Venezuela: A Crisis To Watch


The decline of Venezuela from an oil-rich powerhouse to economic disaster has been extensively documented. However, in 2017, the magnitude of the crisis within Venezuela began to reveal itself. The country initially plunged into recession in December 2014, after oil prices dropped dramatically and the government was unable to manage the consequences. Three years later, the country is in the grips of a national emergency. Inflation is so high that $1,000 local currency purchased when the current Venezuelan President Nicolas Maduro was coming into power in April of 2013 would be worth a mere $1.34 today. The government’s traditionally generous social programmes have also become unfeasible as a result of the lack of oil revenue, contributing to shortages of food and resulting in malnutrition. Venezuela is also currently suffering from rolling blackouts, rising unemployment, soaring rates of violent crime, a lack of medicine and a healthcare crisis.

The economic collapse has been closely followed by political turmoil, as citizens decry the government’s lacklustre response to the crisis and accuse the president of working to erode Venezuela’s democracy. Indeed, Maduro seemingly has been taking steps to ensure popular discontent does not curtail his power. One of the most troubling elements of political turmoil was the establishment of the newly elected Constituent Assembly in July. The prospect and result of the move was responsible for country-wide and ultimately violent protests from April to September, with Reuters reporting that more than 120 people had been killed, as well as hundreds injured and thousands imprisoned. Solely of government loyalists, the body assumed the role of the opposition-controlled National Assembly and effectively eliminating political opposition against the government within state institutions.

In addition to the growing authoritarianism exhibited by President Maduro, his continual denial of the extent of the problem and refusal to revive the country’s economy represents a serious geopolitical and humanitarian challenge. The economic situation is expected to worsen in 2018, with the International Monetary Fund having predicted that Venezuela’s triple-digit inflation rate is set to jump to more that 2,300% in 2018, further limiting the capacity of the government to provide basic services and ensuring food insecurity and severe health needs will remain persistent challenges. The full effects of the Venezuelan crisis are already beginning to be felt beyond its borders, as a result of growing displacement. Thousands have already fled to neighbouring countries such as Colombia and the United States. There are already signs that even these numbers are trying regional hospitality, but the exodus created by total collapse in Venezuela would spell disaster for Latin America.

Much of the international community has been outspoken in condemning the actions of the Venezuelan government, as well as expressing concern with regards to the welfare of its citizens. A number of countries were critical of Venezuela’s election of the Constituent Assembly for example, with ambassadors from the United Kingdom, France, Spain, and Mexico, among those who have stated that will not recognise and therefore give legitimacy to the body. Brazilian President Michel Temer has also spoken out, stating that “there is no more space for non-democratic alternatives in South America” and that Brazilians are “on the side of the Venezuelan people.” The United States has shared similar sentiments and described President Maduro as a “dictator who disregards the will of the Venezuelan people.” President Donald Trump raised in August 2017 that intervention was not off the table, commenting to reporters that “we have many options for Venezuela including a possible military option if necessary.” Nevertheless, the Pentagon has said that it has yet to receive orders on any such action in Venezuela.

Apart from the application of diplomatic moves such as public condemnation, the international response has also included utilising economic tools in the hopes of pressuring President Maduro into ceasing the current direction of government. Mercosur, the South American trade bloc comprised of Argentina, Brazil, Uruguay, Paraguay, and Venezuela, contributed to the international pressure on Maduro by temporarily suspending the country in 2016 and then indefinitely in 2017. Argentina’s Foreign Minister, Jorge Faurie, noted that “it is very bad to push a brother out of the door, but it did so with conviction because we are watching a situation that causes us great pain.” The United States has taken action by imposing sanctions on Maduro, many of its senior officials, as well as the country’s oil company. The European Union has also pursued “gradual and flexible” sanctions in an effort to persuade the president to calm the situation, in addition to placing an arms embargo on Venezuela.

Despite the good intentions of these efforts, their effectiveness has yet to be seen. President Maduro has greeted them with derision, laughing off the United States’ censure initially and subsequently pointing to the sanctions as further evidence that it is the U.S. that is responsible for the country’s economic woes. The reaction was similar with regards to the imminent sanctions by the E.U. bloc, which Maduro called “stupid” and representative of “their lamentable and shameful subordination to the U.S. government.” While this may be the viewpoint of the Venezuelan government, the European Union is implementing sanctions with care, in order not to push the country towards any further economic and political collapse. As Spain’s Foreign Minister Alfonso Dastis asserted, “everything we do is aimed at seeking dialogue between the government and the opposition to find a democratic and peaceful solution.”

Moving forward, the challenge will be confronting and coordinating the layered nature of the crisis. On one hand there is the fundamental economic strife that Venezuela is in. The concern here is that current difficulties to repay its outstanding debt may prompt tighter economic sanctions, leading to a full default and thus a collapse of the Venezuelan economy. As noted in a report by Relief Web, “potential negotiations over debt payment with international partners could avoid full default, but are unlikely to improve the economic situation.” At the very least it is vital that the sanctions imposed by foreign governments continue to be focused on the Venezuelan leadership, so as not to inadvertently contribute to the suffering experienced by the country’s population. It appears so far, in spite of Maduro’s rhetoric to the contrary, that this is being carefully monitored. On the other hand is the political divide in the country. This will demand ongoing efforts both domestically and internationally to foster dialogue between the government and its opposition.

Presidential elections are scheduled to occur towards the end of the year. In an optimistic outlook, as noted by Vox, if conducted fairly and the opposition is permitted to participate it could mean the end of Maduro’s presidency and weaken the political movement that brought him to power. Considering the way in which the elections held at the end of 2017 were conducted, which saw the opposition parties prevented from participating and a ban on the salient opposition leader from political activity for 15 years, the likelihood of this occurring is being met with a legitimate degree of scepticism. In the face of a united opposition there is a good chance that Maduro will strengthen, not ease, his repression and push Venezuela closer to dictatorship. While there remains considerable uncertainty, it is vital that the actions of the international community are considerate of the country’s humanitarian crisis and are conducive to dialogue.