Since the demise of Venezuela’s late president Hugo Chávez in 2013, Venezuela that was once among Latin America’s richest countries has been on a downward spiral and it seems it has hit rock bottom. This is a country that has more oil than Saudi Arabia but with higher poverty rates than Colombia. Hugo’s successor, Nicholás Maduro has experienced backlash from inside and outside forces, citing economic mismanagement, corruption, and political oppression as the main reasons for opposition. Juan Guaidó, President of the National Assembly has been proposed as Maduro’s replacement, pending new elections. This saw the rise of political tension in the country, with more than 1.5 million people having fled in attempts to save themselves and their families.
The prevailing economic situation has left most people surviving on a meal a day with most lacking basic social amenities like tissues. Children are the most vulnerable victims in the midst of this political siege with reports of malnutrition and treatable diseases now spreading at a fast rate. The oil that made Venezuela shoot up economically, is now being subjected to tough sanctions by international governments like the U.S.A., in bid to ease the political tension, by crippling Maduro’s government as oil is their main source of cash.
Security forces in Venezuela, who are perceived as key players in this crisis are seen to place their loyalty in President Maduro. Due to this loyalty, Maduro has rewarded the security forces with frequent pay raises and put high ranking military men in control of key posts and industries. The problem Venezuela is facing currently can be traced back to the Socialist government of which President Maduro and his predecessor, late President Hugo Chávez were members. This was back in 1999 when the socialist government came to power in a time when Venezuela had large inequality.
Late President Chavez in promoting socialism, introduced price controls for basic goods in a bid to make them more affordable for the poor. They capped the price of flour, cooking oil, and toiletries. This initiative was transient as a few Venezuelan businesses producing these items no longer found it profitable to produce these goods. Critics also blame the foreign currency controls brought in by President Chavez in 2003 for the failure of this initiative. Many Venezuelans found it hard to freely buy dollars as only those deemed to have valid reasons such as importing goods were allowed to change their bolivars (Venezuelan currency) at a fixed rate set by the government. This, in turn, gave rise to a flourishing black economy in dollars.
The political tension saw inflation rise at its highest in Venezuela. By the end of 2018, prices had doubled every 19 days on average. This saw many Venezuelans struggling to afford basic amenities like food and toiletries. The Venezuelan government came up with what they termed as ‘economic package.’ This economic package was part of the governments’ solution in helping Venezuela’s already failed economy. They referred to it as the ‘magic formula.’ The measures in the ‘economic package’ included:
- Circulation of new banknotes of 2, 5, 10, 20, 50, 100, 200 and 500 sovereign bolivars and two new coins.
- Raising the minimum wage to 34 times its previous level.
- Raising VAT by 4% to 16%
- Curbing Venezuela’s generous fuel subsidies for those not in possession of a ‘ Fatherland ID’.
President Nicholás Maduro had Venezuela’s border with Brazil closed in an effort to block humanitarian aid into the country. Juan Guaidó, the self-declared Venezuelan president, on the other hand, has vowed to bring tons of aid donated by the United States and other countries into Venezuela. Other than closing Brazil’s border, Venezuela’s government further announced that they would block air and sea travel between Venezuela and three Caribbean islands, where the opposition said it wished to stage relief supplies.
In retaliation, the U.S. government announced new sanctions to pressure Venezuela’s President to stop blockage of humanitarian aid. The U.S. and other Western governments who support Juan Guaidó have been supplying humanitarian aid through Colombia’s border. Due to this, Maduro has planned to close the Colombian border.
A live concert was organized at the Colombia-Venezuela border as a way of pressurizing Maduro to let humanitarian aid into Venezuela. He was not pleased with this and ordered a shutdown of Google services to prevent live streaming of the live aid concert.
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