The growing crisis in Venezuela
Three million people have fled imploding Venezuela. How did it get this bad?
Why the exodus?
Venezuela’s economy and social order are collapsing, leaving 75 percent of the population desperately poor and without sufficient food. The physical currency, the bolivar, is all but worthless, while the petro—the new digital currency that socialist President Nicolás Maduro introduced last year, tied to the price of oil—is largely fictitious. The IMF predicts that the country’s inflation could reach 10 million percent this year. Not that there’s much to buy: Store shelves stand empty, and soldiers guard warehouses against looters. Most Venezuelans are now protein-deprived, and they joke grimly about the “Maduro diet” that has left adults thin and children malnourished. Hospitals lack medicines and basic supplies, and surgical patients are told to bring their own cleaning products and bandages. The murder rate has soared to 15 times the global average, and crime is rampant. “They rob you in the street, on the beach, in the market, at the hospital,” said teacher Yamileth Marcano. “It’s terrible to live like this.”
What caused the collapse?
The radical socialist regime set up by Hugo Chávez worked fine for a few years—until it ruined the country. First elected in 1998, Chávez redistributed the country’s land and massive oil wealth to benefit the poor, paying for his programs by nationalizing the oil industry—which now accounts for 98 percent of export earnings—and the banks. But his price controls choked the country’s businesses, and by the time Chávez died in 2013, inflation had soared to nearly 50 percent. Then global oil prices fell dramatically, leaving his successor, Maduro, with a recession that became a crisis. Without the flood of foreign oil dollars flowing in that could be used to buy products, imports dried up and shelves emptied of basic necessities. Meanwhile, the country became a narco-state, with many top generals and politicians—including former Vice President Tareck El Aissami—indicted in the U.S. for drug trafficking and money laundering. Rather than addressing these problems pragmatically, the authoritarian Maduro has devoted his energies to suppressing dissent and preventing a coup.
How has he survived?
Through the raw exercise of power. The opposition won the 2015 parliamentary election and now dominates the National Assembly. But Maduro rammed through changes that eviscerated the assembly’s power; he then created a new Constituent Assembly, packed with his supporters, to rewrite the constitution. Under the guise of an anti-corruption sweep, he fired the top Chávez loyalists who might have challenged him, such as former state oil chief Rafael Ramírez, and he jailed charismatic opposition leaders such as Leopoldo López. When the military began grumbling, Maduro purged it brutally. Seven generals, who collectively controlled 60 percent of the troops, were arrested last March on conspiracy charges. “Not only are intelligence agents detaining and torturing members of the military,” said José Miguel Vivanco of Human Rights Watch, “in some cases they are also going after their families or other civilians.”
Why haven’t the people risen up?
Protests began in earnest in 2014, a year after Maduro took office, and they have flared up every year since. But the regime has violently crushed these demonstrations. Riot police and armed pro-government gangs known as colectivos routinely bludgeon, tear-gas, and even shoot demonstrators. Hundreds have been killed and thousands arrested. Last year, there was much less organized resistance, partly because opposition leaders are exiled or jailed, and partly because Venezuelans are mostly focused on getting food and surviving—or getting out. Since Maduro took office, nearly 3 million people have emigrated—some 7 percent of the population. And the exodus is continuing. “Considering the magnitude of Venezuela’s crisis,” says Luis Almagro, secretary general of the Organization of American States, “there may be up to 10 million Venezuelans who will have to abandon that country.”
Where have they gone?
More than 1 million are in neighboring Colombia, another half-million are in Peru, and most of the rest have ended up in Ecuador, Argentina, Chile, and Brazil. At first, Colombia reacted to the Venezuelan influx with generosity, offering the migrants work permits and health care. But with some 5,000 people a day leaving Venezuela, border towns simply can’t cope. “We are experiencing the most outrageous migratory and humanitarian crisis in the region’s recent history,” Colombian President Iván Duque said at the U.N. last year.
Will other nations step in?
After Maduro won a new six-year term last year in a rigged election, 12 Latin American nations, including Colombia and Brazil, said they would not recognize the Maduro administration and have pledged to isolate him. But a military invasion is unlikely. Venezuela still has the backing of socialist ally Cuba, while China has given it loans and Russia has offered military aid. Change will have to come from within. The opposition-controlled National Assembly picked a new leader this year, Juan Guaidó, and he vows a new fight. “We have plans,” Guaidó said, “to call the people to the streets.”
Still importing Venezuelan oil
The U.S. and Venezuela have deep economic and energy ties, but relations soured in 2015, when the Obama administration declared Maduro’s authoritarianism a threat to U.S. national security and hit key Venezuelans with sanctions. The Trump administration went further, freezing the U.S. assets of Maduro and his top officials and their companies, as well as sanctioning Venezuela’s gold exports, its cryptocurrency, and its largest media company, Globovision. Maduro has found it convenient to blame American sanctions for his country’s woes, saying the U.S. is waging “economic war” against him. But even though tensions are high, the Trump administration has declined to impose sanctions on Venezuelan oil. Venezuela remains one of the U.S.’s top five suppliers of foreign oil, and refineries on the U.S. Gulf Coast depend heavily on crude from the South American nation. More importantly, sanctioning Venezuela’s only remaining source of money would almost certainly cause the country to collapse. “If you break it, you buy it,” said George David Banks, a former international energy adviser to Trump. “The White House doesn’t want to own this crisis.” ■