How Venezuela was Destroyed

venezuela today known for their arapah guitars and beauty oh yeah and also for their cripplingly awful economy civil violence and mass exodus outside the nation today venezuela is not doing so good by most metrics the average venezuelan is poor with around 85 percent of the country living in poverty and hyperinflation has ruined their currency with the people using bills as anything but money almost half the country is unemployed it's the third worst country to do business in and is ranked the highest on the misery index throughout the last decade but venezuela used to be one of the richest countries on earth in the 70s it had one of the highest gdp per capita on the planet so what went wrong or more realistically was that just a fluke and was venezuela always poor this is the story of the venezuelan downfall in 1492 columbus sailed the ocean blue what he found was a bunch of land virgin land one might say and i mean a lot of it he may have not realized it but he just discovered a new world full of opportunity also at the same time the spanish conquistadors had just finished up fighting the muslims off of their peninsula back into africa the spanish were a little angsty on edge and religiously motivated during this time they had banned muslims jews and heretics from their country and decided to take over other people's land why not take over this massive continent full of natives who haven't found jesus yet said spain and so they did the spanish sailed over to the americas colonizing it for gold glory and god their main objective was to take as much gold as possible from this land without having to do much work and also convert the natives to christianity the spanish started colonizing this land in northern south america in 1522 the conquistadors acted like kings they would exploit and defeat the natives to subjugate them to their rule they also brought their wealth with them keeping any extra profit from the plantations inside of the wealthiest states creating a spanish ruling class with many races below them the spanish kind of sucked at making equal colonies they brought racial inequality through a racial caste system they made with mestizos mulattos and blacks separated and creoles running the nation and economic inequality through the rich conquistadors focusing on developing themselves rather than the country there is just too much of an incentive to take the wealth for themselves i mean that was the entire reason they just sailed across the ocean in the first place who was the kingdom to stop them but what exactly was this land they were colonizing venezuela is bounded by the guyana highlands of the southeast and the northern mountains in well the north venezuela was always a tropical mountainous country making it extremely hard to develop i mean would you try to build here it did end up making venezuela a pretty safe country if you go by foreign wars venezuela has not been properly invaded since 1829 but as we'll see later that definitely didn't stop violence from finding its way into the nation as a tropical underdeveloped nation which was built on a plantation style economy venezuela pretty much only exported four agricultural goods meat coffee cocoa and cocaine as part of the vice royalty of new granada and parts and new andalusia this agriculture became monopolized by spain the spanish only let them sell their products to spain which worked well for many years as the country was controlled by conquistadors who were pretending to be spanish royalty themselves but by the late 1700s and early 1800s the people and especially elites were getting ideas of freedom from spain the united states of america had just split themselves off from the united kingdom setting a precedent for an independent american state the rich creoles like this idea it's just more power and control for them over the state which they're already running every aspect of in 1811 the first republic of venezuela was declared and venezuela was free from spain wrong spain invaded right after and during the following wars a man named simon bolivar led his own army and declared independence again the second republic of venezuela was declared and venezuela was free wrong in 1814 france invaded spain and they attacked venezuela too but after that war in 1817 the third republic of venezuela was declared and now they were finally free well actually they were part of grand columbia but in 1830 they split off and venezuela was now actually free it wasn't all easy though it's estimated that around a quarter to a third of the entire nation's population died during the multiple wars for independence but from the ashes rose a new venezuela one which would get rid of that colonial oppressive system which just kept the slaves and plantation workers down now instead of that system they would have cardios in charge basically dictators who used power for their own personal gain the power structure in venezuela never changed post-independence with dictators running the country like a king in power from 1830 to 1935 some were jose paez antonio blanco and juan gomez post-independence life in venezuela was hard people were poor focusing mostly on sustenance agriculture a civil war had killed hundreds of thousands of citizens and all for an elite taking their hard-earned production but all this was about to change when venezuela discovered something amazing they dug underground and struck gold black gold venezuela had just found oil in the early 1900s the discovery of oil brought a huge change to venezuela the nation stopped its heavy reliance on agriculture and shifted to a much healthier heavy reliance on petroleum venezuela decided to become a petrol state instead of a narco state they had their first taste of riches when during world war 1 european powers and the us needed oil to make guns and shoot each other and run each other over with tanks oil production was booming and it continued throughout the 1920s when the u.s decided cars were cool and they were going to drive them absolutely everywhere by the time juan gomez died in 1935 venezuela had the highest per capita income in all of latin america but during this gomez production boom it was not all nice gomez was just a little bit corrupt and had used some of the new income to centralize his authority over the state giving his allies and cronies some of the revenue for more power they also suffered from dutch disease since experts boomed the venezuelan boulevard had become much stronger in value from the extra foreign investment into that country but that foreign investment was almost always into oil production and a stronger currency meant that other sectors of their economy were less attractive to import so they ended up declining it resulted in 91 of their exports being some type of petroleum product they had also neglected industrializing during this time except for the oil sector instead of diverting its resources into the other sectors of the economy like manufacturing and agriculture venezuela pumped it all into oil they're a fully corrupt nation by the 1930s with an elite overseeing the oil production and never having developed proper institutions that guarantee that new wealth would go to something useful for the majority of the people much of the wealth went overseas too with plenty foreign companies coming in since venezuela lacked the capital to set up drilling and refining centers of their own it ended up with three companies shell gulf oil and standard oil owning 98 of the venezuelan oil market in the 1930s but the government didn't like that they wanted the oil wealth to go towards their own pockets i mean the country so in 1943 during another world war oil boom they signed the hydrocarbon law all foreign companies were forced to give 50 of their profits to the venezuelan government and the government would promise to protect their drilling and business rates government revenue increased by six times and they had used the new revenue to sow the oil investing into agriculture but it ended up failing after the other oil boom in the 50s life was good an extremely high growth rate spiked venezuela into a per capita income that of ireland or west germany now the fourth highest on earth and as a rich nation it's time to ditch those corrupt leaders taking the people's wealth it was time for democracy sure after 1935 there were regular elections held but coups and rigging were extremely common after a coup regime ended in 1958 the three major parties of venezuela signed the punto fijo act to share power and distribute oil revenue based on how many seats they get in each election it changed a couple of things with venezuela's power structure there were real elections held out but only between three parties that were clearly working together and it also caused a rise in left-wing guerrilla groups fighting for their own control since venezuela's major socialist party was left out of this agreement it also changed a couple of things for the economy this democracy along with high oil profits kept venezuela throughout the 60s and early 70s rich they'd used the revenue to increase public spending such as healthcare education transportation and subsidies in 1960 venezuela joined opec to control the price of oil if anything bad ever happened and it did in 1973 when during a usual israeli-palestinian war opec boycotted selling oil to western nations oil spiked and venezuela was booming maybe a little too much though since the extra inflow of foreign money brought a boom in inflation and debt at the same time carlos perez came to power he reinstated so the oil policies price controls and most importantly nationalized the oil industry in 1976 well more like 60 percent of it since the state company could partner with foreign companies as long as they own 60 equity oil prices were at the highest they'd ever been in in 1979 at that point it seemed like they were only going to go up a very healthy thing to structure your entire government revenue stream into with about 60 of the government's income coming from oil surprise prices went down when they did the venezuelan government failed to keep the economy in control growth decreased inflation and debt were out of control they could no longer fund most of the government services or producer subsidies they had promised but continued to do so since getting rid of all of them at once would likely meant a civil war boy was the government shocked when that almost happened anyways during caracazo these were protests riots and violence about the awful economic situation they were in and corruption in the nation during this time a man named hugo chavez had attempted two coups on the government but no big deal they happened all the time what was important though was when he stopped trying to coup and he ran his own party called movement for the fifth republic hugo was anti-elite he was populist he was socialist and he was determined to make a change in venezuela these anti-corruption protests likely happened not because of the excess amount of corruption in venezuela no the people were fine with that as long as they were getting paid the protests happened because they had stopped getting that sweet sweet oil money turning venezuela into prime real estate for an anti-elite anti-inequality rhetoric hugo chavez was elected in 1998 starting his bolivarian revolution the battle against the elites just ended up turning into his own guys becoming the new elites and himself becoming the new dictator he kept the oil-based government revenue strategy this time with more chavismo flair and along with rising prices it seemed like venezuela was more dependent on oil than ever he promised populist programs such as cutting poverty by 20 nationalization of almost everything and lots of social welfare since they didn't learn their lesson about having government revenue directly linked to oil prices venezuela experienced many booms and recessions in the 2000s shaking venezuela up more making it even more unstable to live in one of these shaky events was in 2002 the state oil company the pdvsa went on strike during the winter of 2002-2003 the sudden drop in exports weakened the boulevard and when around 40 percent of the company was fired or more realistically ousted in a political purge it caused a sharp drop in output and their oil production has never ever recovered since in 2003 venezuela also suspended much of their foreign trade and controlled their currency's exchange value for the first time in its history venezuela was unable to meet supply contracts of petroleum to the international world but at the same time just after this incident they started the petrocadi program to provide subsidized oil to cuba and caribbean countries with the same values gotta help the socialist brothers outright even if that means running out of oil to sell and doubling your foreign debt between 2005 and 2013. chavez was so for the people that he got rid of the corrupt elite supreme court and ending term limits term limits did not stop him from dying though when he died in 2013 it paved the way for a new man to step in his dictator nicolas maggioro by 2013 venezuela had already fallen pretty hard economically but when oil prices collapsed in 2014 venezuela still had to keep their government programs without any revenue so they printed money and went into full crisis mode this is the modern venezuela we're used to hearing about now severe hyperinflation and nationwide shortages of basic goods leading to malnutrition poverty and protest across the nation the hyperinflation was so bad that money and savings practically disappeared over the year the venezuelans had no more hard currency the idea that your bill will buy the same amount of goods as another bill or throughout time many foreign companies slow down production in the country or just straight up left the government to make up some lost profits took more from the pd vsa leading to less reinvestment into their sole source of income with oil production slowing from over 2 million barrels a day to less than half a million in four years and they started printing money like never before seen it's hard to know the exact inflation rate but some estimates are between 25 000 and 448 000 in 2017 and over 1 million in 2018. simply put the venezuelan boulevard was now completely worthless it has given the venezuelans a warp sense of money with people choosing to hoard goods and opening up a black market for the people it was just one disaster after another from 2013 to today along with a presidential crisis that may or may not turn into a civil war the future is sure looking unstable for venezuela those are some of the reasons why around 1 in every 10 venezuelans around 3 million people total has packed up and left the nation they're impoverished it's turning more and more violent and there's a lack of basic goods in the nation oh dios mio it's a tragic tale because venezuela is a great country with a vibrant culture and tons of natural beauty so at what point was the nation doomed from the start of colonization no since all these other spanish colonies are poor by world standards but not nearly as bad as venezuela was it by finding oil and nationalizing it not necessarily there are many nations who have made it work and have ended up quite wealthy because of their oil revenue was it because of hugo and the chavismo ways well let's be honest chavez was elected because the venezuelans were poor his policy certainly didn't help the nation become richer but he definitely didn't cause the root issues of venezuela no it's more of a mix of the first two reasons venezuela was cursed by finding oil before they developed democratic pluralistic institutions they used the power structures of the plantation-based conquistadors evolving it into the caudillo system with a small elite controlling most of the land during their flirting with democracy and socialism this structure didn't go anywhere it just shifted which name venezuela had and which people benefited from the oil revenue because they focused so heavily on oil production they couldn't diversify their attempts at selling agriculture and industry in the nation failed and the government promised oil revenue that sometimes just did not come they could not have made a sovereign wealth fund like other richer countries have because venezuela was too corrupt there is too much of an incentive to use this wealth fund for the rulers as personal gains so it was never made the politicians just did not trust each other enough in the nation there's no way they would have made a multi-billion dollar fund just sitting around in the government so the oil revenue went directly into government spending making it fluctuate much more than any other government's causing the instability we see today in venezuela if there's any nation which gives evidence to the resource curse it's venezuela venezuela is a country that struck black gold and it cursed them to live a life of poverty and misery

Channel: hoser

Views: 1,392,305

Keywords: chavismo, economics, economy, geography, geopolitics, h0ser, history, history of venezuela, hoser, hugo chavez, pdvsa, spanish empire, venezuela, venezuela colonization, venezuela country, venezuela crisis, venezuela economics, venezuela economy, venezuela geography, venezuela oil, venezuelan, venezuelan history, venezuelan women

Id: TuoJhtd71fk

Length: 16min 28sec (988 seconds)

Published: Fri Aug 26 2022