezuela-causing-economic-and-humanitarian-crisis-900603.html aljazeera.com/news/2019/02/venezuela-brazil-border-violence-reports-25-killed-190225104507514.html

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Daniel Halliday
Feb 25
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DH edited this paragraph
Despite this recommendation to the UN and wide spread condemnation of the US involvement in this destabilisation the US continues its effort to destabilise the country. On the 10th of January US educated Venezuelan opposition leader Juan Gauidó swore himself in as interim president of Venezuela, this was followed by a swift backing of Gauidó's actions by Donald Trump's government. The US government has since place a shipment of aid on the Colombian-Venezuelan border in further efforts to destabilise the country, prompting Maduro to send troops to the border which has led to recent outbreaks of violence. https://www.irishexaminer.com/breakingnews/world/former-un-rapporteur-us-sanctions-against-venezuela-causing-economic-and-humanitarian-crisis-900603.html https://www.aljazeera.com/news/2019/02/venezuela-brazil-border-violence-reports-25-killed-190225104507514.html
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.

This changed as the corruption of drug trafficking moved up the ranks of the Venezulean administration leading a “crackdown” on Colombian Cartels, but instead of dismantling them Chavez (or officials close to him at least) effectively took over the industry. This allowed corruption and violence to sore leading to Caracas, the Venezuelan capital, being named the most violent city on Earth in 2015. 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. cnnespanol.cnn.com/2015/11/11/autoridades-de-ee-uu-detienen-a-dos-familiares-de-la-primera-dama-de-venezuela

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Daniel Halliday
Feb 25
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DH edited this paragraph
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.
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 may have 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. This would effectively be taking control of the countries resources even further away from the Venezuelan people, and into the hands of another questionable authoritarian regime. But with the economic mismanagement being so bad as to be described as 'Dutch disease', with no other strong industry to prop up this failing economy the case of defaulting on this Chinese debt looks closer to reality. forbes.com/sites/anderscorr/2017/04/21/remove-maduro-and-china-send-80-billion-in-emergency-aid-to-venezuela/#460a26382a2f

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Daniel Halliday
Feb 25
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DH edited this paragraph
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 may have essentially made itself a majority stakeholder in the whole of the Venezuelan economy.
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.

The country is in desperate need of a political and economic reformer, one that can also get the army and cartels behind them, an unfortunate fact of the violent political landscape in Venezuela. However, it remains unclear if the US backed Juan Guaidó could be such a candidate, being a fairly unknown US-friendly politician would undoubtedly cause suspicion with Chavistas in the country. Imprisoned ex-opposition leader Leopold Lopez may have been a better candidate being both well known and a supporter of grass-roots education and employment policies. However with the Máduro government maintaining such a tight grip on power the lack of democracy in Venezuela acts as a sort of ‘glue’, holding all of the negative policies together and helping perpetuate the terrible situation in this country. theatlantic.com/international/archive/2017/12/fixing-venezuela/548465

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Daniel Halliday
Feb 25
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DH edited this paragraph
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.
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 to 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 and the siphoning of public funds by corrupt hands that has lead to so many problems for Venezuela as a country.

Venezuela is part of a bigger pattern of corruption South America, a region whose nation’s economy’s were all founded on, and became increasingly corrupted by, a maintained dependence on slavery. This corrupt system inherited from Europe, over such a long time without adequate reform, has resulted in the people of Venezuela having similar living conditions to some war-zones of the world. This widespread normalised corrupt behaviour was only made worse by the discovery of oil but is the main overarching reason behind the majority of social and political problems in the country. origins.osu.edu/article/roots-venezuelas-failing-state

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Daniel Halliday
Feb 25
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DH edited this paragraph
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 to 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 and the siphoning of public funds by corrupt hands that has lead to so many problems for Venezuela as a country.
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. The corrupt use of oil in Venezuela has been described as Dutch disease, compared to the decline in Dutch markets following its over dependence on natural gas. Venezuela’s over dependence on oil wealth and failure to diversify the economy is far greater though and has allowed the country’s economy to spiral out of control. 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.

Since the beginning of oil drilling in Venezuela in the early 20th century the Venezuelan 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. Oil in Venezuela is now acting in a similar way to conflict resources in some of the world’s war-zones, but instead of rebel groups and the government mismanaging resources to perpetuate violence against each other, the Venezuelan government is just using it to perpetuate its own existence ignoring the terror they are inflicting on the Venezuelan people. panoramas.pitt.edu/economy-and-technology/venezuelas-case-dutch-disease-cursed-oil

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Daniel Halliday
Feb 25
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DH edited this paragraph
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. The corrupt use of oil in Venezuela has been described as Dutch disease, compared to the decline in Dutch markets following its over dependence on natural gas. Venezuela’s over dependence on oil wealth and failure to diversify the economy is far greater though and has allowed the country’s economy to spiral out of control. 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.
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