For a significant time now, Venezuela has been staggering on the periphery of political and economic misfortune. As an OPEC member, Venezuela is endowed with the largest oil reserves in the globe, but the country is striving to fight unending political, security, as well as financial issues. The oil industry has transformed social, cultural, and economic activities in Venezuela, as the country rely on oil revenue for its operations, but the current form of leadership does not guarantee a better future. As the day’s elapse, the country is moving closer to the political and economic meltdown. For a person visiting Venezuela for the first time, issues such as poverty, energy crisis, price controls, insecurity, and high inflation, are quite transparent, and this demonstrates how bad the situation is for an ordinary Venezuelan citizen.
- Political Economy
The current political, economic, and social condition in Venezuela is quite worrying and problematical, particularly to someone who is interested in understanding the politics of the country. After many years of dependence on oil, almost all sectors in Venezuela have suffered due to external shocks. Venezuela was once a rich country with huge oil reserves that propelled the country into one of the largest oil exporters. According to Tinker (2009), oil industry transformed the country’s economy, as well as social landscape, leading to the clashing of values in the twentieth century.
The connection between oil and democracy as demonstrated in Venezuela has led to the frantic effort to shift the center of power from the state-capitalists, who own oil companies, to the Venezuelan state. Initially, a small group of capitalists controlled the country’s oil resources, thus, restraining the majority from engaging in political and economic debate in the country. Oil accounts for approximately 95% of the country’s export revenue while the state-run oil company, PDVSA, takes control of much of the oil exploration (Renwick, 2016). When Chavez took power in 1999, he utilized oil wealth to mend international relationships and forgot to clear external debts.
It appears that President Maduro was not lucky, as the current economic crisis was a creation of his predecessor, who opted to reward his supporters through generous social welfare and expropriating industries without saving for the future. The decline in oil prices in 2014 led to economic crisis, since the country relies heavily on revenue collected from the export of oil. The country is facing food shortage, low medical supplies, and limited consumer goods. Price controls and limitations on production charges have led to manufacturers restricting their production capacity (Renwick, 2016).
Venezuela is undergoing an economic crisis and is heading towards widespread social disorder, which could consequently create instability throughout Latin America. According to The Washington Post, the highly unpopular socialist government, led by President Nicolas Maduro, has proclaimed electricity rationing, as well as cutbacks on some state work schedules due to collapse of oil prices (McCarthy, 2016). Inflation has become uncontrollable, leading to rise in consumer prices while the currency has persisted in losing its value, as indicated in Figure 1 below. The National Assembly has also declared a national emergency on the country’s health sector, raising more doubts on the country’s future political economic situation.
Figure 1: Venezuela Inflation Rate 2015 (Source: Trade Economics)
- Political Ideology
Political ideology involves application of a particular set of principles, morals, and doctrines to express how society should operate, or how a political movement should transform the current order. A political ideology emphasizes on how power should be allocated among groups that share similar interests. The struggle to promote political ideology as a socialist transformation in Venezuela has encountered considerable political resistance from the opposition
Although Venezuela’s economic behavior can be termed as highly progressive, its political ideology is a letdown due to acceptance of a government system that prefers limited popular participation. While some people are quite comfortable with the Bolivarian Revolution that they claim to have enhanced equality and self-governance, others are criticizing President Maduro’s government for increased corruption, high inflation, as well as poor management of the economy.
When President Chavez took power in 1999, he launched the Bolivarian Revolution, a leftist social movement aimed at popularizing popular democracy, enhanced equal share of resources, and eliminating political corruption in Venezuela. Ellner and Tinker (2006) perceived the Bolivarian Revolution as a process of modifying hegemony through ousting the traditional dominant coalition and leaving the state intact. The Chavez administration carried out the act through civil mobilization, which also incorporated street demonstrations.
Venezuela is endowed with a rich cultural heritage, which incorporates influence from diverse groups of people who reside in the country. Venezuela’s culture was largely influenced by the indigenous people, Spanish migrants, and Africans who became the first settlers in the country. The discovery of oil in Venezuela altered the country’s social, cultural, and economic practices. Before the discovery of oil, most Venezuelan citizens lived in the rural areas and depended on agriculture for their subsistence (Tinker, 2009).
The connection between power and culture has shaped the current lifestyle of Venezuelans owing to the oil industry. The oil industry extensively influenced the development of social and political values as demonstrated by oil workers, intellectuals, as well as the middle class (Tinker, 2009). The residential communities that were initiated by the foreign oil companies to shelter their employees became an essential stage for the cultural, social, and economic transformation following the discovery of oil.
Overreliance on oil has altered the native culture and Venezuelans are now at the mercies of the foreigners. The foreign oil companies promoted Western concepts of management, labor, and time among their employees, with an aim of purging Venezuelans’ negative traits and stereotypes, mostly based on the Latin American culture.
Infrastructure is a valuable component for the development of a country that relies on business activities to run its economy. Appropriate infrastructure enhances communication, transportation, distribution, as well as supply of energy throughout the country. Investment in proper infrastructure is a benefit to society, as well as for economic growth. However, attempts by the Chavez administration to deny the local government power to control public transport infrastructure resulted in inefficiencies in the management of major transport networks in Venezuela.
Venezuela’s roads are in a pathetic situation that the news reports have began to demonstrate new categories of potholes dubbed “the mega-holes.” Although most of the country’s roads are paved, the level of maintenance is extremely low. Drivers have to endure lengthy queues as they strive to evade potholes. Delays and cancellations have been reported in areas where ferries link the offshore islands with the mainland, leading to low earnings from tourists who frequently visit the islands. Fortunately, the southern region relies more on air transport or rivers, thus, enabling its residents to undertake essential business deals.
Venezuela’s railway system is quite small to offer significant means of transport. Although its telecommunication industry is among the fastest growing entities in the country, inadequate access to foreign currency, owing to the exchange control in the country, has made the industry lose its competitiveness in terms of reliance and maintenance. A few projects that seem to thrive are the fruits of bilateral state agreements and soliciting of funds from other South American states. The government has turned down humanitarian assistance from outside, thus, making it hard to overturn the current predicaments.
- Security Threats
The current leadership in Venezuela has been criticized for failing to honor human rights and political dissidents. On March 2015, President Barack Obama, the US passed an executive order that termed Venezuela as a risk to the US national security due to its continuous erosion of human rights, harassment of political dissidents, limitations of press freedoms, forceful detention, and use of violence while handling antigovernment protests (Auken, 2015). The US has contemplated on direct intervention through military means if the Venezuela’s government is not ready to change.
On the flipside, the US was accused of continuously meddling with Venezuela’s affairs through sponsoring coups, and promoting groups that planned violent attack against the elected government. President Maduro reacted to the US threat by increasing militarization in order to enhance his dictatorial powers. The implication of increasingly militarized government is that it would burden the working class as well as the poor as it would only serve the interests of the capitalists who constitute President Maduro’s government (Auken, 2015).
Apart from external security threats, Venezuela has struggled to offer security to its citizens. The rate of murder in Venezuela has escalated, making it among the highest in the world. The Venezuelan Observatory on Violence reported that homicide rate in 2015 was 90 per 100,000 residents (Hutt, 2016). Figure 2 below illustrates the murder rate in Venezuela, as reported by three different groups. Organized crimes and extrajudicial killings by police have made the country vulnerable while allegations of corrupt government officials’ support to narcotic traffickers are a great concern to every citizen.
Figure 2: Venezuela’s murder rate (Source: World Economic Forum)
Venezuela is undergoing a hard economic time due to the fall of oil prices, which consequently denies the country the much-needed revenue to run its sectors. Citizens are suffering from high inflation, inadequate healthcare facilities, limited consumer goods, and internal insecurity. The political situation is quite vulnerable, as the current leadership does not have strong support from the legislature. The situation of Venezuelan infrastructure makes it hard for the country to convince foreign investors to carry out their activities safely and efficiently. Although a boost in oil prices can assist in the government to run some of its sectors, stabilizing Venezuela’s economy is a complex undertaking for any leader.
Auken, B. (2015, March 11). “Obama Brands Venezuela ‘Threat to National Security’.” World Socialist Web Site.
Corrales, J., & Penfold-Becerra, M. (2015). Dragon in the tropics: The legacy of Hugo Chávez.
Washington, D.C.: Brookings Institution Press.
Ellner, S., & Tinker, S. M. (2006). Venezuela: Hugo Chávez and the decline of an “exceptional democracy”. Lanham, Md: Rowman & Littlefield Pub.
Hutt, R. (2016, June 15). Venezuela’s economic crisis: all you need to know in 4 charts. World Economic Forum.
McCarthy, M. (2016, May 18). 6 things you need to know about Venezuela’s political and economic crisis. The Washington Post.
Renwick, D. (2016, July I). Venezuela’s Economic Fractures. Council on Foreign Relations, CFR Backgrounders.
Tinker, S. M. (2009). The enduring legacy: Oil, culture, and society in Venezuela. Durham [NC: Duke University Press.
Venezuela Inflation Rate (2016). Trade Economics.