inflation in VenezuelaVenezuela has been in a decades-long economic crisis. Its economic decline is historically marked by el Viernes Negro or Black Friday. Black Friday took place on February 18, 1983, when the nation’s bolivar began depreciating in value. Inflation in Venezuela has been rising ever since. Recent hyperinflation in Venezuela has caused mass poverty across the nation. The result have been shortages of food and medical supplies and an unemployment rate of 35 percent as of December 2018.

Origins of Depreciation

In order to understand potential ways to alleviate Venezuela’s rising inflation rates, it is essential to understand how the economy reached this point. Back in the 1970s and early 1980s, Venezuela was a flourishing oil tycoon in possession of some of the world’s largest oil deposits. A worldwide shortage of oil raised the prices of barrels and created a golden period of economic growth for oil giants like Venezuela. Once the 1980s rolled in, oil prices stabilized. People started looking for more affordable, alternative energy methods.

This was detrimental to Venezuela’s economy since there was less demand for oil. Heightened production due to the previously increased oil prices left Venezuela with an abundance of oil produced and less demand. Venezuela’s reliance on exporting oil became its undoing. The price of oil continued to drop as the years progressed. Venezuelan oil production continued to exceed the actual demand. Inflation in Venezuela began here as the nation struggled to adapt in the face of failing exports.

Worsening Factors

Several factors contributed to the inflation of the Venezuelan bolivar. One factor was increased spending on social welfare programs and the importation of basic goods during Hugo Chávez’s presidency. While these actions helped to alleviate social unrest, this type of spending couldn’t be sustained as the oil-based economy tanked. In 2008, the global price of oil dropped to around $34 dollars per barrel, a record low that severely cut Venezuela’s core income. In 2014, another record low sealed Venezuela’s economic down spiral as the nation could no longer rely on its chief export for a means of financial stability.

However, this did not deter spending on welfare programs and imports, which led the nation into deficit spending. Deficit spending continues to be a major factor in increasing inflation in Venezuela. The further the nation falls into debt, the more the value of the bolivar depreciates. Currently, the full value of Venezuela’s debt is exceeds “the value of its exports” by 738 percent. Because of its massive debt, the U.S. implimented trade restrictions in early 2019. This has further decreased the sales from exports and the nation’s gross revenue.

Currency printing has been another cause of inflation in Venezuela. In order to pay for the importation of basic goods, more money has and is being printed by banks and the government. The value of the bolivar depreciates the more that is printed. It should be kept in mind, however, that these aren’t the only factors in inflation. The situation is deeply complex, spanning over decades of domestic mismanagement and failing international relations.

Qualifications for Hyperinflation

According to Forbes, a nation’s economy reaches hyperinflation once its monthly inflation rate surpasses 50 percent for a full thirty days. Once that inflation rate drops below 50 percent for another full thirty days, it is no longer in hyperinflation. Venezuela has been in a continued episode of inflation with some peaks of hyperinflation since November 2016.

Because of the longevity of Venezuela’s financial crisis, the nation’s economy is considered to be in hyperinflation. According to the International Monetary Fund, Venezuela’s GDP will drop another 25 percent by the end of 2019. The projected inflation rate by the end of 2019 will surpass 10 million percent.

Alleviating Inflation

Despite the economic down spiral in Venezuela, there is a potential solution that is common across business analysts. Forbes and Bloomberg Business both suggest that Venezuela adopts “dollarization.” This means abandoning the domestic currency in favor of foreign currency. Dollarization allows the economy to stabilize as Venezuela could leave behind the bolivar and adapt to an already stable foreign currency.

The reasons for inflation in Venezuela are numerous. There are some solutions out there, but they have yet to be implemented. In this case, adopting the American dollar may be the best approach to curb the rising inflation in Venezuela and reduce the poverty caused by inflation.

Suzette Shultz
Photo: Flickr

The Fall of Venezuela’s Oil-Based Economy
Currently, Venezuela is in an economic crisis. According to the International Monetary Fund (IMF), Venezuela’s inflation rate will exceed 10 million percent by the end of 2019. This high inflation has destroyed Venezuela’s economy, causing poverty and unemployment rates to rise. In turn, it has also created mass food and medical supply shortages across the nation. Venezuela was not always in a state of crisis; it was once a thriving country backed by a booming oil-based economy. If one understands the fall of Venezuela’s oil-based economy, they will know how Venezuela’s current crisis came to be.

Fruitful Origins

Back in the 1920s, people found some of the world’s largest deposits of oil in Venezuela. Upon this discovery, Venezuela embarked on the path of a petrostate. As a petrostate, Venezuela’s economy relies almost entirely on oil exports. The government overlooked domestic manufacturing and agriculture, choosing to import basic goods instead of producing them within Venezuela. With strong support for an oil-based economy, Venezuela rode on its economic boom until the end of the worldwide energy crisis of the 1970s.

The 1970s energy crisis involved international oil shortages due to interrupted supplies from the Middle East. In place of the Middle East, Venezuela became one of the top oil suppliers worldwide. Oil prices thus skyrocketed due to limited suppliers and oil production in Venezuela increased to meet rising demand. Venezuela added about $10 billion to its economy during the energy crisis, providing enough wealth to cover the importation of basic goods. It was even able to begin more social welfare programs.

The Fall

Once the energy crisis ended in the early 1980s and oil prices stabilized again, Venezuela’s economy saw its first notable decline. Oil production did not decrease in spite of lowered oil prices and demand, resulting in a capital loss for Venezuela’s economy. The production of oil is an expensive endeavor which requires high capital investment in the hopes of that even higher sales can offset the investment. Therefore, while oil production remained high, Venezuela failed to build off of the investment, losing capital immediately.

This loss of capital marked Venezuela’s oil-based economy’s initial fall, as Venezuela risked its well-being on the unstable oil market. Just prior to the drop in oil prices, Venezuela went into debt from purchasing foreign oil refineries. Without investing in domestic agriculture or manufacturing, the Venezuelan government became economically strapped; it could no longer pay for its imports and programs, and especially not its new refineries.

In order to pay for its expenses, Venezuela had to rely on foreign investors and remaining national bank reserves. Inflation soared as the country drilled itself further into debt. It was not until the early 2000s that oil prices began to rise again and Venezuela could once more become a profitable petrostate — in theory. Under the regime of Hugo Chávez, social welfare programs and suspected embezzlement negated the billions of dollars in revenue from peaked oil exports.

By 2014, when oil prices took another harsh drop worldwide, Venezuela did not reserve enough funds from its brief resurgence of prosperity. Ultimately, the country fell back into a spiral of debt and inflation.

Lasting Effects

The fall of Venezuela’s oil-based economy sent shockwaves throughout its population, affecting poverty and unemployment rates and causing mass food and medical shortages. Estimates determined that in April 2019, Venezuela’s poverty rate reached nearly 90 percent nationwide. A notable factor of its widespread poverty, some suggest that Venezuela’s unemployment rate was 44.3 percent at the start of 2019.

Unemployment is rapidly increasing in Venezuela as both domestic and foreign companies lay off workers — with some companies offering buyouts or pension packages, and others just firing workers without warning. As Venezuela falls further into debt and its inflation rises, there is not enough demand within the country for foreign companies to stay there.

As previously mentioned, the earlier Venezuelan government chose to rely on imports rather than domestic production for its basic goods. Now, in 2019, the country suffers from its past mistakes. Unable to afford its imports, food and medical supply shortages are rampant across Venezuela. According to recent United Nations reports, over a 10th of the nation’s population is suffering from malnourishment. In addition, malaria — which the country virtually eliminated several decades prior — is reappearing as there are more than 400,000 cases nationwide.

A Way Out

While the fall of Venezuela’s oil-based economy may be detrimental to the nation’s overall stability, there is a way out of ruin: the International Monetary Fund, an international agency that exists to financially aid countries in crisis. In the fight against global poverty, the IMF is a vital tool that can prevent countries from reaching an irreparable state.

If Venezuela defaults on its debt and seeks funding from the IMF, Venezuela would be able to invest in domestic agriculture and other infrastructure. Therefore, if the oil industry continues to decline, there will be a fallback for supplies and potential exports. While this is not a panacea to the fall of Venezuela’s oil-based economy, it is a way for the nation to prepare for any future declines in oil prices and begin to work toward prosperity.

– Suzette Shultz
Photo: Flickr

Fuel Shortage in Venezuela
In 1960, the Organization of Petroleum Exporting Countries (OPEC) established to coordinate and unify policies around the price of oil. This intergovernmental organization consists of 15 nations that produce 44 percent of the world’s oil and own 81.5 percent of the world’s oil reserves. Given the importance of oil in today’s economy, it is reasonable to assume that OPEC members are well-off, especially those with vast oil reserves. However, the fuel shortage in Venezuela proves otherwise.

Fuel Shortages Starve the Country

Venezuela, one of the five OPEC founders, boasts the world’s largest oil reserve. Although this South American country sits on a vast reservoir of mineable liquid gold, there is a fuel shortage in Venezuela that starves it. Due to years of mismanagement and corruption, the oil-rich nation has dried up its gasoline pumps, leaving lines trailing from gas stations that last hours. People can sometimes wait for days to fill their tanks. In the southern and western states of Tachira and Bolivar and the central states of Carabobo and Aragua, people can wait in line for five hours or more. Venezuela has limited power so it rations it; periodic power outages means that people cannot pump gas. However, there are no gas shortages in the country’s capital, Caracas; oil tankers divert into the capital to supply its six million citizens, but also to prevent political unrest around the Parliament.

These fuel shortages and gas station lines are impeding on already troubled Venezuelan lives. The hyperinflation and lack of job opportunities in the country hinder a good quality of life and gas shortages push this even further. Citizens cannot get to their jobs when their cars are empty on fuel or when they are stuck in line to fill up.

However, the fuel shortages in Venezuela are troubling to not only the day-to-day lives of citizens but also the entire agriculture industry that feeds the population. Fuel shortages compound the effect of food insecurity. When there is a shortage of fuel, food cannot make it from farm to market or from city to city. There is no rail system to move food either. Farmers leave harvested produce to rot, simply because the truck that transported vegetables to the market never arrived. On May 20, 2019, the National Federation of Cattle Ranchers in Venezuela issued a public plea to the government citing its difficulty moving cattle across the country.

Delayed shipping dates are not the only way fuel shortage in Venezuela impacts agriculture. Farmers might have nothing to sell because pesticide shipments might not arrive to prevent insects ruining their harvest. Without the shipment of crucial parts, farmers cannot operate basic equipment and without a reliable gas pump, workers cannot take the bus into work. Fuel shortage in Venezuela impacts not only the food but the equipment and the workers necessary to cultivate crops.

Plummeting Oil Production in the World’s Largest Oil Reserve

In the past, Venezuela has provided generous gas subsidies to make fuel almost free. However, the issue of fuel shortage began in 1989, when then-President Perez announced an end to the gas subsidy. The announcement resulted in large riots and since then, the suggestion of increased prices of oil is taboo. Thirty years later and after six years of economic crisis and recession, oil is still cheap, but production has dropped significantly. At the beginning of 2019, PDVSA, the state-owned oil and gas company, produced 1.2 million barrels of oil. On April 2019, this figure dropped down to 830,000. This decrease in production is due to obsolete machinery and under-resourced facilities. Additionally, as of now, only two refineries are in operation.

In addition to the mismanagement and corruption that has caused these plummeting oil production rates and shortages, the Maduro government also blames the corruption of former management of resources and U.S. sanctions. These sanctions prevented the export of specific materials that refine crude oils into usable fuel.

Solutions

Corruption, mismanagement and sanction stand-offs are difficult to address. However, there are many NGOs that operate on a community level and provide for those immediately in need. The Venezuelan Engagement Foundation Group (VEFG) is one of these NGOs with programs that address the effects of the fuel shortage and resulting food insecurity. One of its top missions is to provide nutritional meals to children in need through food programs. This year, its food programs have targeted communities in need, mainly children who are the most impacted demographic regarding food shortages. VEFG’s #FeedAKid campaign guarantees that $1 can give a child one meal a day through community kitchens and school canteens. Currently, VEFG feeds 3,000 children, teenagers and elders in 32 different centers worldwide or 90,000 meals a month.

Venezuela’s position is full of contradictions. As an oil-rich OPEC country with fuel shortages and once the richest country in South America, it is now grappling with hyperinflation, failing job markets and food insecurity. The corruption and mismanagement in government have failed to convert the potential of oil into social welfare. Venezuela has limitless potential in terms of its crude oil reserves ready for refinement. The efforts of NGOs on the local level and change on the national level will refine the crudity of poverty into prosperity.

– Andrew Yang
Photo: Flickr

Conflict in Venezuela
In January 2019, Nicolás Maduro won the Venezuelan presidential election, bringing him into his second term as president. Citizens and the international community met the election results with protests and backlash, which has only added to the conflict in Venezuela. The National Assembly of Venezuela went so far as to refuse to acknowledge President Maduro as such. Juan Guaidó, an opposition leader and president of the National Assembly, declared himself interim president almost immediately after the announcement of the election results, a declaration that U.S. President Donald Trump and leaders from more than 50 nations support. Russia and China, however, have remained in support of President Maduro.

During his first term as president and beginning in 2013, Maduro has allowed the downfall of the Venezuelan economy. His government, as well as his predecessor, Hugo Chávez’s government, face much of the anger regarding the current state of Venezuela. Continue reading to learn how the conflict in Venezuela is affecting the poor in particular.

How Conflict in Venezuela is Affecting the Poor

Maduro’s aim was to continue implementing Chávez’s policies with the goal of aiding the poor. However, with the price and foreign currency controls established, local businesses could not profit and many Venezuelans had to resort to the black market.

Hyperinflation has left prices doubling every two to three weeks on average as of late 2018. Venezuelan citizens from all socio-economic backgroundsbut particularly those from lower-income householdsare now finding it difficult to buy simple necessities like food and toiletries. In 2018, more than three million citizens fled Venezuela as a result of its economic status to go to fellow South American countries such as Colombia, Brazil, Panama, Ecuador, Peru, Chile and Argentina. However, nearly half a million Venezuelans combined also fled to the United States and Spain.

Venezuela is currently facing a humanitarian crisis that Maduro refuses to recognize. The opposition that is attempting to force Maduro out of power is simultaneously advocating for international aid. As a result, local charities attempting to provide for the poor are coming under fire from Maduro’s administration, as his government believes anything the opposition forces support is inherently anti-government.

In the northwestern city of Maracaibo, the Catholic Church runs a soup kitchen for impoverished citizens in need of food. It feeds up to 300 people per day, and while it used to provide full meals for the people, it must ration more strictly due to the economic turmoil. Today, the meals look more like a few scoops of rice with eggs and vegetables, and a bottle of milk. While the Church’s service is still incredibly beneficial, it is a stark contrast from the fuller meals it was able to provide just a few years prior.

The political and economic conflict in Venezuela is affecting the poor citizens of the country in the sense Maduro’s administration is ostracizing local soup kitchens and charities. A broader problem facing the poor is that because Maduro refuses to address the humanitarian crisis, international organizations like the International Committee of the Red Cross (ICRC), UNICEF and the World Food Programme (WFP) are unable to intervene and provide aid.

Project HOPE

There are non-governmental organizations (NGOs) that are making an effort to help Venezuelans suffering as a result of this crisis. One of the easiest ways they can be of service is by providing aid and relief to citizens who have fled to other countries. Project HOPE is an organization that currently has workers on the ground in Colombia and Ecuador to offer food, medical care and other aid to those escaping the conflict in Venezuela. Project HOPE is also supporting the health care system in Colombia in order to accommodate the displaced Venezuelans there.

The current conflict in Venezuela is affecting the poor, but it is also affecting the entire structure of the nation. It is difficult to know what the outcome of this conflict will look like for Venezuelans and for the country as a whole. What is important now is to continue educating people about the ongoing crisis so that they can stay informed. Additionally, donating to Project HOPE and other NGOs working to provide aid to Venezuelans in neighboring countries would be of great help. With that, many Venezuelan citizens will know that people support them and are fighting to see progress.

– Emi Cormier
Photo: Flickr

Mass Migration Out of Venezuela
Mass migration out of Venezuela has several determinants including high inflation, crime rates, food and health care scarcity and the violation of human rights by government forces. These crises are deteriorating living conditions within this Latin American nation, creating a strong push factor for its citizens. The mass migration out of Venezuela is a phenomenon of desperation and necessity, resulting in millions of Venezuelans fleeing from the struggling nation.

Where are Venezuelans Fleeing to?

According to the United Nations Refugee Agency, as of May 2019, over 3.7 million Venezuelans have fled the country. This is around a 10th of the nation’s population. Of these migrants, around 464,000 are asylum-seekers, with the rest acquiring other forms of residency. The majority of these migrants stay in Latin America, while some flee as far as Southern Europe.

In Latin America alone, the highest concentrations of Venezuelan refugees are located as follows:

  1. Columbia: 1.1 million
  2. Peru: 506,000
  3. Chile: 288,000
  4. Ecuador: 221,000
  5. Argentina: 130,000
  6. Brazil: 96,000

Life of Venezuelan Refugees and Migrants

The main goal of these migrants is to secure human rights in other countries. This is due to Venezuela no longer securing these rights within its borders. The United Nations recognized this motivation behind the mass exodus back in an August 2018 report and has since then been pressing Venezuela to address these concerns. As for other countries recognizing this humanitarian crisis, neighboring nations such as Columbia have built temporary refugee camps to house migrant Venezuelans.

Unfortunately, not all migrants receive legal residency in their countries of refuge. While some migrants obtain asylum or temporary legal residencies, some seeking refuge resort to illegal means, leaving them at risk of deportation. Whether illegal or legal, Venezuela migrants all may face potential hardships.

Across the board, people uproot from their homes in Venezuela, leaving behind everything they once had. Venezuelan refugees face unemployment and homelessness, as well as little to no access to basic necessities for survival. Venezuelan refugees are also particularly vulnerable to robbery and human trafficking. This risk amplifies especially as an illegal migrant, as those migrants may resort to contacting gangs in order to enter a region.

Intervention

To combat the potential hardships Venezuelan refugees may face, many organizations are stepping forward to alleviate struggles for migrants. Taking on health services, organizations like Project Hope are continuously reaching out to hospitals packed with refugees, such as those in Cúcuta, Colombia.

Project Hope trains medical teams, provides on-site doctors, supplies essential medicines and treatment care and provides numerous other forms of aid to assist refugee-filled health facilities across Latin America. The International Refugee Committee and UNICEF are other notable organizations providing medical assistance.

Organizations like Global Affairs Canada and the Pan American Development Foundation are helping with housing Venezuelan refugees and building shelters. For instance, shelters exist in Boa Vista, Brazil, and in other areas of great need. Given the sheer magnitude of Venezuelan migrants, proper housing proves to be one of the biggest challenges countries with refugee influx face.

While there are many organizations providing aid to Venezuelan migrants and refugees, one thing is clear: the best way to help these Venezuelan migrants is to help Venezuela as a country. So long as Venezuela is in an economic, political and humanitarian crisis, citizens will continue to flee it. The mass migration out of Venezuela is not an isolated event; it is a symptom of a much bigger problem plaguing Venezuela.

– Suzette Shultz
Photo: Flickr

10 Facts About Hunger in VenezuelaFood shortages across Venezuela started to rise in 2013, around the time of President Hugo Chávez’s death. Less than a year later, the nation’s oil-dependent economy began to tank and inflation began to soar. Venezuela could no longer afford the cost of its imported basic goods, resulting in nationwide shortages in food and medicine. While the nation’s instability worsens, people are going hungry in Venezuela. Here are the top seven facts about hunger in Venezuela.

7 Facts About Hunger in Venezuela

  1. In 2017, 89.4 percent of Venezuelan households could not afford basic food supplies due to inflation and six out of 10 Venezuelans reported going to bed hungry. In February 2019, peak inflation in food prices hit a staggering 371,545.6 percent and high rates are continuing throughout 2019.
  2. Due to hunger in Venezuela, malnourishment is quite common. The United Nations reported that nearly 3.7 million Venezuelans suffered from malnourishment in 2018.
  3. Mass weight loss is also common across Venezuela as 64.3 percent of Venezuelans lost weight due to food shortages in 2017. Venezuelans who lost weight dropped an average of 11.4 kg each since the shortages began. 
  4. Available food supplies all too often end up on the black market and are sold by bachaqueros. Bachaqueros buy subsidized goods at government-set prices, then sell those goods at double, even triple, the original price, taking advantage of struggling communities. This illegal practice is exacerbated by Venezuela’s compounded crises.
  5. Without easy access to affordable food supplies, some Venezuelans resort to using alternative resources. For example, the yuca root can replace potatoes, which is a similar, yet far cheaper vegetable. In more desperate cases, scavenging for scraps has also become popular.
  6. Although President Nicolás Maduro has rejected many types of humanitarian aid, including extensive efforts to send food supplies, the government has accepted aid from nonpartisan groups. In 2018 alone, Cuatro Por Venezuela, one of the largest relief suppliers, sent 41,804 pounds of food to Venezuela, amounting to 120,000 standard meals for people in need. These supplies are distributed directly to schools, orphanages, nursing homes and homeless shelters all over Venezuela.
  7. In addition to nonpartisan NGOs, international government groups, such as the European Commission (EC), allocated another €50 million to the crisis in Venezuela, along with additional food supplies and nutritional services in March 2019. 

As food shortages continue and people remain hungry, these seven facts about hunger in Venezuela show that the country is in a clear humanitarian crisis. While there are aid efforts out there, supplies must be sent in as nonpartisan support. So long as aid efforts adhere to this restriction, there is hope for hunger relief in Venezuela.

—Suzette Shultz
Photo: Wikimedia Commons

Venezuelan refugees in PeruFor the last decade, Venezuela has seen a severe and damaging economic recession. As of 2018, inflation hit 130,060 percent. There are severe shortages of food and medicine and an increase in crime that has made life in Venezuela a battle for survival. Considering these factors, including President Nicolás Maduro not leaving power anytime soon, many Venezuelans have decided to pack their bags and leave their beloved homeland. In the past four years, approximately 10 percent of the population fled the country. Thankfully, shelters have opened to provide aid for Venezuelan refugees in Peru.

At first, many governments were willing to cooperate, but as more Venezuelans left, many countries established specific immigration requirements, such as having a valid passport. Even though this sounded fair for many, it closed the door to many of these refugees, as the cost of processing one visa is around 7,200 bolívars ($115); that is four times the local minimum wage.

Peru is one of the few nations that kept an open border policy for many years. However, that changed when President Martin Viscarra established that as of June 15, Venezuelans would need a passport and visa to enter Peru. That day, 5,849 people arrived at the border Peruvian border, and while some arrived just in time, others were left behind. These grim situations may make it seem that all hope is lost, but there are still many Peruvians who receive these migrants with open arms. These three shelters have given shelter and hope to Venezuelan refugees in Peru.

Casa Don Bosco

This Lima home directed by Salesian Missionaries takes part in integration projects that help newly arrived Venezuelans adapt to an entirely different culture. While it used to be an old vocational training facility, it now accommodates the needs of the refugees, by providing necessary guidance on finding housing and educating them on their fundamental workers’ rights. Casa Don Bosco also has ties with The Food Bank of Peru, allowing them to feed all the migrants that knock on their doors.

A Power Couple and Their Shelter

In June 2018, Raquel Vásquez and Ernesto Reyes, a married couple, bought an old house in the middle of the Comas district. Their mission was to provide refuge to any Venezuelan refugees that arrived in Lima. Once installed, Venezuelans are allowed to stay for up to one month for free, giving them time to find a job and better housing. Vásquez and Reyes said that opening the shelter was a necessity, especially after seeing all the refugees sleeping on the streets, penniless after spending all their money just to get to Lima. The shelter operates thanks to the couple’s own money and local donations.

Rene Cobeña’s Shelter and Business

The owner of this shelter is textile businessman Rene Cobeña, who bought an old hotel and transformed it into a safe haven. The house not only offers Venezuelans breakfast, lunch and dinner but also operates as a small business, employing the same refugees. Using his money and some donations, Cobeña buys ingredients to make arepas and donuts that the refugees sell. He has also sold some of his textile machines to fund better ingredients and transportation. Thanks to these efforts, the refugees were able to start building their savings, helping themselves and their families, and eventually leave the shelter to begin anew.

These shelters are not on alone in their efforts; despite the lack of legal assistance, the owners and many other Peruvians are giving what they can to help. Venezuelans are escaping one of the most brutal dictatorships of the last century, and all they need is a helping hand through this difficult time as Venezuelan refugees in Peru.

– Adriana Ruiz
Photo: Wikimedia

Poverty in VenezuelaHugo Chavez, the president of Venezuela, died in 2013 at the age of 58 after a battle with cancer. Chavez became president in 1998 and during that time he established parties and brought forth a constitution with socialist economic and social policies with the help of high oil prices. Chavez’s predecessor, Carlos Andres Perez, who became president in 1989 during the economic depression, created an austerity program which caused riots, martial law and a strike which resulted in hundreds of deaths in the streets. Considering this, there was palpable progress from Perez to Chavez. However, with the political unrest from the failure to create reform during the recent economic crisis, Nicholas Maduro’s presidency ended in 2019. Poverty in Venezuela, influenced by the recent economic downturn, has had detrimental effects on the Venezuelan people in numerous areas including health care.

The Problem

There are very grave consequences to this politically troubled lineage of leadership in Venezuela. In the wake of the economic crisis and lack of reform, and despite Venezuela’s possession of some of the largest oil and raw ore deposits in the world, the Economist reports that 82 percent of Venezuelan households live in poverty.

Access to proper health care is of the utmost importance to all populations, especially those in economic trouble. If there is a shortage of gloves and soap, cancer medicine and access to diagnostic services that detect tumors may be limited as well. The survival rate for cancer is best when medical professionals perform an early, precise diagnosis. Yet, Venezuela’s public hospital system cannot provide this.

JCWO and FJC

However, there are organizations like the Jacinto Convit World Organization (JCWO) and Fundacion Jacinto Convit (FJC) who battle these problems. These two sister nonprofit organizations are based in Venezuela and are developing cutting edge cancer treatments while providing diagnostic services free of charge to patients in underserved public hospitals.

In an interview with Ana Federica Convit, the president of JCWO, she described the need for support in developing countries where patients have limited access to health services as a result of increasing poverty rates, including, “soaring hyperinflation … one of the lowest minimum wages in the world (around 5 USD a month), [and] shortages of food and medical supplies.”

Ana Federica Convit notes that “JCWO currently develops two programs, Molecular Diagnostics and Cancer Immunotherapy, which contribute to improving the lives of underprivileged and underserved populations that lack access to adequate health services and innovative or even conventional treatments.” These programs have already reached, “seven of the most important hospitals in the various regions of the country,” and outreach continues to spread all across Venezuela. JCWO, “is quickly growing to cover all public oncological services throughout Venezuela in order to impact mortality and morbidity rates, in one of the most economically and socially devastated countries in the world today.”

The Two Programs

FJC runs the Molecular Diagnostics program while JCWO supports it. This program “provides free access to early, precise and personalized diagnosis in various types of cancer and infectious diseases such as HIV.” The program performs highly specialized tests like genetic alterations nowhere else provides in Latin America. To date, the program has treated close to 300 patients in extreme poverty, many of which are underprivileged children.

The Cancer Immunotherapy program, “works on advancing the development of a personalized breast cancer immunotherapy, designed by Dr. Convit during his last years of life.” This treatment aims to use the patient’s immune system to attack tumors and prevent the disease from recurring. This treatment is currently beginning clinical trials in Argentina. Ana Federica Convit notes that “the importance about this vaccine is that it is a simple, safe, low cost and potentially effective therapy that can be accessible for underprivileged patients who many times cannot access other treatments due to their high costs.”

Poverty in Venezuela is severe. The economic impacts stemming from a troubling presidential lineage has deeply affected the medical system. The state of public hospitals has made certain that diseases, like cancer, are extremely hard to treat simply because the drugs are expensive. With organizations like Jacinto Convit World Organization and its sister organization, Fundacion Jacinto Convit, impoverished communities can receive the care they require. These sister organizations operate on both a local and global scale with an outreach that spans the local communities and to the global community at large. These organizations are on the cutting edge of cancer research, while still directing their tireless efforts towards those who need it most, all free of cost. These organizations can help ease the burden of poverty in Venezuela.

– Andrew Yang
Photo: Flickr

Hyperinflation

When it comes to global poverty, an important factor of a country’s economy is its inflation rate. Inflation occurs when the value of a nation’s currency decreases, but the prices for goods increase. Inflation affects many facets of everyday life, such as nationwide poverty rates, food and medical supplies.

Hyperinflation occurs when inflation rates rise quickly and uncontrollably. Hyperinflation is reached when an economy’s inflation rate is at least fifty percent for a thirty day period. However, high inflation rates consistent over a prolonged period of time also qualify as hyperinflation.  Here are three countries in hyperinflation today.

Venezuela

In the 1970s world energy crisis, Venezuela was a highly profitable oil producer. After oil prices dropped once the energy crisis ended in the 1980s, Venezuela’s chief export greatly declined in revenue and its economy began to suffer. Despite the decline in exports, Venezuela still needed to spend large sums of funding on the importation of basic goods for its people. This led to inflation, as the country dug itself into deficit spending. To pay for imported goods, Venezuelan banks then printed out paper notes not backed by actual wealth.

Now, inflation in Venezuela has reached monumental levels of devastation. Venezuela has been in hyperinflation since November 2016, when the inflation rate exceeded 50 percent. The International Monetary Fund estimates that inflation in Venezuela will exceed ten million percent by the end of 2019.

Because of this economic crisis, poverty is widespread. In 2017, the poverty rate across Venezuelan households reached 87 percent. On top of widespread poverty, food and medical supply shortages are rampant across Venezuela. The health of its people has deteriorated as weight loss and the spread of disease inflict the nation.

Currently, the Venezuelan government rejects the International Monetary Fund’s option to default on its debt. Venezuelan U.N. representatives have commented that in order for the nation to progress, it needs internal structural changes, not foreign aid.

South Sudan

South Sudan’s economy is also almost entirely oil-based. Of the countries in hyperinflation, South Sudan is the newest, gaining independence from British rule in 2011. However, South Sudan was quickly caught in a civil war from 2013 to 2018, soon after its founding. Damage to oil fields and other resources due to warfare severely affected the revenue of South Sudan’s exports. Inflation began as the struggle for resources and funding inflicted this budding nation.

South Sudan’s current economic crisis has caused mass poverty and food insecurity for its civilians. According to recent reports from the U.N., 43 percent of South Sudanese households are food insecure. At its peak, inflated food prices reached about 513 percent in December 2016. By the end of December 2018, the inflation on food prices dropped to 51 percent but is still hyperinflammatory by definition.

Unfortunately, South Sudan is currently not focusing on any poverty-reduction programs. According to the World Bank Organization, South Sudan’s overall inflation rate was an estimated 130.9 percent by the end of 2018; by the end of 2019, it is expected to drop to 49.3 percent, just under the hyperinflation threshold. However, given the financial instability of the nation, South Sudan will remain under close observation of the International Monetary Fund and similar entities for the foreseeable future.

Zimbabwe

Zimbabwe’s economy thrived in the 1980s and early 1990s, after declaring its independence from British control and creating its own domestic dollar currency in celebration. In the 1990s, however, Zimbabwe’s agricultural-based economy took a major hit after a series of crop failures. Compounded by the high costs of imports and funding for the war, Zimbabwe’s economy began to falter. In a panic to pay for goods, Zimbabwean banks rushed to print excess bills, leading the nation into hyperinflation.

Zimbabwe’s economy reached hyperinflation in March 2007, just passing the 50 percent threshold. For the next year, the nation’s inflation was a tumultuous series of highs and lows, eventually reaching a staggering 79.6 billion percent in November 2008. Eventually, Zimbabwe was forced to abandon its domestic currency, as its own population boycotted using the drastically inflated Zimbabwean dollar.

Despite the nation’s inflation rate lowering back down to 59.4 percent as of February 2019, Zimbabwe is still struggling to limit its cost of imports and boost its revenue from exports.

Potential Solutions

While there are numerous potential ways to address hyperinflation, a common solution for this phenomenon is dollarization — the abandonment of a failing domestic currency in favor of a stable foreign currency. A notable success story of dollarization is Montenegro, where the considerably weak Yugoslavic dinar was replaced with the euro, a more stable currency used widespread across the European Union. Before total dollarization, the inflation in Montenegro peaked at 26.5 percent in 2001. After adopting the euro, the country’s inflation is under one percent, as of 2019.

Of the three countries in hyperinflation today, Zimbabwe did utilize this method of dollarization; however, as of 2019, it abandoned dollarization, triggering the start of nationwide economic problems yet again. Overall, for these three countries in hyperinflation today, maintaining dollarization may be their best chance in regaining economic stability.

– Suzette Shultz
Photo: Wikimedia

Education in VenezuelaSince 2015, approximately 4 million people have fled Venezuela. For those who have not left the country, food, water and jobs are scarce in the wake of a collapsed economy and hyperinflation. Perhaps the most victimized of the population are children who are unable to find basic access to education in Venezuela.

Why Are Children Not Attending School?

As Venezuelans struggle to afford basic necessities for survival, many children in Venezuela have stopped attending school. For families facing severe hunger, the extra cost of school supplies and uniforms is a price they often cannot afford. Students are unable to perform at school without proper nutrition or clothing. Many parents decide that their children should stay home where they have a chance at a meal.

More than 3 million of the country’s 8 million students have dropped out of school. Some of these students have emigrated with their parents, while others have quit to work and adopt caretaker roles within the family. As Venezuelans face widespread malnutrition, the educational needs of the children in Venezuela remain secondary. It is estimated that 1.1 million children will remain in need of basic education in 2019.

Although education was a hallmark of President Maduro’s campaign, the government can no longer afford to supply schools with proper maintenance and lunches. Public education previously provided a food bonus with a healthy lunch for students. That food program no longer functions, and students cannot rely on meals. In addition, with prices doubling every other month, the transportation system has failed, and both schools and parents struggle to afford bus fares for students.

School Closures without Teachers

Because of low enrollment, hundreds of schools have closed, and thousands of teachers have left their jobs. According to the Venezuelan Teacher’s Association, 176,000 of the country’s 860,000 registered teachers have quit. With wages amounting to about $8 a month, instructors of both private and public schools can no longer afford to work.

Many struggling schools only operate three days a week. Additionally, students from various grade levels are often combined into one class. These schools are desperate to keep the children in Venezuela from dropping out and missing years of formative education under harsh circumstances. Due to the teacher shortage affecting Venezuelan schools, parents are taking on teaching roles, despite a lack of experience or education. Parents believe that any schooling is better than none. As Maria Carmona, a mother-turned-teacher says, “Our children must learn, so I became their teacher.”

Efforts to Help Children Receive An Education in Venezuela

Nonprofit organizations, such as Cuatro Por Venezuela Foundation and Pasión Petare, offer places of refuge and free meals for students. Cuatro Por Venezuela Foundation has provided school supplies for more than 350 families and sent 58,000 pounds of food. Pasión Petare uses soccer to motivate children to stay in school and provides a daily meal for 2,000 students.

Catholic relief organizations like Fe y Alegria and Caritas also raise money to provide food and school supplies. Fe y Alegria provides free education to 170 schools across the country and has implemented a food program for school children. The organization also began a campaign called “A Notebook for Fe Y Alegria,” which raises funds to provide school supplies that most families can no longer afford.

Because President Maduro recently conceded to requests for foreign aid, there are more opportunities for organizations such as the U.N. and Red Cross to offer assistance for Venezuelan schools. UNICEF has partnered with Fe y Alegria and reached more than 100,000 people through radio communication with information on how to help children continue their education. UNICEF and its partner organizations have also provided educational kits for 150,000 children and supply food and water for children in schools. This motivates children and parents to send their children to school.

The Venezuelan government continues to deny problems with their country’s education system. If not for the herculean efforts of international relief organizations, private charities and hands-on assistance from parents and local volunteers, hope would not remain for school children in Venezuela. Children face a bleak future and are vulnerable to exploitation without education. With less than 2 percent of all humanitarian aid allotted to education, it is vital to continue calling for assistance amid the rising crisis. As Susana Raffalli, an advisor to Caritas and renowned nutrition expert, says, “We need our children back in school, because that’s one of the few care and nutrition spaces left.”

– Christina Laucello
Photo: Flickr