From Riches to Rags, the History of the Venezuelan Crisis

From Riches to Rags, the History of the Venezuelan Crisis

By Marcos Ommati
July 26, 2019

It is no surprise that countries — besides Brazil — that have received most of the migrants fleeing the crisis in Venezuela are Colombia, Ecuador, and Panama. In 1821, after a series of short-lived declarations of sovereignty, which followed several bitter battles, Gran Colombia, comprised of those countries, won its independence from Spain. Simon Bolívar played a key role in the struggle, forever winning the hearts of Venezuelans. Less than a decade later, Venezuela separated from Gran Colombia to become an independent country. In the 1930s, Venezuela was already one of the world’s largest oil exporters, with one of the largest crude oil reserves on the planet.

The country developed and became a relatively stable democracy, and thanks to its vast oil reserves, one of Latin America’s fastest-rising economies. However, that great amount of petroleum became a curse rather than a blessing, with the country now virtually 100 percent oil-dependent. In 1983, a fall in world oil prices led the government to introduce widespread spending cuts. It became harder and harder to subsidize everything from the price of gasoline in gas stations to food in the supermarket with “petro dollars.”

International Monetary Fund

The Venezuelan president at the time, Jaime Lusinchi, signed a pact between businesses, trade unions, and the government to resolve the fallout, but he never enjoyed a smooth presidency. His successor, Carlos Andrés Perez, was elected in 1989 and had no other choice than to seek loans from the International Monetary Fund (IMF) to try to reenergize the country’s economy.

Historically, funds from the IMF come with a series of restrictions and highly unpopular conditions, particularly requirements for a vast reduction in social assistance spending. This situation caused the downfall of President Perez, and opened the doors for populist leftist leaders to arise. One of them was a young military officer named Hugo Chávez, who in 1992 led a failed coup attempt and was subsequently jailed, along with other disillusioned officers. Despite the failed coup, ordinary Venezuelans, tired of corrupt politicians and longing for “the good old days” of oil-based subsidies, admired the bravery of Chávez.

From jail to the presidency

Eventually, Chávez was released from jail and founded the Movement of the Fifth Republic. Casting himself as a leftist firebrand by selling the idea of giving power to the people and ending the corruption of the traditional political parties that had governed Venezuela for over a quarter of a century, Chávez won the 1998 general elections with 56 percent of the vote, becoming the new president.

Chávez began his presidency with the support of the people, when the price of a barrel of oil was selling for more than $100. Venezuela was a nation so awash in petroleum revenues that the leftist government spent huge amounts on social programs and, at one point, even provided almost all of the petroleum consumed in Cuba, in exchange for the support of Fidel Castro’s regime.

Once in power, Chávez replaced the existing Congress by creating a new National Assembly, which he controlled. He used his new National Assembly to rewrite the constitution to perpetuate himself in power, after muzzling the press as well as his opponents to get the law passed. Chávez served as president for 14 years, until his death in March 2013. However, his biggest promise to the Venezuelan people of improving poverty in the country never became a reality.

Bus driver

His replacement, Nicolás Maduro, was a former bus driver, union leader, and unconditional follower of Chávez, who had Maduro appointed to the National Assembly. As his handpicked successor, Chávez also appointed Maduro to become the secretary of State, the vice president, and finally anointed him as his heir. Maduro inherited a country in shambles, which had become more oil-dependent than ever, and increasingly divided.

As Venezuela’s situation worsens, the Maduro regime arrests opposition political leaders, shuts down news outlets and arrests journalists. In 2017, Venezuela’s Supreme Court, filled with Maduro loyalists, took away the powers of the National Assembly, increasing his control. The following year, Maduro was reelected in an election that a coalition of more than 50 countries says “lacked legitimacy.” Meanwhile, the situation continues to worsen, and pressure from the Venezuelan people, who are seeking an end to their hunger and daily struggles, is growing by the day.

According to UNHCR, the Refugee Agency for the United Nations, and the International Organization for Migration, which called the pace of the outflow staggering, the number of people fleeing Venezuela has now exceeded 4 million, or roughly 12 percent of its entire population.

In November 2018, Human Rights Watch warned of Venezuela’s “devastating health crisis,” and increasing rates of maternal and infant mortality, in addition to a spike in cases of measles, diphtheria, tuberculosis, and malaria. Susana Mújica, who suffers from kidney disease, summarized the critical situation in Venezuela in an interview with the British newspaper The Guardian: “We know the reality. It is crystal clear to us because we are the ones living this reality every day… Whether we live or die isn’t important to them. Their priority is staying in power.”