Top 10 Facts About the Venezuelan Crisis
It was once an oil-rich capital of the world, but as of 2016, this South American federal republic has one of the world's worst performing economies. Welcome to WatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar.
Top 10 Facts About the Venezuelan Crisis
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It was once an oil-rich capital of the world, but as of 2016, this South American federal republic has one of the world’s worst performing economies. Welcome to WatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we’re counting down 10 crucial facts you should know about the ongoing crisis in Venezuela.
#10: What Is the Venezuelan Crisis? The Situation
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As of 2016, Venezuela has been in a massive social and political crisis as the country’s economy suffers in the wake of falling oil prices, increasing debt, and a drought triggered by the El Nino weather phenomenon. As food, medicine and energy shortages intensified, President Nicolas Maduro declared a state of emergency in May 2016, which, despite being challenged by the opposition-controlled National Assembly, was backed by the Supreme Court. According to the court, the measure is necessary in light of “extraordinary social, economic, political, natural and ecological circumstances that are gravely affecting the national economy.”
#9: How Will the State of Emergency Affect Citizens? The Numbers
The measure gives Maduro and the government even greater control of the country, allowing the president and the armed forces power to distribute and sell basic goods, services and food. It also creates an option for local authorities to reduce the private sector working week, as has already happened in the public sector, in an effort to conserve electricity. As inflation continues to worsen, food and medication shortages have grown more frequent and there are reports of looting across the country. The State of Emergency, initially set for 60 days, will look to rebalance what’s become an incredibly fraught situation.
#8: Who Is Currently Leading the Country? The President
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Nicolas Maduro took over as President of Venezuela in 2013, succeeding Hugo Chavez, who had essentially led since 1999. An ex-bus driver and trade union leader, Maduro has ‘ruled by decree’ for the majority of his tenure and has struggled to win approval ratings throughout his time in the position. As leader of the United Socialist Party of Venezuela, Maduro has labeled the current crisisas a right-wing ploy to oust him from power, orchestrated by the United States and linked to the recent impeachment of fellow leftist Dilma Rousseff in Brazil. “Washington is activating measures at the request of Venezuela’s fascist right, who are emboldened by the coup in Brazil,” he said.
#7: Who Opposes the Government? The National Assembly
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Despite Maduro’s position as President of Venezuela, the National Assembly is majority controlled by his political opposition, following legislative election losses in December 2015. The Assembly is pushing for a recall referendum against the president, as well as changes to the constitution, which could shorten his term from six years to four. The State of Emergency has been slammed by Maduro’s rivals as a ‘desperate’ and panicked attempt to maintain control. There’s also an ever-increasing number of public protests against Maduro as Venezuelan living conditions continue to deteriorate.
#6: Is the Economy Heading for Collapse? The Numbers
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The International Monetary Fund has predicted that the Venezuelan economy will contract by 8% in 2016, while it shrank around 5.7% in 2015. The economic situation is bleak, and analysts are predicting that it will only get bleaker. The IMF has estimated that inflation could rise to as much as 720% in 2016, tipping Venezuela into all-out collapse. The country is also heavily in debt, with no immediate means of paying off what’s owed. According to the Telegraph, around $116 billion is due over the next two decades, with around a fifth of payments due in the next two years.
#5: How Have Oil Prices Affected the Economy? The Exports
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As an OPEC member with the world’s largest proven oil reserves, Venezuela’s economy has been through some exceptionally positive spells in recent history. However, as the price of oil has fallen so drastically in the last two years, and because oil accounts for around 95% of Venezuela’s export earnings, the current economic crisis is distinctly caused by changing prices. According to IMF estimations, the Venezuelan state earned around $80 billion through oil in 2013, the year Maduro took over as President. However, the projected figure for 2016 is only $20-25 billion, with massive damage being inflicted in 2014 in particular, when prices fell by around 50%.
#4: How Has Inflation Affected the Country? The Restrictions
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Food and healthcare shortages are among the most pressing problems, with Venezuelans queuing in the hundreds for basic supplies, which are rapidly running out. As the government massively cuts imports in a bid to save money, supermarkets are struggling to stock food and hospitals are running dangerously low on medicine. As a result, a black market has emerged for buying and trading products, which are now scarcely attainable. There’s also a growing problem with looting, as an already notoriously violent country turns more desperate by the day – according to the Venezuelan Observatory of Social Conflict, there were more than 166 looting incidents between January and April 2016 alone.
#3: How Have Citizens Reacted to the Current State of Affairs? The Protests
The Observatory of Social Conflict also says that there were 2,138 protests in Venezuela during the first four months of the year, indicating exactly how unhappy the population has become. CNN reports that a key poll now shows that almost 70% of Venezuelans believe that Maduro should be replaced, and many are taking to the streets to make their feelings known. Caracas, theVenezuelan capital, has seen tensions rapidly rise with its residents as black market trading and lootings intensify. Venezuela also has a problem with violent crime levels, and has one of the world’s worst homicide rates. Therefore, analysts are worried that increasing public anger could result in bloodshed.
#2: Have These Protests Happened Before? The Shootings
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Venezuela, and Caracas in particular, is no stranger to violent protest. Beginning in 1989, the Caracazo was a wave of demonstrations and riots in the city, which escalated into shootings and massacres. At that time, protestors were targeting economic reform brought in by the then-government, and a series of weeklong clashes resulted in hundreds of deaths. Fights broke out between those for and against the government, but also between the people and the country’s security forces and military – unofficially, many believe thatVenezuelan police killed thousands of protestors during Caracazo. As Maduro’s state of emergency hands increased control to the Venezuelan forces in 2016, some fear that we could yet see similar scenes to those they had almost 30 years ago.
#1: Will the International Community Intervene? The Aid
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The Venezuelan crisis is front-page news in the Americas, but the international reaction is still somewhat muted. This could be in part due to Maduro’s anti-US narrative, where he insists that the country’s problems can be blamed on a clash between right and left political ideologies. The White House has recently renewed legislation to sanction human rights abuse and corruption in Venezuela, but is unlikely to get involved at this stage and risk giving Maduro ammunition for his anti-America rhetoric. The more optimistic onlooker might still believe that Venezuela can overcome its problems without need for international help at all. Maduro lost the National Assembly in late 2015, and has been losing public support since the start of 2016. It just remains to be seen whether he can cling to his position, or whether it’ll be wrestled away from him. Did these facts get you thinking? To vote for which news story is covered next head over to WatchMojo.com/suggest, and be sure to hit that subscribe button for more newsworthy top tens published every week!
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