Focus Area – South America; Focus Country – Venezuela
Venezuela’s multifold crisis has shocked the international community and as it grapples with several issues such as hyperinflation, food shortages, and increased crime and poverty, there is a need to understand the reasons behind one of the worst economic crises that the world has come to know. Venezuela was an extremely prosperous country which earned massive economic growth from oil exports, especially under former President Hugo Chavez. However, when the oil prices came crashing down, the huge subsidies, in the form of various social programmes such as food security, became unsustainable.
The plummeting oil prices also shrank the spending capacity of the government. As it was left with less foreign currency, the acute problem relating to shortage of food and medicinal supplies raised its ugly head. Rampant inflation affected the people of Venezuela and they took to the streets to express their dissatisfaction with the government led by Nicolás Maduro. About 100 deaths have already taken place in association with these protests. Many people are fleeing the country in search of survival and better economic opportunities. The government has come down heavily on critics and independent media with the prosecution of several political opponents and crackdown on protest activities (by security forces). The international community should try to come up with concrete solutions to prevent further escalation of the multi-faceted crisis in Venezuela.
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