Venezuela was once the richest country in
Latin America. It has the largest known oil reserves in the
world. And its democratic government was once praised
world wide. But today, Venezuela’s democratic institutions
and its economy are in shambles. The country has the highest inflation in the
world, making food and medicine inaccessible to most Venezuelans. Over the last four years, its GDP has fallen
35%, which is a sharper drop than the one seen during the Great Depression in the US. The country’s murder rate has surpassed
that of the most dangerous cities in the world. These conditions have sparked months of protests
against the president, Nicolas Maduro. And it’s easy to see why: the country has
become measurably worse since his election in 2013. A poll showed that about 80% of Venezuelans
want Maduro removed from office. But instead, the opposite has happened: Maduro
has consolidated his power bringing the country closer to authoritarian rule. Maduro’s political ambition became evident
in December 2015. Two years after he became president, a coalition
of opposition parties called the Democratic Unity Roundtable or MUD, won a two-thirds
majority in the National Assembly, putting Maduro’s rule at risk. In response, Maduro quickly forced out several
Supreme Court justices and filled the positions with cronies loyal to him. In March 2016, the court ruled to strip the
opposition-led National Assembly of its powers -- a move that sparked massive protests across
the country. The ruling was reversed a few days later,
but the damage was done -- protests continued to grow and have left about 100 dead and thousands
injured so far. Despite the violence and public outcry, Maduro
held a vote in July to elect a new governing body called the National Constituent Assembly,
which would have the power to rewrite Venezuela’s constitution and replace the National Assembly. And leave virtually non opposition to Maduro's rule. With Maduro's recent vote, Venezuelans didn’t have
a say in whether the assembly should exist. They only had the option to elect its members. But when Maduro’s predecessor, Hugo Chavez
proposed a constitutional rewrite in 1999, he first called for a referendum to propose
the election of the assembly. After most Venezuelans voted yes, they elected
a new National Constituent Assembly. See, unlike Maduro, Chavez was a charismatic
and beloved leader. In the 90s, he burst onto television sets
across the country. He blamed government corruption and Venezuela’s
elite for the economic inequality. His populist message resonated with the country’s
poor who eventually helped bring him to power. The key moment in his presidency came in 2004 when oil prices surged. Venezuela’s petroleum- dependent economy started booming and Chavez went on to spend billions from the profits on social-welfare programs for the poor. He subsidized food, improved the educational
system, built an enviable healthcare system and reduced poverty by more than half. These programs certainly helped the poor, but they served a purpose for Chavez as well. In order to be re-elected, he needed to keep
millions of poor Venezuelans happy. So he rigged the economy to do just that... He didn’t scale back Venezuela’s dependence
on oil and his unrestrained spending led to a growing deficit. Which meant all these programs would be impossible
to sustain if oil prices fell. After Chavez’s death, when Maduro took office
as his handpicked successor, that’s exactly what happened:
Oil prices plummeted in 2014 and Maduro failed to adjust. Hyperinflation has made medicines and food,
that was once subsidized, unaffordable for Venezuela’s poor, who now make up about
82% of the population. Like Chavez, Maduro has also rigged the economy
to keep himself in power, but this time it’s not benefitting the poor.
He’s exploited a complex currency system, put in place by Chavez. Maduro’s set the official exchange rate
at 10 bolivars per US dollar. But only his friends and allies have access
to this rate. In reality, the venezuelan currency has become
basically worthless. Most Venezuelans get their dollars on the
black market, where the rate is about 12,000 bolivar per dollar. The military, which got complete control of
the food supply from Maduro in 2016, is reportedly profiting off of this currency crisis. They import food at Maduro’s special currency
rate and sell it on the black market for a massive profit. So military generals and political allies,
crisis has offered a lucrative opportunity which has helped Maduro stay in power. But he can’t rely on that support alone... ...which brings us back to Maduro’s recent
power grab. The opposition boycotted the vote, but Maduro
held the vote for the new constitutional assembly anyway, and won a majority. "Protests on the streets of Venezuela turned deadly after President Nicolas Maduro declares victory. The violence on Sunday very real The bomb went off near some motorcycle police wounding several. Election day clashes between protesters claiming at least 10 more lives. At least one candidate has been murdered, shot to death. Maduro's government is trying to create the illusion of public support. Thegovernment claimed about 8 million people,
or 40% of the country, voted. But experts put that number much lower, at
just 3 million people. The international community including Peru,
Canada, Spain, Mexico and Argentina condemned the election. The US imposed financial sanctions on Maduro
and members of his government. But Maduro’s assembly, filled with loyalists,
convened anyway and it swiftly removed attorney general Luisa Ortega, leader of the opposition. Armed groups reportedly arrested several other
opposition leaders too. Whether the group will rewrite the constitution
or postpone the next presidential election remains to be seen. For now, Maduro has unprecedented power over
a country that continues to spiral out of control.
Not mentioned in the video but also super important: price controls, currency controls, and appropriation/nationalizations of businesses (or all of their assets in Venezuela). In regard to nationalizations it wouldn't matter how much time Chavez invested in other industries if foreign investors and skilled business leaders were getting out of dodge as fast as possible.
One of these things this video does that I appreciate is mention how the problems started with Chavez. A popular canard among socialists and those amenable to them are that price controls, currency controls, and/or overspending, only started with Maduro. This in incorrect.
Military intervention in Venezuela when?