On October 18, 2023, three newly introduced U.S. licenses marked possible change for Venezuela. These have the potential to improve a fallen economy and reduce poverty rates in the nation. December 4, 2023, marked a further promise to restore Venezuelan democracy. Taken together, the South American nation enters 2024 with a majority supporting a governmental change — one that has the potential to reduce poverty in Venezuela.

Venezuela’s Economy and Politics

Ongoing economic collapse since the mid-2010s resulted in Venezuela losing 80% of its GDP, and the Venezuelan bolivar is a currency that is now worthless. The current crisis in Venezuela can be reduced to two causes: the authoritarian Maduro government and the consequent U.S. sanctions imposed with the hope of restoring democracy in the country.

Such sanctions limit American trading with Venezuela, particularly in natural resources, of which petroleum, natural gas and gold are leading components. The properties of the natural site once qualified Venezuela as the richest nation in South America. Now, more than 50% of households live in extreme poverty and humanitarian awareness is shifting toward reducing poverty in Venezuela.

Migration and Poverty Venezuela 

An estimated 5 million people are in need of humanitarian assistance in the South American nation. In addition, 11 million are suffering from malnourishment, 4 million do not have access to regular meals, 4 million lack access to clean drinking water and close to 1.5 million do not have basic sanitation. 

Living conditions in Venezuela depend upon the investments in natural resources. As they reduce, so, too, are economic opportunities. Consequently, the nation continues to undergo the largest refugee crisis in South American history, as nearly 8 million Venezuelans flee their home nation.

The U.S. recently recognized the association between Venezuela’s humanitarian and migration crisis, and the nation’s government and economy. Spotting this was the first step toward reducing poverty in Venezuela. 

New US Policy to Combat Poverty in Venezuela

Since 2017, the U.S. has offered $2.5 billion in humanitarian assistance to Venezuela, including $407 million pledged in 2021 to provide relief to the regional crisis and $171 million provided to the same cause in March 2023. Extending out of this are three licenses that the U.S. Treasury passed on October 18, 2023.

The first license ensures a six-month relief of restrictions placed on Venezuela’s oil and gas sector. The second lifts similar restrictions on the nation’s gold sector. Additionally, the third opens up secondary market investments in Venezuela’s leading petroleum company, Petróleos de Venezuela (PdVSA).

Many believe the suspension signifies a step toward restoring democracy in Venezuela, though one must consider the relief a humanitarian act as much as a political one — reviving the economy and thereby providing jobs serves as a hopeful attempt by the U.S. to reduce poverty in Venezuela.

December Agreement: Political Change

A December agreement informed the licenses, as a further attempt to restore democracy in Venezuela. Maria Corina Machado, a political opponent of Maduro who was previously barred from the 2024 election, won the Venezuelan primaries held on October 20, 2023, two days after the U.S. Treasury announcement.

On December 1, 2023, the Venezuelan government and opposition party agreed to an appeal process allowing banned candidates to run, which supports the hope that Machado, with U.S. backing, will be able to take office without further roadblocks.

A Pivotal 2024

The new U.S. licenses carry the potential to directly reduce poverty through the reopening of sectors, improving rates of employment and foreign investment and providing Venezuelans with better wages. As the licenses were passed alongside political support of Machado, the democratic resolutions have the potential to reduce poverty in Venezuela by introducing the free market, which Machado supports. It seems 2024 will be a pivotal year in Venezuelan history. Additionally, with the $54 million requested by the Biden administration in the new year’s budget, America’s continued efforts to reduce poverty in Venezuela may soon yield fruit.

– Joseph Wray
Photo: Flickr