Crisis in Venezuela

The situation is believed to be by far the worst economic crisis in Venezuela's history, and is also the worst facing a country in peacetime since the mid-20th century. The crisis is often considered to be more severe than that of the United States during the Great Depression, the 1985–1994 Brazilian economic crisis, or the 2008–2009 hyperinflation in Zimbabwe.^[8] Other writers have also compared aspects of the crisis, such as unemployment and GDP contraction, to that of Bosnia and Herzegovina after the 1992–1995 Bosnian War, and those in Russia, Cuba and Albania following the collapse of the Eastern Bloc in 1989 and the dissolution of the Soviet Union in 1991.^[9][10]


On 2 June 2010, Chávez declared an "economic war" due to increasing shortages in Venezuela. The crisis intensified under the Maduro government, growing more severe as a result of low oil prices in early 2015,^[11] and a drop in Venezuela's oil production from lack of maintenance and investment.^[12] In January 2016, the opposition-led National Assembly declared a "health humanitarian crisis".^[13] The government failed to cut spending in the face of falling oil revenues, and has dealt with the crisis by denying its existence,^[14] as well as violently repressing opposition.^[12][15] Extrajudicial killings by the Venezuelan government became common, with the United Nations (UN) reporting 5,287 killings by the Special Action Forces in 2017, with at least another 1,569 killings recorded in the first six months of 2019, stating that some of the killings were "done as a reprisal for [the victims'] participation in anti-government demonstrations."^[16] Political corruption, chronic shortages of food and medicine, closure of businesses, unemployment, deterioration of productivity, authoritarianism, human rights violations, gross economic mismanagement and high dependence on oil have also contributed to the worsening crisis.^[17][18]


As a response to human rights abuses, the degradation in the rule of law, and corruption, the European Union, the Lima Group, the United States and other countries have applied individual sanctions against government officials and members of both the military and security forces.^[19] The United States would later extend its sanctions to the petroleum sector. Supporters of Chávez and Maduro said that the problems result from an "economic war" on Venezuela,^[20] falling oil prices, international sanctions,^[21] and the country's business elite, while critics of the government say the cause is years of economic mismanagement and corruption.^[22] Most observers cite anti-democratic governance,^[23][24] corruption,^[17][25] and mismanagement of the economy as causes of the crisis.^[18][26] Others attribute the crisis to the "socialist",^{[27][28][29][30]} "populist",^{[31][32][33][34]} or "hyper-populist" nature of the government's policies,^[35] and the use of these policies to maintain political power.^[36][37][38] National and international analysts and economists stated that the crisis is not the result of a conflict, natural disaster, or sanctions, but rather of the consequences of populist policies and corrupt practices that began under the Chávez administration's Bolivarian Revolution and continued under the Maduro administration.^[39][40]


The crisis has affected the life of the average Venezuelan on all levels. By 2017, hunger had escalated to the point where almost seventy-five percent of the population had lost an average of over 8 kg (over 19 lbs) in weight^[a] and more than half did not have enough income to meet their basic food needs.^[42] A UN report estimated in March 2019 that 94% of Venezuelans lived in poverty,^[43][44] and by 2021 almost twenty percent of Venezuelans (5.4 million) had left their country.^[45][46] The UN analysis estimates in 2019 that 25% of Venezuelans need some form of humanitarian assistance. Venezuela led the world in murder rates, with 81.4 per 100,000 people killed in 2018, making it the third most violent country in the world.^[47] Following increased international sanctions throughout 2019, the Maduro government abandoned policies established by Chávez such as price and currency controls, which resulted in the country seeing a temporary rebound from economic decline before COVID-19 entered Venezuela the following year.^[48][49] As a response to the devaluation of the official bolívar currency, by 2019 the population increasingly started relying on US dollars for transactions.^[50]


According to the national Living Conditions Survey (ENCOVI), by 2021 94.5% of the population was living in poverty based on income, out of which 76.6% lived under extreme poverty, the highest figure ever recorded in the country.^[51] In 2022, after the implementation of mild economic liberalization, poverty decreased in Venezuela and the country's economy grew for the first time in eight years. Despite these improvements, Venezuela continues to have the highest rate of inequality in the Americas. Although food shortages and hyperinflation have largely ended, inflation remains high in Venezuela.^[52]