Venezuela has more oil than Saudi Arabia and more poverty than Colombia. Once one of Latin America’s richest countries, it’s now plagued with shortages of everything from toilet paper to antibiotics and food. It’s been a steep downward spiral since the heady days when the late President Hugo Chavez set out to use an oil boom to light a socialist path to prosperity, not just for the poor in Venezuela but across Latin America. Chavez died in 2013, about a year before oil prices fell sharply. His protégé and successor, Nicholas Maduro, has tightened his grip on power as opponents complain of economic mismanagement, corruption and political oppression. Critics inside and outside the country hope for Maduro’s departure but no solution has emerged that would protect Venezuela’s 30 million people from further harm.
The Situation
Maduro, 55, overwhelmingly won a new six-year term in a May 20 election widely seen as a charade. U.S. Vice President Mike Pence called it a "sham." Most of the opposition either boycotted the contest or were barred from entering it. Many Venezuelans didn't bother to vote: The electoral authority said turnout was 48 percent, the lowest in two decades. Hundreds of thousands have fled to nearby countries in response to a violent crackdown on street protests, the lack of jobs and the inability to feed their families. In 2017, one aid agency said more than 11 percent of children under age 5 were suffering from moderate to severe malnutrition, yet Maduro has rejected humanitarian aid. Oil output has plunged to 1940s levels, partly for lack of money for maintenance but also because famished workers have grown too weak for heavy labor. Late last year, Venezuela defaulted on a portion of its debt. That included the $3 billion in so-called hunger bonds that Goldman Sachs Group Inc. bought at a deep discount, leading to criticism it was helping finance a regime that prioritized paying bondholders over feeding starving Venezuelans. Creditors have begun seizing the assets of the state oil company. The U.S. and European Union have imposed sanctions against the country for human-rights abuses, political repression and graft. Early this year, Venezuela introduced the world’s first state-issued cryptocurrency, the Petro. The U.S. called it a scam and promptly forbade Americans from purchasing it. While Venezuela no longer publishes basic statistics, the International Monetary Fund estimated that inflation exceeded 2,400 percent in 2017 and would zoom higher in 2018. In a ranking of countries by corruption level, the non-profit group Transparency International puts Venezuela at number 169 out of 180 nations.
https://www.bloomberg.com/quicktake/venezuela-price-revolution
The Situation
Maduro, 55, overwhelmingly won a new six-year term in a May 20 election widely seen as a charade. U.S. Vice President Mike Pence called it a "sham." Most of the opposition either boycotted the contest or were barred from entering it. Many Venezuelans didn't bother to vote: The electoral authority said turnout was 48 percent, the lowest in two decades. Hundreds of thousands have fled to nearby countries in response to a violent crackdown on street protests, the lack of jobs and the inability to feed their families. In 2017, one aid agency said more than 11 percent of children under age 5 were suffering from moderate to severe malnutrition, yet Maduro has rejected humanitarian aid. Oil output has plunged to 1940s levels, partly for lack of money for maintenance but also because famished workers have grown too weak for heavy labor. Late last year, Venezuela defaulted on a portion of its debt. That included the $3 billion in so-called hunger bonds that Goldman Sachs Group Inc. bought at a deep discount, leading to criticism it was helping finance a regime that prioritized paying bondholders over feeding starving Venezuelans. Creditors have begun seizing the assets of the state oil company. The U.S. and European Union have imposed sanctions against the country for human-rights abuses, political repression and graft. Early this year, Venezuela introduced the world’s first state-issued cryptocurrency, the Petro. The U.S. called it a scam and promptly forbade Americans from purchasing it. While Venezuela no longer publishes basic statistics, the International Monetary Fund estimated that inflation exceeded 2,400 percent in 2017 and would zoom higher in 2018. In a ranking of countries by corruption level, the non-profit group Transparency International puts Venezuela at number 169 out of 180 nations.
https://www.bloomberg.com/quicktake/venezuela-price-revolution
