Venezuelan Crisis: How Did It Get This Bad?

It is undoubted that the crisis in Venezuela has become one of the worse man-made disasters in the world. Although Venezuela was once a prosperous and stable petro state, many became wary of its ability to climb back from its current form, while others have presumed it as a failed state. In 2018, an estimated number of 2.4 million Venezuelans currently lived as refugees in Latin America and the Caribbean, and 600.000 more are currently hosted within other regions (UNHCR, 2018). People began to wonder how it got this wrong, and plenty would have blamed President Maduro for the current grim situation. In investigating the issue, this paper will discuss the significant causes behind the Venezuelan Crisis. I argue that the Venezuelan crisis results from years of state mismanagement. With that being said, this article will focus on two arguments: Venezuela’s long history of oil dependence and Chavez’s contribution to increasing the unchecked presidential powers.

The fall of the oil price is said by many to have contributed to the crisis at hand. Oil prices dropped to 70 percent in 2014, plunging the once-mighty petrostate into a sudden collapse. However, the effects would not be as critical as today's if the nation had diversified its exports and not put oil production revenue as its primary financial income. Oil has become the lifeblood of Venezuela since its first discovery in 1914, transforming a once agrarian-oriented nation into a dominant petrostate (Gallegos, 2016). Under the Venezuelan Minister of Mines and Hydrocarbons Perez Alfonzo, the former 50–50 agreement was changed into a 60–40 split over oil production revenue, favoring the government over private oil companies. He also led the creation of the Organization of the Petroleum Exporting Countries, OPEC, to monopolize and secure the global oil price. The rising flow of income from oil has put off many of Venezuela’s agricultural businesses as people migrated to the cities, leaving the country to rely on imported goods. Furthermore, the rapid growth of income from oil has caused its decreasing dependence on public taxes, which also lessened its political accountability (Gallegos, 2016).

The power over the oil industry was soon to be seen centralized upon the presidential position, and with oil being its primary source of income, the whole nation continues to rely solely upon it. Ironically, Venezuela had already suffered the same circumstances it has today back in the 1980s. The crisis forced the country to take its state-owned Petróleos de Venezuela (PDVSA) oil company coffers, devaluating the bolivar currency, harsh capital controls, and cutting out perfume, lingerie, and alcohol imports to keep the country afloat while encouraging entrepreneurship in the hope of diversification. However, the principle of cutting high reliance on oil was dimmed unpopular in the country; many only focused on government corruption. Unfortunately, this was not the only case (Gallegos, 2016).

By 1999, President Hugo Chavez was highly known as the man who brought change. After his radical move to reform the constitution, he fired a massive chunk of PDVSA officials through his public relations stunt on national television and replaced them with his trusted allies who had no experience in the business. In addition, he also fired around 18,000 PDVSA workers, taking out 40% of its total workforce (Gonzales, 2018). Before Chavez, the PDVSA gained ample autonomy from the government, learning to limit the amount of money being given to the government and prioritize the usage of monetary funds in assets rather than keeping them in coffers. Nevertheless, Chavez saw this as elitism that must be taken down.

On the other hand, the opposition saw this action as his attempt to put a substantial grip upon the oil company, which led to the failed 11 April coup d’ état in 2002. Unlike what most believed, Chavez was no different from his predecessors; most of his policies were recycled out of his predecessors’ with far more dire impacts, and yet the only thing that had helped his name be held high was the rise of oil prices. As revenue increased, Chavez used the opportunity to create his social spending programs and proclaimed Venezuela as the face of “21st Century Socialism”. Chavez became growingly ambitious in his expenditure, and fortunately, the steady high oil price kept him from tarnishing. After his death in 2013, it was proven that his social spending was not as marvelous as everyone believed it was. His programs have weakened businesses, created fewer real job opportunities, and increased the dependence of Venezuelans on the state. Capital controls have led to the rise of black markets; subsidized gasoline encouraged Venezuelans to smuggle oil out of the country, and artificially low-interest rates gave the façade to remain consumerist. By the time oil price decreased, it was a matter of time before the crisis returned (Gallegos, 2016).

It is without a doubt that Maduro’s regime is classified as an authoritarian government, and his way of managing the situation has caused further damage to the dying country. However, it is essential to underline that Maduro did not assume these privileges solely throughout his period. As was mentioned, in 1999, the former paratrooper commander turning politician Chavez won the election in a landslide as he provided fresh air and change to the Venezuelan people who had suffered in poverty under his predecessors. Chavez called for a constitutional reformation and the establishment of the National Constituent Assembly, which made him unpopular among his political opponents. The new 1999 Constitution of Venezuela was then established not long after. It must be understood that the people of Venezuela were in dire conditions before Chavez rose to power, and Chavez had successfully used this condition, for most parts, to his benefit (Gallegos, 2016).

To give some context, the Constitution has often been used as a manipulative tool over the course of Venezuelan history. Although the Constitution symbolizes the supremacy of law above the government, it is unfortunate that it is tampered with and constantly transformed has made its effectivity to be questioned in the country (Gicherman, 2012). The Venezuelan people have longed for the years under the former dictator Marcos Jimenez, a firm hand that would root out the rot within the country and totalitarian methods that kept crime in check. Chavez served this craving on the platter (Gallegos, 2016). The new constitution gave more power to the presidential position, including the ability to dissolve the National Assembly under certain circumstances (Government of Venezuela, 2020). It also changed the term of the presidency from 5 to 6 years. The National Assembly was reformed into unicameral legislation (Crooker, 2006) and lost its power to remove the president from office. With the people's complete trust, Chavez successfully made the constitution his political tool. Many of its contents consist of loopholes, consequently putting the people under no protection of the law and no instrument in objecting to the government. In contrast, the government is armed with sufficient tools to justify any actions, thus eliminating the separation of power and checks and balances. The Justiciary was also being weakened and rendered unresponsive. A once independent institution has been put beneath the decision-makers, while Chavez’s political allies have dominated its membership. Overall, the Judiciary has become another tool for the Executive branch (Gicherman, 2012).

To top it all off, the increasing discontentment from Chavez’s rivals became ever more apparent, and on 11 April 2002, a political march was conducted, demanding Chavez’s immediate resignation. The protestors were met with angry Chavez sympathizers by Baralt Avenue as barrages of rocks were thrown right at them. At the same time, police officers began to shoot down tear gasses as they hid behind the National Building. They met with more resistance from Chavistas as they got closer to the Miraflores Palace. But the peaceful protest soon turned for the worse as protestors began to fall one at a time as real-life bullets flew in the air (Nelson, 2009). Nineteen people from both supporters and opponents of the government were confirmed dead (Toro, 2012). The event caught the media’s attention and took sides against the government (Fossett, 2014). Soon, the military also took hands against Chavez and successfully took over the palace and captured him. The coup only succeeded for 45 hours as Chavez was re-installed to office by his sympathizers. Despite his immediate return, the shootout in Baralt Avenue was a PR nightmare, and by 14 April, workers were sent to clean up the damages. No further investigations were conducted while releasing the narrative that the opposition started the shootout. Chavista victims were given incentives and named heroes (Nelson, 2009). Also, to prevent the possibility of another biased media campaign against Chavez, the government spent the next decade expanding its control over various media outlets. In 2004, the Law on Social Responsibility in Radio and Television was enacted, giving the government a wide latitude to censor media. The law was expanded in 2011 to include the internet and social media (Fossett, 2014).

Although Maduro has undoubtedly caused the current condition of Venezuela to become ever more severe, it is also crucial to consider that past policies have immensely contributed to the circumstances. The two arguments above, namely Venezuela’s long history of oil dependence and Chavez’s contribution to increasing the unchecked presidential powers, prove that the Venezuelan crisis results from years of state mismanagement. With that being said, it is unfortunate that the crisis may show a darker issue within the country, and taking down the current administration will only solve a small fraction of the problem that has run deep within Venezuela.

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