Foreign Policy Blogs

The Collapse of Chavez’s Venezuela

An opposition supporter holds up a giant hundred Bolivares note with the word, "Hungry" written on it during a gathering to protest against the government of Venezuela's President Nicolas Maduro, and economic insecurity and shortages, in Caracas August 8, 2015. (REUTERS/Carlos Garcia Rawlins)

An opposition supporter holds up a giant hundred Bolivares note with the word, “Hungry” written on it during a gathering to protest against the government of President Maduro, and economic insecurity and shortages, in Caracas. (REUTERS/Carlos Garcia Rawlins)

By Matthew Barbari

Problems for Venezuela and its president Nicolas Maduro continue to mount as the country heads inexorably towards its collapse. An economic system centered around oil exports revenues, a government that can no longer provide public services such as electricity or medical care, and growing civil unrest and violence have led Venezuelans to look for an alternative to Chavismo.

Under Hugo Chavez—Maduro’s predecessor—the Venezuelan economy boomed due to the high price of oil, with barrels selling for well over $100. With crude oil accounting for 96% of the country’s exports, Chavez’s political movement relied on heavy spending on social welfare programs.

However, the government failed to improve the oil production process, leading to a lower than average export price. With the price of a barrel produced in Venezuela dropping to around $20 in February, the entire economy dropped with it. This collapse in oil prices has compounded with an incredibly high inflation rate causing supply shortages in most basic necessities.

The economic troubles have permeated through all aspects of life of Venezuelans. Massive food shortages, lack of proper medical care and constant power shortages are pushing the country close to a humanitarian crisis and are enraging even the most loyal of government supporters.

While Hugo Chavez was sufficiently charismatic to maintain public support during previous economic struggles, President Maduro is not. Increasingly fearing popular outbursts against the government and in a desperate attempt to control the crisis, he has recently declared a nationwide state of emergency.

The growing unrest has been building for some time and has led opposition parties to gain more seats in the National Assembly. There is also growing support for a recall election and a referendum to impeach President Maduro. However, the opposition is not organized in a cohesive unit against the Maduro government.

The situation has now deteriorated to the point where there is concern regarding “plausible scenarios” where Maduro’s own party or a military coup would force him out of office—triggering further civilian uprising and possibly the outbreak of a civil war.

Even though there have been gradual increases in oil prices over the past months, Venezuela has had to slow down production due to rampant power outages, failing to take full advantage of the market’s improvement. No matter the outcome of the referendum, Venezuela is heading towards bankruptcy and chaos. Hugo Chavez’s dream is turning into a nightmare for the Venezuelan people.