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Venezuela was the gem of Latin America approximately 40 years ago. It was one of the most modern country of the region in every aspect. The country is a natural beauty with mountains at the noth before reaching to the Atlantic Ocean and jungles at the south having one of the best climates in the world. Venezuela still owns the world’s biggest oil reserves and that means a lot of power in our current energy hungry world. However things do not go well for Venezuelans for the last decade. After serious internal conflicts and serious number of deaths Hugo Chavez ruled the country from 1999 until his death in 2013. During the initial years of his Presidency, the world had the perception that Venezuela was again in good track after so many years. The economy was stable, people were happy and Chaevez was one of the few world leaders who could oppose United States in all of his speeches.

The government was supplying most of the basic goods to the public at very cheap prices and had projects for free homes to the poor citizens. However it has been understood that, this heaven like situation was mainly due to the very high oil prices during that period. That same period helped Russian Federation too and with its vast natural sources Russia also leapt forward with respect to its economy. But Chavez was only giving to the people and in respect was asking too little and the production was very low in Venezuela. People became very lazy thinking that the government shall supply everything they need free of charge.

Good days were over around 2010s. The oil price per barrel began to decline from 150USD per barrel to 30USD and that situation affected Venezuelan economy very heavily. The inflation sky rocketed and reached to unbelievable and unmanagable numbers. Exchange rate was another story it was 5-10 times of the inflation rate during that period. That situation established a big gap between rich and poor. The people who can find dollars and euros became relatively very rich while others have completely lost their purchasing power. Naturally the crime rates went very high and once beautiful and  safe Venezuela became the most dangerous country of the world. Currently there are 15.000 murders per year in Venezuela which is a very high number.

Following the death of Chavez, his long time friend Maduro became the president. The problem with the Maduro was the lack of charisma which Chavez naturally had. Maduro has followed the footsteps of Chavez since 2013 and managed to win several elections although the opposition always claimed that various cheating methods have been used at those elections.

Current economic situation of Venezuela is still terrible. Black market exchange rates are multiple times of the legal rates and finding goods at the shelves are getting very difficult. Although it is still managable, people are in danger of mass starvation. It may happen in a close future.

The solution of the problem is not easy. Opposition wishes more open economy towards US but half of the people see the US as number one enemy of the Venezuela. However it is clear that if current regime changes and a US friendly govenments goes into power, US shall want a big stake from the Venezuelan oil reserves.

Maduro regime is trying to solve the situation by inventing new economic tools and one wishes that with such oil reserves they will success that, otherwise it will be more pain for Venezuelans.


Reinaldo Herrera

February 2018

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