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Poverty and Politics in Venezuela

Politics in Venezuela
Venezuela is the most poverty-stricken country in Latin America. The nation’s position in poverty has led to Venezuelan citizens requiring aid from the United States, more so than any nation in Latin America. Some argue that poverty in Venezuela is mainly due to the politics in Venezuela. Notably, the politics within the country receive influence from both inside and outside parties. Below is an introduction to how the politics of Venezuela has influenced these seven facts about poverty in Venezuela.

7 Facts About Poverty in Venezuela

  1. The average person living in Venezuela lives on 72 cents per day.
  2. Inflation has decreased the value of the Venezuelan currency.
  3. Although it is rich in oil, it does not export enough of it to boost its economy.
  4. The U.S. has placed sanctions on Venezuelan trade, further accentuating poverty in Venezuela.
  5. Almost 5 million people have immigrated from Venezuela in the past 5 years because of the extreme poverty levels there.
  6. “Multidimensional poverty” affects 64.8% of homes in Venezuela (“multidimensional poverty” includes aspects of poverty other than just income).
  7. The income poverty rate is at 96%.

How Politics in Venezuela Plays a Role in Poverty

The President of Venezuela, Nicolás Maduro, has not allowed Venezuelans to receive aid from the U.S. The U.S. does not recognize Maduro as the legitimate president and that makes it much more difficult for Venezuelans to receive the aid that they desperately need. Also, Maduro has control over the country’s military. Therefore, people do not have much of a choice, but to follow him or to risk their lives.

Maduro has denied the U.S.’s foreign aid so that it does not go to the people suffering from poverty in Venezuela. He does not want to lose his power and if the aid is given to the people that oppose him, it could give them an edge that they need to overthrow him. Additionally, he mistrusts the U.S. because of incidents in the past. Maduro (and others) suspect that USAID worked alongside companies in the U.S. to cause a coup in Cuba. All of this was said to be under the guise of foreign aid.

A Hopeful Newcomer

Enter a new player — Juan Guaido. Guaido was elected by the National Assembly as president because Nicolás Maduro unconstitutionally kept the power of the presidency after his term was over. The U.S. officially recognizes Guaido as the president of Venezuela, even though he has no real power yet. Also, only around 20% of Venezuelan citizens approve of Maduro. He is a ruthless leader who allows for the occurrence of violence within his country.

Moving Forward in the Wake of COVID-19

Countries in Asia, such as Russia and China, are backing Maduro. However, the European Union is about to follow suit with many other nations and recognize Guaido as the President of Venezuela. The current state of the world has not helped any country, Venezuela is no exception. The country was already in crisis before the pandemic and now COVID-19 has made it even harder for them to get back on their feet.

With that said, hope is not lost. If there is any country with the capabilities to find a way to get the people of Venezuela what they need to survive, it is the U.S. The pandemic has caused people to take a hard look at the world around them and re-analyze many decisions. People all over are rising to the challenge and the Venezuelan crisis should be no different.

– Moriah Thomas
Photo: Pixbay

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COVID-19 and The Venezuelan Crisis

COVID-19 and the Venezuelan crisisOf all households in Venezuela, 35% depend on financial support from family members working overseas. According to local economic researcher Asdrúbal Oliveros, remittances to Venezuela will suffer a heavy blow as a result of the COVID-19 pandemic and its severe effect on the global economy. With an estimated $2 billion decrease in remittances, the health of millions of Venezuelans is in serious danger due to the combined effects of COVID-19 and the Venezuelan Crisis.

The World Bank believes the pandemic will cause a 20% decrease in global remittances, the biggest drop in recent years. With 90% of citizens in Venezuela living in poverty, the drastic fall in remittances and oil prices spell trouble for countless people. Furthermore, the unprepared Venezuelan healthcare system has struggled to control the pandemic.

Despite numerous U.N. groups imploring for money-transfer businesses to make international transfers cheaper, Venezuela’s foreign exchange policy and volatile economic system are difficult to reform. “Venezuelan remitters” are instead left using unnecessarily complex methods to send money back home.

The Venezuelan Government Under Nicolás Maduro

In 2019, the Venezuelan government politicized humanitarian aid when it vilified the U.S. government’s foreign aid as the beginning stage of a U.S. invasion. However, the government has finally acknowledged the long-denied humanitarian crisis in Venezuela. President Nicolas Maduro has accepted the deliverance of aid after negotiations with the International Federation of Red Cross and Red Crescent Societies (IFRC). Subsequently, the United Nations declared it was increasing its efforts to aid Venezuela.

Despite the progress made, politics continue to negatively affect potential aid. According to Miguel Pizarro, a U.N. Representative, the political influence leaves many without fundamental necessities. Pizarro explains, “If you demonstrate and raise your voice and go to the streets, you do not have food, medicine, water or domestic gas.” Pizarro continues, “Eighty percent of Venezuelan households are supplied with gas by the state. If you become active in the political arena, they take away that right.”

Sharp declines in oil value, numerous embargoes globally and negligent economic policy largely caused the humanitarian emergency in Venezuela. Since 2014, the nation’s GDP has fallen by 88%, with overall inflation rates in the millions. A 2019 paper published by economic researchers at the Center for Economic and Policy Research attributed medicine, food and general supply deficits in 2018 to the deaths of at least 40,000. According to findings from the Coalition of Organizations for the Right to Health and Life, a scarcity in medicine puts over 300,000 Venezuelans in peril.

Dr. Julio Castro, director of Doctors for Health in Venezuela, says “People don’t have money to live. I think it’s probably a worst-case scenario for people in Venezuela.” Despite recent increases in aid and medicine from U.N. operations and the IFRC, the Venezuelan struggle persists.

Venezuelan Healthcare Amid COVID-19

Most of the Venezuelan population can only afford to receive aid from public hospitals. These public hospitals often experience persistent deficits in necessary supplies. A study conducted by Doctors for Health indicated that 60% of public facilities frequently face power outages and water shortages.

In response to this, the Venezuelan government authorized $20 million in healthcare aid, which will be administered by the Pan American Health Organization (PAHO), a territorial agency of the World Health Organization. They will use the capital to develop COVID-19 testing and to obtain personal protective equipment (Ex: masks, gloves, etc).

According to Luis Francisco Cabezas of local healthcare nonprofit Convite, a recent study identified a worrisome struggle. Data indicated that roughly six in 10 people had reported trouble obtaining medication for chronic illnesses. The problem has only worsened since the pandemic.

Local Nonprofits Redirect Efforts Toward Venezuelan Crisis

Numerous nonprofits in the country have responded to COVID-19 and the ongoing Venezuelan crisis by shifting their efforts. A director for Caritas, a Catholic charity, says the ongoing economic disaster compelled his organization to prioritize humanitarian work over its original mission of civil rights advocacy.

Similarly, Robert Patiño leads a nonprofit civil rights group, Mi Convive, which shifted to humanitarian work in 2016. Since its inception, the organization has directed its efforts to child nutrition. Through the group Alimenta La Solidaridad, Mi Convive has opened over 50 community kitchens in Venezuela, feeding over 4,000 kids weekly.

Although the efforts by Venezuelan nonprofits have aided thousands, it is not enough. COVID-19 and the Venezuelan crisis need to be in worldwide focus until the government can reliably provide for its citizens. The work of numerous good samaritans can only reach so many people, and their work is constantly hindered by “Chavistas,” a group of Venezuelans who are loyal to President Nicolas Maduro’s government. Mi Convive’s Robert Patiño claims the radicals have been known to go as far as withholding food boxes from areas where the nonprofit is trying to begin new programs. The humanitarian emergency in Venezuela must be appropriately addressed, for the livelihood of millions of people are at stake.

– Carlos Williams
Photo: Flickr

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U.S. Sanctions and Venezuela’s Poor

Sanctions and Venezuela's PoorWith the recent political unrest in Venezuela surrounding the controversial election of President Nicolás Maduro, the United States has placed financial sanctions on Maduro and some of his high-ranking officials. These sanctions are aiming to freeze any of Maduro’s U.S. assets as well as halt all business between him and U.S. citizens. However, there may be an unfortunate connection between U.S. oil sanctions and Venezuela’s poor.

These individual embargoes may not be enough, though. The Trump administration is still considering whether or not to place economic sanctions on Venezuela’s oil sector, according to Reuters. This would hit the country hard, as the oil industry accounts for upwards of 95 percent of Venezuela’s export earnings. Venezuela is also the third largest supplier of oil exports to the United States.

While it is important to analyze the effects of economic sanctions on a nation’s elites, what are the effects of these actions on Venezuela’s general populace? More specifically, what effects will these actions against President Maduro have on his people, and are there potential collateral effects linking U.S. oil sanctions and Venezuela’s poor?

First, it should be noted that there are multiple types of sanctions that a country can pass. In terms of U.S. embargoes pertaining to Venezuela, the kinds of sanctions being enacted and debated are in regard to the Specially Designated Nationals and Blocked Persons (SDN) List and the Sectoral Sanctions Identification (SSI) List, respectively.

As described in a case study by the U.S. State Department, sanctions targeting the SDN List are against individuals and entities, such as President Maduro and his high-ranking officials. SSI sanctions, on the other hand, target sectors in a foreign economy, such as the oil and gas industries in Venezuela.

According to the Council on Foreign Relations, the U.S. uses economic and financial embargoes more than any country or any body of countries in the world. As of 2015, the most notable U.S. sanctions historically have been levied against Cuba since 1960, Iran since 1984, North Korea since 2008, and the Ukraine/Russia since 2014.

U.S. embargoes against Venezuela began in 2015 when President Barack Obama issued an executive order targeting seven of Maduro’s high-level officials. New sanctions from late July added President Maduro himself to the SDN List.

In general, embargoes levied against individuals on the SDN List appear to have minimal collateral effects on that person’s respective regional economy. This is what the Obama administration argued when it placed sanctions on Venezuelan officials in 2015, and it is what the Trump administration is arguing now.

Sectoral sanctions, however, seem to have a broader impact on the country at large. The more a sanctioning country is a contributor to the economy of its target, the higher the potential is for collateral damage to occur.

For example, after monitoring the effects of sanctions placed on Russia by the United States and the European Union in 2014, U.S. State Department Deputy Chief Economist Daniel Ahn and Georgetown University professor Rodney Ludema concluded in a study that “sanctions [on Russia]…appear to be ‘smart,’ in the sense of hitting the intended targets…while causing minimal collateral damage.”

The E.U., however, who is Russia’s largest trading partner, had a different story. A study by the European Parliament in 2015 noted that Russian officials predicted an 8-10 percent loss of the country’s GDP due to the E.U. sanctions, resulting in a multitude of indirect collateral effects on the Russian economy and its people.

The scale of trade relations, therefore, directly correlates to the collateral damage sanctions have on an economy, and this must be considered when discussing U.S. sanctions and Venezuela’s poor. The oil sector accounts for 95 percent of Venezuela’s export earnings and 25 percent of their GDP, and because the United States is the country’s largest export destination according to OPEC, a sectoral sanction of this size could potentially have massive effects on Venezuela’s populace.

If Venezuela were to cease relations with their primary trade partner and lose the respective export earnings from their primary resource, the result would be a substantial decrease in national revenue. Money that would normally be used for social programs would be stifled, bringing more harm to a population that is already suffering from economic and political hardships plaguing the country.

Because of all this, it is important to watch the Trump administration and see how the President decides to handle the complex issues surrounding Venezuela. There is a viable argument that collateral damage would result from U.S. oil sanctions and Venezuela’s poor would bear the brunt of that damage.

– John Mirandette

Photo: Flickr

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How to Stop the Brain Drain in Venezuela

Since 1999 when President Hugo Chavez came into power, more than one million Venezuelans have left their country in the hope of a better future. Within this group, 90 percent of the emigrants held a bachelor’s degree or more. The migration of these skilled individuals to foreign countries has created a significant brain drain in Venezuela. Now the country must focus on ways to stop the outflow of human capital before its skilled labor force is further depleted.

The citizens leaving Venezuela have been looking for a better quality of life and greater personal security. The International Monetary Fund is predicting inflation in Venezuela to increase by 720 percent this year and then, in 2018, by 2068 percent. Along with hyperinflation, this year the unemployment rate is expected to surpass 28 percent in 2018.

As unemployment was 7.4 percent in 2015, the significant stresses on the Venezuelan economy have led to great political unrest. Since April 1, thousands of citizens have been arrested in protests, hundreds have been injured and more than 60 people have died. In 2016, 2732 political arrests were made, suggesting high levels of state repression.

Maria Alesia Sosa, a freelance journalist in Miami who was a part of the significant brain drain in Venezuela, explains that while working 14 hour days she would earn less than $50 a month in her home country. Along with low pay, the high crime rates led to her decision to leave the country. Every 25 minutes a person is murdered in Venezuela. In 2016, three locations in Venezuela were listed in the top 10 most dangerous cities in the world, with Caracas taking the number one spot, according to a Mexican thinktank.

On top of job insecurity, weak purchasing power and significant criminal activity, one of the country’s main sources of revenue has been reduced in recent years. Crude oil output supplies Venezuela with 95 percent of its GDP. However, in 2002 and 2003, the oil strikes to overthrow President Chavez had the country facing large layoffs within the state controlled oil company, PDVSA.

This was the beginning of the large brain drain in Venezuela when many highly skilled industry workers left their home country to work for multinational corporations like ExxonMobil and Chevron. In 2013, when President Nicolás Maduro was announced as Chavez’s successor, oil production fell by 16 percent and still has not recovered. This outcome was a result of further government intervention in PDVSA which led to a drain on the expertise needed to boost production.

With these significant decreases in the nation’s skill set, emigration is harming key industries from health and medicine to banking and finance. The human capital necessary to rebuild the nation after the political turmoil ends is depleting.

With 44 percent of Venezuelans stating that they left due to personal or professional development needs, job creation becomes an important consideration. The country should consider providing more scientific research funding to create an attraction for emigrants to return to their country. Additionally, it would provide incentives for citizens within the country to pursue further education as the nation currently has stalled recruitment for new talent. With success, the investment in research would benefit the medical industry as well as many others.

In addition, the government should focus on providing better job opportunities while promoting inclusion. This would improve the opportunities for citizens to gain economic returns while also reducing the unemployment rate in the country. Additionally, by improving job prospects, Venezuela can improve the security of its nation. By increasing employment, crime and underground economic activity are reduced as can be seen in many places from Chicago to Liberia.

Providing job opportunities will not fix all the issues of poor economic conditions alone. These strides must be coupled with reductions in corruption as this negatively influences the quality and returns to education. Therefore, governments should implement anti-corruption measures by increasing transparency and enhancing bureaucratic quality.

The prospective changes in Venezuela may not bring back those citizens who have already left yet they could make the country more attractive for those remaining. While political strife has created a brain drain in Venezuela there is still hope to improve the quality of life and security within the country to bring the people back.

– Tess Hinteregger

Photo: Google

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Political Unrest, Crime in Venezuela

Crime in Venezuela
February 12 was National Youth Day in Venezuela, a day to commemorate the Battle of La Victoria of 1814, when Venezuelan students and troops achieved victory over Spanish colonists.

To celebrate, millions of students passively protested the Venezuelan government, which is led by President Nicolas Maduro. Youth in Venezuela are tired of living in an unstable and insecure environment. Last year, almost 25,000 homicides took place in the country, which has a population of about 30 million people.

While students peacefully marched their way through Caracas, Merida, Valencia, San Cristobal and Puerto Ordaz to bring to light the corrupt government, the Venezuelan military used gas bombs and guns to control the crowds. On February 12, three protesters were shot and killed in Caracas and many were injured.

In a nation already filled with tension, citizens who were pessimistic about the situation before National Youth Day are becoming increasingly cynical now. Last year in Venezuela, prices rose 56 percent and the country recorded almost 25,000 murders.

The government has tightened security on all airways of communication, taking control of television, radio and the Internet. Venezuelans have been using Twitter to communicate among each other and to the world. However, the government has now shut down this medium of communication, therefore restricting people’s access to information.

The political unrest has caused food shortages, economic stress and increased crime in Venezuela. As inflation and crime reach all-time highs in the country, citizens are looking to escape. A website that helps Latinos emigrate, mequieroir (“I want to leave”) reported record traffic during the past month. The worsening state of public affairs in the country is pushing people to look elsewhere to make a living and enjoy a high quality of life.

– Haley Sklut

Sources: Venezuela , YouTube, NBC News
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