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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

Humanitarian Crisis in Venezuela
Venezuela is a Latin American country located in the northern region of South America. It has been under an oppressive regime since 1999. The country was once a prosperous oil-rich country. However, the past and present leadership of Hugo Chavez and Nicolas Maduro have led to economic collapse and horrible conditions that its citizens face every day. These conditions have caused 4.6 million Venezuelans to flee since 2016, accounting for 15% of the country’s current population. Here are five facts about the humanitarian crisis in Venezuela.

5 Facts About the Humanitarian Crisis in Venezuela

  1. The ever-increasing hyperinflation of the country leaves its citizens with virtually worthless income. With a recorded inflation rate of 9586% in 2019, the income earned by Venezuelans can come out to be as little as $0.72 per workday. The bolivar currency that has been used for decades in the country has become almost useless since many goods and services are being charged in U.S. dollars at a regular U.S. price point. With an exchange rate of 1 VEF (Bolivar) to $0.10, something as simple as a pound of apples is now valued at $18. Buying food, hygienic supplies and clothing can now cost months’ worth of income for a household.
  2. Venezuelan women who try to find refuge in neighboring countries are often kidnapped and forced into sexual exploitation. There is a growing migration rate of Venezuelans to other countries to find better living conditions. Many of these migrants illegally cross the border, which makes them vulnerable to xenophobia and exploitation. Accounts of the prostitution of hundreds of young girls crossing borders by bus or foot at a time are common in the neighboring country of Colombia. Migrating Venezuelan women face other dangers as well. From January to August 2019 alone, 27 Venezuelan women were killed in Colombia. The majority of the incidents were related to sexual violence.
  3. Basic goods in supermarkets are extremely scarce, expensive and require waiting in line for hours. With prices already soaring and taking up most of the income of Venezuelans, there is a dangerous scarcity of basic items such as toothpaste and drinking water. Families line up outside of supermarkets the night before or stand in long lines of up to four hours in hopes of food being available. The scarcity of virtually every product including basic medicine and hospital equipment has increased the maternal mortality rate by 65%. The infant mortality rate also increased by 30% in recent years.
  4. There are frequent power outages, which lead to higher water insecurity. Like the scarcity of basic items, utilities such as running water and electricity have suffered a shortage in Venezuela. The electricity blackouts cause water shortages that can last up to two weeks. As a result, citizens are forced to use contaminated water. This in turn arises concerns of infections and diseases such as Hepatitis A and typhoid fever. In March 2019, many areas in the country went 10 days without electricity. Notably, on March 25, 14 of Venezuela’s 23 states experienced a complete outage. During this time, men, women, children and newborns had to resort to showering with sewage water or dirty water collected during rainfall.
  5. The autocratic president, Nicolas Maduro, tampers with elections and throws political opponents in prison. The party and president in power hold full responsibility for the situation in the nation. The rigged election process keeps them in power, in spite of the crisis. In the last elections of 2018, bribery with nation benefit cards and other forms of aids were used to get the president re-elected. Supporting an opposing leader or party is becoming harder since the Maduro regime has arrested more than 12,800 people linked to anti-government protests and beliefs. Notably, Leopoldo López was held under house arrest for almost four years after calling people to the street to protest the government.

Who is Helping?

Several organizations have taken the initiative to combat the humanitarian crisis in Venezuela. One of these organizations is the South American Initiative, which has been using monetary donations to feed starving children and adults, helping approximately 23,500 people. The initiative also supports Venezuelan refugees in camps in the nation and neighboring countries, providing almost 71,000 meals. The organization has raised $48,903 for aid.

The humanitarian crisis in Venezuela has been ongoing for over 20 years. Scarcity, inflation, corrupt leadership and refugee exploitation are some of the many problems the nation faces. Thankfully, there are efforts from organizations to help relieve Venezuelan citizens. However, much more needs to be done before the crisis can be completely eradicated.

Veronica Spinelli
Photo: Flickr

venezuelan crisisVenezuela is currently facing a political and economic crisis. Along with severe economic factors such as food shortages, lowered oil production and inflation, there are also two men who claim to be president. Socialist leader Nicolás Maduro and opposition leader Juan Guaidó both claim to be president after widely recognized fraudulent elections in 2018. While Venezuela struggles with choosing its president, the country is falling apart. Thankfully, one NGO is working to help people impacted by the Venezuelan crisis.

A Political Crisis

The 2018 election caused confusion and turmoil in Venezuela. Nicolás Maduro was elected after the death of his socialist predecessor, Hugo Chávez. Many Venezuelans blamed Maduro for the struggling economy since he was first elected in April 2013. To ensure his reelection in 2018, Maduro’s administration blocked many opposition party members from running against him. Some went to jail or into exile. The opposition as well as the people regarded the election as fraudulent and rigged.

After the election, the National Assembly claimed that the presidency was void. National Assembly leader Juan Guaidó appointed himself acting president. In response, Maduro created a new National Constituent Assembly with only government loyalists as members. The military and police still support president Maduro and continue to do so as he grants them raises and grants top members important roles in the economy. However, around 50 countries, including the U.S., recognize Guaidó as the acting president.

Economic Crises

Throughout the history of Venezuela, oil production has been central in the economy.  Oil exports make up 95% of Venezuela’s export revenue and 50% of its GDP. However, within the past two decades, oil production has steadily dropped. Venezuela’s GDP decreased by double digits for the third year in a row in 2018, reaching its new low. This has led to hyperinflation, which is now more than 80,000% annually. Many people blame Maduro for the drop in production due to his appointment of inexperienced leaders and his lack of investment in the industry. Importantly, the drop in oil production has led to decreased funding for education, infrastructure and medical care. Along with hyperinflation, these factors have created hardship for the working class.

Not only did oil production drop during Maduro’s first term, but he also tried to reduce the gap between the rich and the poor by capping prices on goods to make them more affordable to the working class. This policy backfired, as many companies ceased production because of lack of profit. This resulted in food and goods shortages across the country, leading to 3.7 million Venezuelans being undernourished. As a result of this and the lack of adequate healthcare, water and education, many Venezuelans are fleeing the country. According to the U.N., 3.9 million people have left Venezuela to seek a better life.

Helping Those Impacted by the Venezuelan Crisis

The South American Initiative, founded in 2016, is a NGO addressing the Venezuelan crisis. It helps by providing resources for the impoverished and starving people of Venezuela. This initiative has held major campaigns, such as the “Help Venezuelan Orphans” and “Help Hospitals and Children” campaigns. In all, it has helped more than 10,000 people. In order to provide a stable and lasting food source for hospitals and children, the South American Initiative has invested in large agricultural development. This has allowed the organization to distribute 70,786 meals to people in need. The South American Initiative has also utilized donations to provide medicine to those who need it in Venezuela.

The Venezuelan crisis is not only an economic issue but also a humanitarian issue, as people face unlivable conditions. Neither Venezuelan leader has the means to provide for people’s healthcare, food, water and education. This makes the work of organizations like the South American Initiative central in addressing the needs of those affected by the Venezuelan crisis.

– Samira Akbary
Photo: Flickr