The current financial crisis has been attributed by Maduro to the Venezuelan opposition and foreign actors, including the United States. It is common to hear government officials speak of the “economic war” to refer to the responsibility of the financial difficulties that the country is going through.
The administrations of both Chavez and Maduro decreased productive capacity after promising campaigns that would end poverty in Venezuela. In more than a decade, more than a thousand expropriations of private companies were announced and, when they were handed over to the state, many of them became inoperative over time.
Some of the companies in which the intervention took place are Owens-Illinois, Banco Santander, Exxon Mobil, Sidor, Cemex and Sidetur. These companies, not being able to maintain production independently, have represented the loss of important resources of the state. These nationalizations also influenced small- and medium-sized businesses, which added to the economic downturn.
The high price of a barrel of oil managed for a long time to keep the economy stable and even give the impression of opulence. The problems were temporarily hidden with the import of products and an increase in public spending.
Soon, the population began to notice the shortage in products that used to come directly to them and were to be manufactured in these companies. Other important measures that contributed to the financial situation and low levels of production were exchange control and price control.
The monetary reconversions were made in 2008 and 2018. The first eliminated three zeros to the currency and the second five zeros. These measures were intended to hide the inflation and hyperinflation that was occurring in the country’s economy. The change of the system involved the issuance of a new monetary cone derived from the bolivar, for which an investment was made by the Central Bank of Venezuela for its prompt circulation in the streets.
By 2018, the cash shortage was very pronounced, and the printing of new bills did not change the situation. Currently, practically everything is paid with bank transfers, debit card or dollars, regardless of whether they are large establishments or small wineries in the communities.
Food security
In a few months, the zeros came back in the form of hyperinflation, and this process continued when some faulty measures were implemented. The depreciation of the minimum wage and the high price of the products started to heavily affect the food security of the population.
A year ago, the minimum wage was located at the equivalent of 30 dollars a month; now it is less than 3 dollars or 40 thousand bolivars. At the beginning of August, a person who depended exclusively on this salary or the old-age pension could only buy four basic products such as rice, cornmeal or pasta, which are not enough to fulfil dietary needs for a whole month.
The Maduro regime manages a system to supply the population’s food called “clap”, but despite having more popular prices, it does not have enough products to guarantee the subsistence of a family for a month. In addition, in most communities it does not arrive regularly and others are marginalized from the service.
In some cases, the “country card” is requested for the delivery of the food box or to access other government services. This card is an identification that the regime implemented to control and find out who supported them. In a lot of cases, some of those who request it have done so due to threats in their jobs in public administrations or to be able to have certain benefits, which are denied to the common citizen.
The deterioration of living conditions
The crisis has caused various escalations in poverty levels in Venezuela, as well as a hyperinflation that has suffocated a large part of the population. The economic consequences of the measures taken in the past by Chavez and Maduro, and the aggravated shortage of some commodities, have caused serious repercussions for citizens.
A few years ago, people’s main concern was the shortage of most basic items, due to low national production and import problems. Today, although many of the products can be found, food security is at stake for hyperinflation levels.
According to the International Monetary Fund, inflation exceeded 1,000,000% at the end of 2018. And it is expected that it will reach 10,000,000% by the end of 2019. This led the IMF to exclude Venezuela from the regional average so as not to distort the results.
The increase in poor diet has been noted in the loss of body weight, which is popularly called “the Maduro diet.” In addition, for a couple of years it has become more common to see some people picking up trash or eating directly from it.
According to studies carried out by the main universities of the country through Encovi (Survey on Living Conditions in Venezuela), 64% of citizens have lost 11 kilograms on average, due to difficulties in accessing food for several years.
The shortage of medicines is one of the most marked concerns, as access to health care is restricted. It is also visible in hospitals, where patients’ relatives must go out to look for remedies, gauze and other basic implements throughout the city so they can be treated.
The response of some international organizations has been awaited for a long time. On many occasions, it was argued that it was only a political and non-humanitarian issue. Meanwhile, the situation continued to worsen.
Despite not having responded in months to the call to establish a position on the situation in Venezuela, the United Nations High Commissioner for Human Rights, Michelle Bachelet, after her visit in July 2019, placed Venezuela in a Complex Humanitarian Emergency scenario.
Another issue that has been observed in recent years has been the displacement of Venezuelans outside their borders. Venezuela, a country known for receiving people from all over the world on its land, now manages a high percentage of emigrants. This represents the largest migration the region has seen so far, which amounts to 4 million expatriates according to United Nations figures.
Many of these Venezuelans leave by plane or by bus to different nations but some of them, who do not have the resources, have decided to enter Colombia and continue by foot to Ecuador, Peru, Chile and Argentina. On the way, they receive humanitarian aid from organizations such as the Red Cross and individuals who attend with food, water, clothing or shoes.
Image credit: Toni Rivera