Question

history of Venezuela financial crisis

Answer 1

A socio-economic and political crisis that began in Venezuela during the presidency of Hugo Chávez has continued into the presidency of Nicolás Maduro. It is marked by hyperinflation, escalating starvation, disease, crime and mortality rates, resulting in massive emigration from the country.

It wasn’t that long ago that Venezuela, which possesses the world’s largest crude oil reserves, was a relatively stable democracy with one of Latin America’s fastest-rising economies. It was a nation so awash in petroleum revenues that the socialist government of the late former President Hugo Chavez spent huge amounts on social programs and, at one point, even provided free heating oil for impoverished Americans.

But starting in 2014, the South American nation began suffering a startling collapse. With Venezuela’s gross domestic product plummeting even more than the United States during the Great Depression, many of its nearly 32 million inhabitants became unable to afford food, and resource-starved hospitals did not have enough soap and antibiotics.

Meanwhile, Venezuela’s political system spiraled into turmoil. President Nicolás Maduro, whose 2018 reelection was tainted by accusations of irregularities and voter intimidation, faced massive street protests and survived a spring 2019 military uprising instigated by opposition politician Juan Guaido, leader of the elected National Assembly whose legislative powers were taken away by Maduro’s regime in 2017.

Venezuela has long been dependent on oil revenues, and the Bolivarian revolution of Hugo Chavez did not fundamentally alter that situation,” explains Jo-Marie Burt, an associate professor of political science and Latin American Studies at the Schar School of Policy and Government at George Mason University. “The decline of oil prices, the massive social spending of the Chavez and Maduro governments, U.S. sanctions, and a combination of economic mismanagement and corruption at the top have contributed to the economic collapse.”