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Everything to Know About Poverty in Venezuela

Poverty in Venezuela
A 2021 study found that three in four Venezuelans are living in extreme poverty. With the rise in inflation along with the political climate of the country, many Venezuelans had to flee the country. Inadequate living conditions and the authoritarian style of government have exacerbated poverty in Venezuela.

Extreme Poverty

Food insecurity significantly increased in Venezuela following the COVID-19 virus. In 2021, 88.2% of Venezuelan homes were worried about not having enough food to eat. With prices rising as the country tries to recover from the economic downfall due to the pandemic, citizens are unable to afford basic necessities. Inflation, along with the absence of available jobs, has made it nearly impossible for individuals to overcome the rising poverty rates.

Political Climate

Venezuela is currently under the rule of Nicolas Maduro, who many people view as a dictator. Maduro leads a corrupt government that has led to a disruption 0f peace. The Venezuelan president does not have public approval and neighboring countries, including the U.S. do not recognize him as a president. Despite this, a military unit that uses force to maintain control supports and backs Maduro. Through mass incarceration and corruption, Maduro has instilled fear in Venezuelans that has enabled him to continue leading the country. During 10-year Maduro’s presidency, the country has fallen into its worst economic decline. To improve the economic crisis, Maduro has set price controls that have led to a decline in available goods, further increasing poverty in Venezuela.

The Good News

A foundation that is contributing greatly to improving the lives of Venezuelans is Cuatro Por Venezuela. The name translates to “four for Venezuela,” as four women, Gloria Mattiuzzi, Gabriela Rondón, Maria Elena Teixeira and Carolina Febres, founded the organization. Cuatro Por Venezuela originated in October 2018 as these women wanted to positively impact poverty in the nation. With the goal of improving healthcare and nutrition, Cuatro Por Venezuela’s nutrition program is a great relief to struggling families. The program fills food pantries with goods as well as partners with schools and orphanages to ensure children are not hungry. Cuatro Por Venezuela also aids families who have lost their jobs and are struggling financially. By establishing micro businesses, Cuatro Por Venezuela is enabling individuals to establish a form of income. From 2017 to 2022, Cuatro Por Venezuela has been able to provide 116 tons of humanitarian aid to Venezuela.

Organizations such as Cuatro Por Venezuela have contributed to the progress in Venezuela’s poverty. Since 2021, the number of individuals living in poverty has reduced by 14.7%. The economic recovery has allowed more families to be able to afford food and housing. Venezuela’s GDP has also increased by 36.03% from 2020 to 2022. Further economic improvements could lead to an even more significant decrease in overall poverty within the country.

– Micaela Carrillo
Photo: Flickr

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Lessons From Venezuela’s Plan Bolivar 2000

Plan Bolivar 2000
Venezuela is facing a grave humanitarian emergency, with the National Survey of Living Conditions finding that about three-quarters of the population live in extreme poverty in 2021. Unemployment is spreading, public services and basic supplies are scant and hyperinflation is lingering. Critics blame President Nicolás Maduro for driving Venezuela’s once-promising oil-led economy to a failed petro-state. On top of economic mismanagement, Maduro’s government oversees “brutal policing practices,” jailed political opponents and “poor prison conditions,” giving way to an escalating refugee crisis with around 5.5 million Venezuelans fleeing the country since 2014, according to data from October 2020. The circumstances today are a far cry from about 20 years ago when the government aimed to reduce poverty in Venezuela through a project called Plan Bolivar 2000. Though the project came to a premature end, the lessons from Plan Bolivar 2000 can guide future poverty reduction programs in Venezuela.

Plan Bolivar 2000

Launched in February 1999, newly-elected president Hugo Chavez developed Plan Bolivar as part of a mission to engage the national military in anti-poverty activities and pull the country out of the recession. Plan Bolivar included efforts from the Air Force to provide free travel to those urgently in need while the Navy helped to fix refrigerators and established fishing cooperatives. The National Guard engaged in policing and constructing homes for the impoverished and soldiers gave mass vaccinations and food distributions. Literacy programs also formed part of Plan Bolivar 2000.

Plan Bolivar 2000 saw success in its first year — the program’s efforts led to the reparation of “thousands of schools, hospitals, clinics, homes, churches and parks.” More than 2 million disadvantaged people “received medical treatment” and more than 2 million children received crucial vaccinations, among other successes, Venezuelanalysis.com said. The Venezuelan government also reported increases in literacy.

The Flaws in the Plan

The program placed a significant amount of money in the hands of the military. Chavez’s $114 million fund for Plan Bolivar 2000 gave officials a newfound sense of power — In 2018, Venezuelan officials arrested General Victor Cruz Weffer, the army commander overseeing the program, on charges of illicit enrichment through offshore accounts.

Chavez canceled Plan Bolivar in 2002, intending to divert money away from the military and toward “allies in mayoral and state offices.” This spurred a small group of high-ranking military officers to briefly arrest Chavez, who, upon release, “purged the [military’s] top ranks” and diluted the power of the Defense Ministry.

Chavez filled the Ministry with officials who supported his leftist ideals and gave them access to cabinet posts as well as control of banks. He also forced military officials to pledge allegiance to him, appointed numerous “military officials to helm agencies” across the country and named countless “new flag officers” – a practice that his successor Maduro continued after taking power in 2013. According to Venezuelan NGO Citizen Control, by 2017, “active and former military figures had held as many as half of Maduro’s 32 cabinet posts.”

Lasting Effects

These actions confused the military hierarchy and created a “jumbled and partisan chain of command,” according to a Reuters investigation. Top officials spend more time pleasing the Socialist Party and commanding troops through civic duties than they do organizing military affairs.

With intelligence agents embedded in the military, many officers fear speaking out against Maduro and the possibility of facing arrest. This, paired with the high pay and power positions that top officials receive, means that the military’s loyalty to Maduro is strong and unfading.

Armed forces make up a significant part of Maduro’s support, with many officers doubling as ministers or holding other influential positions in his government. Despite his economic mismanagement and human rights violations, which led to “more than 20 countries [recognizing] opposition leader Juan Guaidó as interim president” by January 2019, Maduro remains in power.

Humanitarian Efforts to Help Venezuela

World Vision is assisting Venezuelans who have fled to Colombia, Ecuador, Peru and Brazil, through its Hope Without Borders project. Refugees receive food, shelter, medicine and hygiene kits as well as psychological assistance through child-friendly spaces. As of June 2021, World Vision had provided assistance to more than 71,000 Venezuelan refugees.

Key Takeaways From the Plan

Due to years of corruption and military bloating, Plan Bolivar 2000 failed. However, its early years saw numerous successes across the country, with the military standing as a force for good in providing education, housing and health care to those in need. As Venezuela suffers now more than ever, it can consider Plan Bolivar’s success, as well as the reasons for its failure, as a lesson to inform future poverty alleviation programs.

– Imogen Scott
Photo: Wikimedia Commons

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How To Destabilize Authoritarian Regimes

Destabilize Authoritarian Regimes
Development experts claim that freedom is a necessity in the fight to end poverty, yet more than 2.5 billion people around the globe live under authoritarian rule. As the world becomes increasingly digital, powerful autocrats gain access to virtual tools capable of stifling dissent and quashing liberty. Nowhere is this more evident than in China, where the government has taken steps to replace paper cash with a digital currency that central banks back. The transition would allow state officials to monitor the purchases and activities of every Chinese citizen, as well as enable the central banks to freeze an individual’s assets should they threaten party doctrines. However, blockchain could help destabilize authoritarian regimes.

How Blockchain Works to Destabilize Authoritarian Regimes

The blockchain, which Satoshi Nakamoto created in 2008, is an encrypted digital network that records information in a decentralized database. Nakamoto’s invention has paved the way for cryptocurrencies such as Bitcoin, Litecoin and Cardano to revolutionize the financial sector. The nature of cryptocurrency is such that governments cannot manipulate them nor monitor them; they are secure, private and resistant to authoritarian fiscal policy. Cryptocurrency “takes control of people’s monetary futures away from governments and places it in the hands of individuals,” said Ross Gerber, the CEO of Kawasaki Wealth and Investment Management. Nicolas Maduro cannot print crypto coins like the Venezuelan bolivar. Miguel Diaz-Canel and the Cuban government cannot intercept remittances that go to one’s crypto-wallet. Vladimir Putin cannot surveil transactions on encrypted trading platforms. Additionally, Xi Jinping cannot freeze crypto-accounts. Cryptocurrencies are actively destabilizing authoritarian regimes.

Laws Against Peer-to-Peer Exchanges

It should come as no surprise, then, that Algeria, Bolivia, Egypt, Iran and Russia have passed laws restricting peer-to-peer exchanges. Perhaps none have cracked down harder than China’s President, who enacted a comprehensive ban in September 2021. However, such legislation is more symbolic than practical, as cryptocurrency usage persists in each of the aforementioned nations. Alexei Navalny, a notorious Putin-critic and opposition leader, raised more than $300,000 with Bitcoin after the administration jailed him. Something similar happened in Nigeria; the government froze the assets of activists protesting a violent police force but they received supplementation through an infusion of cryptocurrency from supporters. “The only way to ‘shut down’ cryptocurrency is to disconnect the internet,” said David Yermack, a professor at NYU, adding that a government might just as well attempt to ban the sun from rising.

How Blockchains Can Revolutionize Information

The utility of Nakamoto’s blockchain with regard to destabilizing authoritarian regimes is more than fiscal. In the same way that Bitcoin revolutionized the financial world, so too will blockchain search engines revolutionize information. Such innovations offer trustworthy alternatives to state-run propaganda machines that specialize in misinformation. Readers will have “access to unbiased information online, as well as more ownership of their personal data and real digital privacy,” said Colin Pape, the founder of a decentralized search engine. With the groundbreaking technology, civilians living under authoritarian rule can circumvent these information blockades by logging into an encrypted web browser, verified by users around the globe in much the way that crypto miners authenticate Bitcoin exchanges, that tracks for credibility and accuracy.

The technologies that can destabilize authoritarian regimes are at the world’s disposal. It is essential to encourage their adoption and use in countries that lack freedom. Thanks in part to Nakamoto’s invention, authoritarianism could someday be a relic of the past, and poverty with it.

– Thomas Willhoite
Photo: Flickr
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WFP In Venezuela Feeds School Children

WFP in Venezuela
In April 2021, the United Nations World Food Programme (WFP) reached a deal to distribute food to vulnerable school children in Venezuela. The program ambitiously seeks to help 185,000 students in 2021 alone and 1.5 million children by the end of the 2023 school year. Since schools in Venezuela remain closed due to the COVID-19 pandemic, parents and teachers can pick up rations at their local schools. A monthly ration consists of nine pounds of lentils, 13 pounds of rice, one pound of salt and one liter of vegetable oil. The WFP additionally manages its own supply chain and partners with local teachers and nongovernmental organizations to distribute food. Once schools open again, the WFP in Venezuela will also teach school faculty about food safety.

First Shipments Arrive

Recently, the first shipments of food arrived in Maracaibo, Venezuela. The stockpile includes 42,000 packages of food for this month. The WFP in Venezuela targets children under six deemed to be the most food insecure. Originally, the program began in the state of Falcón and intends to expand to other Venezuelan states gradually. The first set of rations went to a total of 277 schools in the state of Falcón.

Venezuela’s Economic Crisis

According to the Council on Foreign Relations, 96% of Venezuelans live below the poverty line. The country is heavily reliant on the export of natural gas and oil. In fact, oil makes up one-quarter of Venezuela’s gross domestic product (GDP). As oil prices dropped dramatically in 2014, Venezuela began to undergo an economic crisis. Between 2014 and 2016, oil prices had decreased from $100 to $30 per barrel. Since 2015, over 5 million Venezuelans have left the country in search of better opportunities, according to the United Nations. Additionally, Venezuela’s GDP reduced by two-thirds between 2014 and 2019.

Venezuela was once the second-largest producer of oil in the world, behind the United States. Venezuela was also a founding country of OPEC in 1960. The country has had a long history of dictatorships and consolidation of the oil industry, which the state and a select few companies controlled. Some believe that the current president, Nicolás Maduro, underwent reelection through undemocratic means in 2018. In January 2021, after Maduro had claimed victory in the election, candidate Juan Guaidó argued that Maduro had won illegitimately. The United States and several other countries acknowledged Guaidó’s victory.

Although exact figures are unknown, the WFP estimates that one-third of Venezuelans do not have enough to eat. Furthermore, approximately 16% of children suffer from malnutrition within the country. About 7 million Venezuelans are in need of humanitarian aid.

The Importance of WFP in Venezuela

The WFP in Venezuela is much needed as the country struggles economically and fails to provide for its citizens. WFP representative Susana Rico said that “We are reaching these vulnerable children at a critical stage of their lives when their brains and bodies need nutritious food to develop to their full potential.” Hence, this program will be instrumental in providing the necessary resources to underserved young children.

– Kaylee DeLand
Photo: Flickr

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The Impact of COVID-19 On Poverty in Venezuela

The Impact of COVID-19 on Poverty in Venezuela 
The impact of COVID-19 on poverty in Venezuela has been significant in regard to food security and medical care, but food shortages and malnutrition were already rampant between 2015 and 2017 in Venezuela. By the end of 2018, wholesale prices doubled nearly every 19 days due to inflation. More than 3.4 million Venezuelans migrated in search of more stability and opportunity.

In response to these issues, Venezuelans protested against the authoritarian leader, Nicolas Maduro, in 2019. The outbreak of protests demanded a new constitution addressing issues related to economic instability and medical care. Then, on March 13, 2020, the first COVID-19 case occurred in Venezuela.

Since the first case of COVID-19 in Venezuela, the World Health Organization (WHO) reported 250,309 confirmed cases and 2,814 deaths. The impact of COVID-19 on Venezuela compounded on preexisting humanitarian issues of economic instability, health and food insecurity. In response, nonprofit organizations and international government organizations began providing aid to people in vulnerable situations in Venezuela.

Life Before the Pandemic

Prior to the spread of the coronavirus, Venezuela’s economy experienced a debt of higher than $150 billion. In addition, the GDP shrunk by roughly two-thirds, according to the Council on Foreign Relations. Due to this, Venezuela experienced the highest poverty rates in Latin America, affecting 96% of the people. These issues resulted in a lack of essential products such as medical care, potable water, food and gasoline.

Health Security in Venezuela

In the past five years, over 50% of doctors and nurses emigrated from Venezuela to escape economic instability. This is according to the Center for Strategic and International Studies. A declining health system was unable to provide aid for infectious disease, malnutrition and infant mortality. As a result, the spread of COVID-19 resulted in heavily populated hospitals with minimal resources.

Without adequate pay and protection for medical professionals, as well as a shortage of potable water and protective medical gear, Venezuela’s hospitals experienced difficulty in responding to COVID-19. According to WHO, around 3.4% of confirmed COVID-19 cases resulted in death. WHO predicts this number to be much higher in Venezuela. This is because the country’s hospitals lack basic X-rays, laboratory tests, intensive care beds and respirators.

In response to these issues, the National Academy of Medicine in Venezuela, a politically independent medical organization, sought to reduce the impact of the pandemic on existing health care systems. The Academy made a request to the U.S. ambassador to Venezuela, James Story, on May 2, 2021, for the U.S. to add Venezuela to its international donor list for millions of doses of COVID-19 vaccinations. Venezuela already received around 1.4 million vaccines from China and Russia.

However, the National Academy of Venezuela stated that to control the pandemic, the country needs to vaccinate 70% of the adult population. The vaccines they received represent less than 10% of what Venezuela needs.

Food Insecurity During the Pandemic

At the end of 2020, with exports at a halt during the COVID-19 pandemic, food inflation rose to 1,700%, resulting in a significant increase in food prices. As a result of inflation and international sanctions, the WFP also projected that Venezuela will experience a slow recovery to intensifying humanitarian issues, including food insecurity.

The impact of COVID-19 on poverty in Venezuela has resulted in 65% of families experiencing the inability to purchase food because of the hyperinflation of food products and inadequate income. In order to survive while experiencing food shortages, families in Venezuela reduced the variety of food and portion sizes of meals.

However, those in vulnerable positions, such as children, pregnant women, those with preexisting health conditions and the elderly, experienced malnutrition because of the inability to meet nutritional needs. The World Food Program (WFP) estimated that one of every three people in Venezuela is food insecure. During the pandemic, those experiencing food insecurity continued to increase. The U.N. reported that prior to the pandemic, one in four elderly people, a demographic that maintained the majority of wealth in Venezuela, skipped meals. During the pandemic, more than four in 10 have been skipping meals.

Humanitarian Response to the Impact of COVID-19 on Poverty in Venezuela

In 2020, the U.N. developed the Venezuela Humanitarian Response Plan, which seeks to provide 4.5 million adults and children throughout Venezuela with access to humanitarian assistance, according to OCHA. The plan requires $762.5 million to provide health care, water, sanitation and hygiene, nutrition, shelter and educational support. The plan carries out objectives of providing emergency relief, improving access to basic services and providing protection for the most vulnerable in Venezuela, especially during the pandemic.

Over 129 humanitarian organizations, including agencies associated with the U.N., will implement the Humanitarian Response Plan in Venezuela. It has already responded to emergency relief to COVID-19 and led to the return of tens of thousands of Venezuelan refugees, according to OCHA.

Throughout 2020, the U.N. received $130 million in support of this Humanitarian Plan. This allows humanitarian organizations to reach 3.3 million vulnerable people in Venezuela with basic necessities. This will include humanitarian assistance, per OCHA’s report. Additionally, the Plan allowed for 1.4 million people to receive humanitarian assistance in response to COVID-19.

The global pandemic and humanitarian issues are continuing in Venezuela, leading to a necessity for improved food security and medical care. As a result, throughout 2020, the United Nations, as well as humanitarian organizations, increased their presence in Venezuela. They will continue to encourage additional humanitarian organizations to provide humanitarian aid.

– Amanda Frese
Photo: Wikipedia Commons

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H.R. 161: Venezuela TPS Act of 2021

Venezuela TPS ActVenezuela is currently experiencing “the second-largest migration crisis” in the world. More than five million people have fled the country in the past five years. Many Venezuelans look to the United States as a potential place of refuge to escape the extreme poverty in Venezuela. To help accommodate the refugees, Rep. Darren Soto (D-FL-9) introduced H.R. 161: Venezuela TPS Act of 2021 in the House of Representatives. The bill will grant Venezuelan refugees temporary protected status (TPS) and other authorizations.

H.R. 161: Venezuela TPS Act of 2021

Introduced on January 4, 2021, the Venezuela TPS Act of 2021 is a bill that would make Venezuelan citizens eligible for temporary protected status, allowing refugees to stay, work and travel in the United States for 18 months from the date of legal enactment if the bill becomes law.

Many Venezuelan refugees had to completely abandon their old lives and seek out a better one without a plan in mind. With 96% of Venezuelans living in poverty, it is clear that there are very few opportunities left in Venezuela. As a result, Venezuelans need support and opportunities to succeed in a country that is not their own. On March 4, 2021, the House referred the bill to the Subcommittee on Immigration and Citizenship for further review.

Accepting Refugees Benefits the US

The U.S. is currently experiencing labor shortages in low-skilled jobs in the wake of COVID-19. According to research from The Conference Board, 85% of companies in blue-collar industries are struggling with recruitment. These jobs range from factory work to service jobs with commercial fast food employers.

Venezuelan refugees are eager to work and earn money to provide for their families in essentially any role. Many U.S. citizens are not interested in such jobs and hold degrees that make them more suitable for the white-collar industry. However, most Venezuelan nationals would be more than willing to fulfill these roles. This allows the refugees to earn an income while also helping the U.S. reduce its labor shortages. In this way, the Venezuelan TPS Act will aid the U.S. economy while providing a path out of poverty for Venezuelans.

Federal Register TPS Notice

On March 9, 2021, the Federal Register posted a notice that Venezuela would be granted TPS for 18 months through September 9, 2022, just five days after Congress moved the bill to the Subcommittee on Immigration and Citizenship. President Biden granted this allowance as part of his campaign promises. This allowance makes 323,000 Venezuelan people eligible to receive the same entitlements expressed in the Venezuela TPS Act of 2021. The bill still remains alive in the House, however.

Columbia is a good example of an open-door refugee policy. Colombia has been a leader in the refugee crisis, granting TPS to Venezuelan refugees for up to 10 years. This has helped nearly two million Venezuelans in the process. It is important to realize that most Venezuelan refugees are not looking to permanently settle in a new country and would rather return to Venezuela once the country is no longer under the dictatorship of President Nicolás Maduro. In a survey conducted by GBAO, 79% of Venezuelan refugees said they would be likely to return to Venezuela if the president was replaced by “an opponent of the Maduro regime” and the economy improved.

Extended TPS for Venezuelans

An improved home country is likely going to take longer than 18 months given the scale of the crisis in Venezuela. As a result, the U.S. should grant Venezuela TPS for longer than 18 months. Making this change falls on the members of the Subcommittee on Immigration and Citizenship as the Subcommittee is responsible for deliberating and suggesting changes to the Venezuela TPS Act. Increasing the span of Venezuela’s TPS would grant more long-term stability to hundreds of thousands of Venezuelan refugees while providing the U.S. with its labor needs.

The Venezuelan TPS Act of 2021 ensures a better future for Venezuelan refugees. Amending the bill to match Colombia’s provision of 10 years of TPS for Venezuelan refugees will provide long-term protection and support as refugees await the end of the crisis in Venezuela in order to return home.

– Jeremy Long
Photo: Flickr

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Addressing Malnutrition in Venezuela

Malnutrition in VenezuelaA meager 3% of Venezuelan families are considered food secure in a country where more than 96% of people live in poverty. Child malnutrition in Venezuela rose to 26% from December 2019 to March 2020. Maduro’s government, a hotbed of mismanagement, corruption and cronyism, has done little to help the poverty and malnutrition in Venezuela. Hyperinflation continues to suppress economic activity, and U.S. sanctions imposed to pressure Maduro into reform or exit, have limited Venezuela’s access to imported food, medicine and other basic goods. On April 19, 2021, the World Food Programme announced that it would be implementing a program to address food insecurity and malnutrition in Venezuela.

Child Malnutrition in Venezuela

A 2021 policy brief by medical researchers called Venezuela’s public health system “practically non-existent.” Especially with U.S. sanctions, many healthcare facilities are unable to obtain the medicine or medical equipment needed to properly function. The impact of the COVID-19 pandemic puts further strain on already limited health resources. As of April 2021, the Venezuelan Government has vaccinated less than 1% of the Venezuelan population.

According to a UNICEF report, 13% of children in Venezuela suffered from malnutrition between 2013 and 2018. Without access to sufficient calories, protein or generally diverse foods, many of these children will be held back developmentally, far beyond their childhood years. Venezuelan nutritionist, Raquel Mendoza, tells Thompson Reuters that “A population suffering from malnutrition implies we are going to have adults with less physical and intellectual potential.” Mendoza states further that “We’re going to see a regression in the development of the country because human resources are diminished.” These words express the urgency and importance of speedily addressing malnutrition in the country.

Before 2009, Venezuela’s infant mortality rate was steadily declining. In the first decade of the Chavez presidency, which began in 1999, infant mortality dropped by half. However, under Venezuela’s ongoing economic and sociopolitical crisis, the infant mortality rate has regressed to where it was in the 1990s. Even though many cases go unreported, statistics show that child mortality increased by 30% in 2016.

The World Food Programme Alleviates Malnutrition

Starting in July 2021, the World Food Programme (WFP) will provide school lunches for children between 1 and 6 years of age. The WFP’s goal is to reach 185,000 students by the end of 2021 and 1.5 million by the end of 2023. These meals will mainly go to preschool and special education schools, but public and private schools will receive aid too.

Despite the pressing need for foreign aid, the Maduro government has historically rebuffed aid attempts by international organizations and governments. According to the Washington Post, Maduro blocked almost $60 million worth of U.S. aid in 2019 and insisted that Venezuela was not a country of beggars.

The agreement reached between Maduro and the WFP Executive Director David Beasley on April 19, 2020, came after months of resistance by the government. The program’s operations will remain independent of the political turmoil and uncertainty of Maduro’s rule.

The Road Ahead

Although the aid cannot catapult Venezuela out of its current crisis, the WFP program will improve the lives of many families who do not know how or when they will eat next. Although rarely dissolving geopolitical tensions or toppling an unjust regime, humanitarian aid organizations can and do protect those who suffer from the impacts of corruption, mismanagement and conflicts of others.

– Alexander Vanezis
Photo: Wikimedia Commons

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Blackouts: The Issue of Electricity in Venezuela

Electricity in VenezuelaOn March 7, 2019, Venezuela entered the worst power outage in the country’s history. Plunging all 23 states into darkness, the blackout lasted over five days in majority of the country. The economic losses triggered by this event exceeded $800 million and led to the deaths of an estimated 46 people. Electricity in Venezuela has since become a huge cause of concern for people.

Blackouts in Venezuela

Regrettably, this blackout was not an isolated incident, although it was the longest. Blackouts have become a routine aspect of Venezuelan life, dating back to as early as 2010. In a country where 96% of the Venezuelan population lives in poverty, these blackouts serve only to exacerbate the struggles of a vulnerable population. They strip people of access to basic necessities like water, food and fuel. Their root causes are often unclear although the key contributing factors are widely agreed-upon.

Understanding the Power System

In 2007, Venezuela’s private power companies were nationalized and transformed into one state-run monopoly known as Corpoelec. The company is underfunded, rife with corruption and unable to recover its own operating costs. The factors creating this untenable situation for Corpoelec date back even further to 2002 when national electricity rates were frozen. In Venezuela, “consumers pay only 20% of the real costs of producing power, delivering Venezuelans the lowest electricity prices in Latin America.” The drawback to these low rates is that energy is extremely overused and that Corpoelec is unable to generate sufficient revenue to fund infrastructure investments or even basic maintenance of its facilities.

Overdependence on Hydropower

The aforementioned problems are exacerbated by Venezuela’s near-complete reliance on hydropower from just one dam. The Guri Dam located in the eastern state of Bolívar accounts for 80% of the country’s electricity production and its systems are woefully neglected. The dam currently operates at a capacity considered unsustainable, “jeopardizing the machine room in the case of a flood,” according to experts. In a region where flooding is common, this is cause for concern.

Whereas other countries that rely heavily on hydroelectric power like Brazil and China have made large investments into other forms of energy, Venezuela’s ability to shift away from hydropower is crippled by underfunding, a lack of engineering power from within the country and corruption.

Corpoelec has stagnated progress as well. The company, “paid millions of dollars in no-bid contracts to political connections,” to maintain its dominance. Projects to build new dams and other forms of electricity production like thermal or wind have routinely been stalled due to a lack of funding and inadequate staffing.

The Cause of the Blackout

The March 7 blackout that heavily circulated the news was caused by a system failure at the Guri Dam. It was initially painted as a terrorist attack by president Nicolás Maduro, who tweeted, “The electrical war announced and directed by the imperialist United States against our people will be defeated.”

The Venezuelan president’s claim was that the U.S. had caused the power outage through a cyberattack on the hydroelectric plant. However, engineers who worked on the dam later clarified that the plant’s electronic monitoring system is not actually connected to the internet, proving a foreign attack to be an unlikely root cause. The plant has been poorly maintained and neglected for a very long time. In actuality, failure to properly manage the electricity grid may have caused a fire has been deemed the likely cause, and unfortunately, there is no quick-response system in place at the facility to protect its systems from damage.

The Future of Electricity in Venezuela

To ensure the return of consistent electricity to the people of Venezuela and protect against future blackouts, massive overhauls would be beneficial. However, such agendas seem unrealistic given the current economic and political climate in the country. Rather, a focus on increased upkeep and basic maintenance of power plants offers a more realistic path forward. This requires access for NGOs to bring in engineers and consistent revenue toward infrastructure repair. Without this basic funding and commitment from the government, the Venezuelan people will continue to suffer through blackouts.

– Scott Mistler-Ferguson
Photo: Flickr

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Reforms for Saving the Venezuelan Economy

Saving the Venezuelan EconomyA combination of poor leadership and crippling sanctions have created a nation-wide economic crisis in Venezuela. The Center for Strategic and International Studies found that even before U.S. sanctions were placed on Venezuela, the country was already enduring hyperinflation, had seen food imports fall by 71% and more than two million Venezuelans had fled the country. Nevertheless, sanctions only exacerbated the crisis as Torino Economics found U.S. sanctions on Venezuela were associated with an annual loss of $16.9 billion in oil revenue. As a result, the Atlantic Council reports that more than 80% of Venezuelan households are food insecure and 3.7 million individuals are malnourished. Consequently, refugees filed more asylum claims globally in 2018 than any other country has. The number of Venezuelan migrants and refugees is expected to reach eight million in 2020, surpassing Syrian migration by more than three million. Reforms in the county are being implemented with the aim of saving the Venezuelan economy.

Saving the Venezuelan Economy

While this economic collapse still ravishes the country, there is certainly hope for the future. Due to both internal and external pressures, the president of Venezuela, Nicolás Maduro, has begun to encourage policies of economic liberalization and privatization that are indicating an economic rebound.

Toward the end of 2019, Argus Media reported the Venezuelan government was beginning to ease economic controls. Specifically, the Maduro government erased most price controls, loosened capital controls, tightened controls on commercial bank loan operations, and most importantly, began to accept informal dollarization. Immediately these policies curbed the levels of hyperinflation that had caused the food crisis across the country. Advisers estimate inflation to be at only 5,500%, a significant improvement compared to the International Monetary Fund forecasts that predicted inflation levels of more than 10 million percent. This is largely in part to the importation of dollars into the Venezuelan economy, pushing out the uselessly-inflated Bolivars. Indeed, a Bloomberg study found Venezuela’s economy is increasingly dollarized, as 54% of all sales in Venezuela by the end of last year were in dollars. Most importantly, food and medicine imports have rebounded, now reaching 15% of the population.

Privatization of the Oil Industry

In addition to the Maduro government relaxing economic controls, the economic rebound in Venezuela has occurred due to increased privatization of the oil industry. Despite being under the control of the military for years, Venezuela’s state-owned oil company has trended toward letting private firms handle operations, aiding in fixing the mismanagement perpetrated by the military’s control of the industry. For the first time in decades, the private sector accounted for more than 25% of GDP in 2019 and likely more by the end of 2020. Consequently, the Panam Post reported that oil production increased by more than 200,000 barrels, a 20% increase following privatization.

Initiatives to Help Venezuelans in Poverty

The South American Initiative, through its medical clinic, provides medical care and medicine to Venezuelans in need, with a special focus on mothers and children. To provide these essential services, it relies on donations that people provide on the GlobalGiving platform.

Fundacion Oportunidad y Futuro addresses hunger and malnutrition with regards to children in Venezuela. It is running in an initiative to provide meals to 800 school-aged children in Venezuela. It also operates through donations via the GlobalGiving platform.

The Future of Venezuela

While there is hope to be found in these reforms, Venezuela has far from recovered. The National Survey of Living Conditions indicates that more Venezuelans are in poverty in 2020 than in 2018, with food security decreasing another 7% over the past two years. The average income of Venezuela remains low at just over 70 U.S. cents a day. These reforms are the foundational steps needed to begin to reverse the economic trend that has relegated millions of Venezuelans to extreme poverty. If the economy is ever to correct itself, liberalization and privatization will be the jumping-off point for an economically thriving Venezuela in the future.

– Kendall Carll
Photo: Flickr

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USAID in Venezuela, Strengthening Local Economies

USAID in Venezuela, Strengthening Local EconomiesUSAID in Venezuela aims to be a catalyst for the international response to aid impoverished communities in Venezuela. It provides more than $200 million to diminish the humanitarian crisis triggered by Nicolás Maduro’s regime. Eradicating poverty is not only a national but an international affair. The decline of democracy in Venezuela can also be seen as a consequence of the increase in national poverty. As such, USAID in Venezuela is also a matter of national security and economic stability.

United States’ Response to the Crisis

According to the Department of State, the United States is the largest donor responding to the Venezuelan crisis, with over $856 million in total assistance. However, helping does not only mean providing aid for Venezuelans living in their country. The United States also offers support for those who fled to nearby countries. The aid covers 16 Latin American nations, such as Colombia, Ecuador, Peru, Argentina and Chile.

What USAID Covers in Venezuela

  1. Food: Hot meals and water.
  2. Sanitation: The organization provides hygiene and health for the affected population.
  3. Temporary shelter
  4. Educational services
  5. Protection for vulnerable children

Due to the COVID-19 pandemic, USAID began to prioritize life-saving humanitarian assistance in Venezuela. This includes basic healthcare, providing access to medicine and supplies, training healthcare workers and combating other infectious diseases like Malaria.

USAID in Venezuela, Strengthening National Security and Economy

In Maduro’s regime, U.S. efforts to sustain the Venezuelan people externalize a political decision to disapprove Maduro’s resolutions as a leader.

“We do this because our National Security Strategy prioritizes the reduction of human suffering and doing our part to respond to crisis situations make Americans safer at home,” argues the U.S. Department of State. Moreover, foreign aid triggers a better political understanding between nations.

On the other hand, a lack of governance and extreme poverty create economic conflict between countries. In January 2021, Maduro announced that the country had received 98.6% less income than 2013, the year that he took office. As unemployment and hunger grew, other nations imposed sanctions on Maduro’s government. The latter has had a domino effect on Americans as the Venezuelan government was unable to pay their debts to Americans who invested in foreign debt.

Foreign aid is not merely an external investment but a strategic and mutually beneficial deal. Nations all over the world depend on each other to safeguard their people’s basic needs. When a nation suffers, the global community is affected. By strengthening local economies, USAID in Venezuela steadily continues to alleviate poverty and protect vulnerable groups.

– Paola Arriaza Avilés
Photo: Flickr