VENEZUELA is on the brink of collapse as it in the middle of a hyperinflation economic catastrophe and it is becoming one of the most dangerous countries in the world.
We explain what caused this crisis and if it could erupt into a civil war.
What caused today’s crisis?
The Venezuelan capital, Caracas, has become one of the most dangerous and violent cities on Earth.
A survey published in 2016 found there were 120 murders per 100,000 residents during 2015. London has a homicide rate of 1.8 murders per 100,000 while New York has 3.4 murders.
The US Bureau of Diplomatic Security has warned the deterioration in the quality of life for Venezuelans over 2017 has resulted in a dire situation in which over 73 citizens die a violent death every day.
Unofficial statistics indicate that most categories of crime increased in 2017 with the majority of Caracas’ crime and violence attributed to mobile street gangs and organised crime groups.
Just 20 years ago, Venezuela — which has the world’s largest crude oil reserves — was one of the richest countries on Earth.
Revolutionary socialist Hugo Chavez swept to power in 1998, promising to share out the nation’s wealth.
Slum dwellers were housed in new tower block apartments, deliberately sited in well-to-do areas, and Chavez gave away £640billion in welfare handouts, increasing the national debt five-fold.
Chavez used the oil revenues of the 2000s to nationalise key industries and to implement social programmes known as the Bolivarian missions.
At the start of the 21 st century Venezuela was the world’s fifth largest exporter of crude oil, with it accounting for 85 per cent of the country’s exports and therefore dominating the economy.
This resulted in temporary improvements to quality of life, literacy rates, poverty rates, and income equality – mainly from 2003 and 2007.
However, this was only temporary and the gains started to reverse in 2012 after government policies failed to address structural inequalities in other areas such as quality of housing, neighbourhoods, education and employment.
The Venezuelan government overspent on social programmes and it led to a rise in inflation.
This coupled with the government’s unfriendliness to privatisation led to a lack of foreign investment.
President Nicolas Maduro took over after Chavez died in 2013, and analysts claim that Venezuela’s economic problems would still have been exacerbated if Chavez was still the leader.
What is the situation with Venezuela’s economy today?
But the collapse of oil prices has now triggered a total economic meltdown.
Due to huge state subsidies, a full tank of petrol is around 5p — 20 times less than a bottle of water — but production is now so inefficient that the country is importing oil.
Hyperinflation has become one of the biggest problems for Venezuelans in their day-to-day lives.
The costs of goods continue to increase as the value of their currency continues to fall.
A worker on the £25-a-month minimum wage must now work for two weeks to afford a bag of rice.
And now, Venezuela is in the grip of a hyperinflation economic catastrophe after 19 years of successive socialist governments failed to control the cost of basic goods, which are now doubling in price on average every 26 days.
Will there be a civil war?
When asked if the crisis in Venezuela could escalate into a civil war, Maduro said on February 4 that “no-one could answer that question with certainty.
“Everything depends on the level of madness and aggressiveness of the northern empire [the US] and its Western allies.
“We ask that nobody intervenes in our internal affairs… and we prepare ourselves to defend our country.”
The US has said that military intervention will remain an “option”.
Guaidó said on the same day: “There is no possibility of a civil war in Venezuela, it is a Maduro invention.”
Timeline of events from when Maduro was elected
- April 2013: Maduro is the chosen successor after Chavez dies and narrowly winds an election
- November 2013: Inflation is at more than 50 per cent and Maduro gets emergency powers, which he uses to limit profit margins
- November 2014: Government cuts public spending as oil prices are at a four-year low
- February 2016: Maduro announces measures to fight the economic crisis, which includes currency devaluation and increased the price of petrol for the first time in 20 years
- April – June 2017: Nationwide protests result in several people dying over demands for early presidential elections
- May 2018: Maduro wins another term
- August 2018: Maduro survives an assassination attempt during a live, televised speech
- August 2018: Maduro slashes five zeros from its old currency and renames it the Sovereign Bolivar to fight hyperinflation
- January 2019: Juan Gerardo Guaidó Márquez swears himself in as acting President of Venezuela due to the current political crisis following the inauguration of Nicolás Maduro as President of Venezuela earlier this month
- January 2019: US President Donald Trump said he recognises Guaidó as the Interim President of Venezuela
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- January 2019: Canada, Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Panama, Paraguay, and Peru recognise Guaidó as the Interim President of Venezuela
- February 2019: Spain, the UK, France, Germany, Austria, Denmark, the Netherlands, Poland, the Czech Republic, Belgium, Estonia and Sweden recognise Guaidó’s legitimacy
- February 2019: The UK, France, Germany, Spain and others call for President Maduro to hold new elections