Venezuela: An Overview

Published: January 10, 2019 | By Harry Chenevix-Trench

This is an op-ed written by Harry Chenevix-Trench, who is a former EISF volunteer.

 

Venezuela, despite vast oil wealth and an educated population, is suffering from one of the worst humanitarian crises in Latin America today. A combination of massive inflation rates, widespread shortages of goods, a spiralling crime rate and a deteriorating security situation have caused almost 5% of Venezuela’s population to seek refuge in neighbouring countries.

In January 2016, Caracas became the most violent city in the world with a murder rate of 120 homicides per 100,000 people[i]. In August 2018, to combat hyperinflation the government announced a 3000% wage increase along with a currency re-evaluation, in the hopes of preventing the flight of economic refugees and stabilising the currency. Despite this, the rate of inflation is expected to reach 1,000,000% this year[ii] and shortages of basic foodstuffs and medicine are common. The situation is only made worse by the near refusal of Venezuela’s government to admit that a crisis is occurring or to allow non-governmental organisations (NGOs) to commence operations.

The economy

IMF data states that inflation within Venezuela will likely reach 1,000,000% in the next year[iii] and the origins of the crisis only serve to worsen the future of the situation. A brief summary of these origins would be a toxic combination of corruption, mismanagement, low oil prices, an ageing infrastructure and widespread government refusal to change in the face of catastrophe.

Food shortages within Venezuela are common and the average Venezuelan has lost approximately nine kilograms in weight due to malnutrition. Government assistance exists in the form of food packages (known by their Spanish Acronym ‘CLAP’) which are intended to feed a family for one month (although they seldom do). Such assistance is infrequent, and hungry Venezuelans have taken to attacking trucks thought to hold CLAP packages.[iv]

As of the 26 November 2018, Venezuela had accepted $9 Million of United Nations (UN) aid, but the damage to the nation has already occurred.[v] Venezuela is a country heavily dependent on imports but is now unable to import anything. The country is currently saddled with debt but is unable to sell off national industries or default. The government has taken some creative steps to try to mitigate the damage, such as a tax holiday for importers, and the creation of the ‘petro’ cryptocurrency (which has been widely derided as a scam by market insiders[vi]). All of these initiatives, however, fail to address the root economic causes of the problems facing the nation – namely, mismanagement and corruption.

Healthcare and shortages

Attempting to find any reliable statistics pertaining to the state of the Venezuelan healthcare system is difficult, which may be linked to the Venezuelan government’s reported continuous suppression and punishment of those who release ‘embarrassing’ data.

In May 2017, then Health Minister Antonieta Caporale was fired after her department released statistics revealing that there had been a 65% rise in women dying in childbirth and that child mortality had risen by 30% in the past year.[vii] Recent investigations conducted by IRIN News in 2018 revealed a grim picture of hospital pharmacies devoid of medicine, suffering patients and filthy hallways. According to opposition groups in Venezuela, 8 out of 10 government-managed pharmacies are lacking essential medicine that should be widely available.[viii] Within Venezuela, patients are dying because widely existent means of treatment are no longer available.

Although there are contributing factors, the economic fallout of Chavista policies can be seen as the primary cause of the healthcare shortage. This is because Venezuela is heavily reliant upon imports of both pharmaceutical goods and medical equipment to treat the population[ix]. Before the crisis, Venezuela was slowly growing a domestic pharmaceutical industry, and from 2009 – 2012 the compound annual growth of Venezuelan pharmaceuticals was 14.1%. This is no longer the case since a combination of state collapse, hyperinflation and inefficient patent laws have contributed to the eradication of the industry. The medical instrument market, also a key part of healthcare infrastructure, has suffered the same fate.[x]

As there is no way to manufacture drugs or equipment at home and few means to buy them abroad, the population is forced to rely on charity, leftover medicines, or pay exorbitant sums to an unreliable black market.

The security situation

State bankruptcy will inevitably affect every aspect of the state itself, and Venezuela’s security situation is no exception. The nation sits within a major drug trafficking route, with cocaine moving from Colombia through Venezuela and on into Mexico, (or else being exported via the coast to the US and Europe). States with strong governments and civil institutions would struggle to contend with the scale of the challenge, and due to its lack of resources, the situation is worse still for Venezuela.

Venezuela is home to a plethora of criminal groups, most of them violent. These range from former revolutionary groups turned narco-gangs such as the Revolutionary Armed Forces of Colombia (FARC), to various Bandas Criminales (BACRIM) who have their roots in former Colombian paramilitaries. Within the prison system, gang-bosses, known as pranes, reportedly control whole facilities and have become so powerful and well-equipped that the government is forced to negotiate with them rather than fight them. Within cities such as Caracas, there are concerns that the government may be sponsoring revolutionary groups known as colectivos that extort whole districts. Though reportedly legitimised by the government, these groups appear to be ultimately accountable to no one and have quickly devolved into semi-sponsored criminal groups.[xi] Behind these issues, within the government, there are reports of graft, corruption, and mismanagement, that stifle attempts at reform and prevent attempts at moving forward. There are concerns that even groups within the national army appear to have become an informal cartel of sorts in the wake of the crisis, and these groups are now known as the ‘Cartel of the Suns’ (named after the badges that adorn the shoulders of Venezuelan army colonels).[xii]

The position of NGOs in Venezuela

Venezuela has refused various requests to deliver aid by a number of international groups, likely since accepting help would constitute both a loss of face and an admission of weakness. The recent acceptance of $9 Million of UN aid is an important start, but there remain huge challenges for aid agencies to address if they will be allowed to operate freely within the country.

There are also rumours that international NGOs are providing funds for national NGOs within Venezuela, but since the government reaction to this would be one of hostility, the full extent of foreign aid within the country is unknown. At present, the United Nations High Commissioner for Refugees (UNHCR)’s relief map of Venezuela shows only three groups operating in the country.[xiii]

As a consequence, NGOs have had to be reactive rather than preventative and principally focus on assisting Venezuelans as they come to the borders of Brazil, Colombia, and Ecuador. In April 2018, the Brazilian government stated that over 800 Venezuelans were entering the country per day.[xiv] In August 2018, Ecuador declared a state of emergency as more than 500,000 Venezuelans entered the country via the Colombian border.[xv] The plight of Venezuelan refugees also places a huge strain on neighbouring states that are often underequipped to support them, leaving those who flee Venezuela at the mercy of predatory criminal groups.

 

References

[i] Caracas Venezuela la ciudad mas-violenta del mundo del 2015, seguridadjusticiaypaz.org, 4 March 2016, https://www.seguridadjusticiaypaz.org.mx/sala-de-prensa/1356-caracas-venezuela-la-ciudad-mas-violenta-del-mundo-del-2015

[ii] Happy first anniversary hyperinflation, when will you go away?, Caracas Chronicles, 16 November 2018 – https://www.caracaschronicles.com/2018/11/16/happy-first-anniversary-hyperinflation-when-will-you-go-away/

[iii] More Money, More Problems: Why Venezuela’s New Currency Is Unlikely to Curb Its Hyperinflation, Fortune.com, 22 August 2018, http://fortune.com/2018/08/22/venezuela-redenomination-sovereign-bolivar/

[iv] Hunger and Survival in Venezuela, IRIN News, 21 November 2018,  https://www.irinnews.org/special-report/2018/11/21/hunger-and-survival-venezuela

[v] Venezuela to receive UN emergency aid for the first time, IRIN News, 26 November 2018, http://www.irinnews.org/news/2018/11/26/venezuela-receive-emergency-un-aid-first-time

[vi] Petro deemed a scam by rating sites, Cryptonews, 4 April 2018 https://cryptonews.com/news/petro-deemed-a-scam-by-rating-sites-1506.htm

[vii] Venezuela health minister fired over mortality stats, BBC News, 12 May 2017, https://www.bbc.co.uk/news/world-latin-america-39896048

[viii] Encuesta nacional de hospitales concluyó: “88% de escasez de medicamentos, 79% escasez de mmq y 84% de escasez de catéter”, Punto de Corte, 19 March 2019, http://puntodecorte.com/an-realizo-encuesta-nacional-de-hospitales-y-aqui-estan-los-resultados/

[ix] Venezuela’s emerging pharmaceutical markets threatened by economic and political turmoil, Global Data, 2 November 2017, https://www.globaldata.com/venezuelas-emerging-pharmaceutical-markets-threatened-economic-political-turmoil/

[x] Venezuela $5 Billion In Debt To Pharmaceutical Companies Offers Gold, Diamonds For Medicine, International Business Times, 1 April 2018, https://www.ibtimes.com/venezuela-5-billion-debt-pharmaceutical-companies-offers-gold-diamonds-medicine-2637301

[xi] The Devolution of State Power: The ‘Colectivos’, Insight Crime, 17 May 2017, https://www.insightcrime.org/investigations/devolution-state-power-colectivos/

[xii] Cartel of the Sun News, Insight Crime, 10 January 2019, https://www.insightcrime.org/venezuela-organized-crime-news/cartel-de-los-soles/

[xiii] UNHCR Aid Maps, 14 December 2018 http://www.unhcr.org/withrefugees/map-location/relief-venezuela-ngo-aid-map/?mpfy-pin=4130

[xiv] Response stepped up in Brazil as Venezuelan arrivals grow, UNHCR, 6 April 2018, http://www.unhcr.org/uk/news/briefing/2018/4/5ac72f194/response-stepped-brazil-venezuelan-arrivals-grow.html

[xv] UNHCR ramps up response as Ecuador declares emergency, UNHCR, 10 August 2018, https://www.unhcr.org/uk/news/briefing/2018/8/5b6d4f554/unhcr-ramps-response-ecuador-declares-emergency.html