From riches to rags: Venezuela's economic crisis | The Big Picture
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Published 2018-02-14
"Venezuelans today cannot eat. You see people eating from the garbage," says Professor Margarita Lopez Maya, Central University of Venezuela.
So how does a country boasting the world's largest oil reserves find itself on the brink of economic ruin?
It's the country's very history that sheds light on what has gone so drastically wrong in Venezuela today.
When Hugo Chavez was elected president in December 1998, he promised to tackle corruption and poverty.
He used Venezuela's rapidly growing oil wealth to set up social programmes, known as the Misiones, with the aim of eradicating poverty and reducing inequality. It was, many claimed, a much-needed intervention in the entrenched disparity between Venezuela's rich and poor.
As Chavez strived to transform the nation with what he called 21st century socialism, his populist policies began to take a more radical turn. He nationalised industries and bloated state bureaucracy at great national expense, all funded by high oil prices and unchecked borrowing. Venezuela became saddled with record-high levels of debt.
By the time of his death in March 2013, Chavez handed over both the reins of power to his handpicked successor, Nicolas Maduro, as well as the poisoned chalice of an economy about to implode.
"Maduro has inherited a legacy of oil dependence at a period when Venezuela has gone bust, and at a time where the oil price has gone bust," says Professor Julia Buxton, author of The Failure of Political Reform in Venezuela, adding that Maduro "has simply not addressed any of the problems or the legacy that he inherited from President Chavez."
"The collapse of economic activity makes this period, from 2013 onwards, the largest recession in Western Hemisphere history - significantly larger, almost twice as large as the Great Depression of the US," says Ricardo Hausmann, former Venezuelan minister for planning.
The IMF predicts that in 2018, the Venezuelan economy will contract by 15 percent, and inflation will reach 13,000 percent.
But will those now tasked with governing a struggling nation learn any lessons from its troubled past?
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All Comments (21)
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My heart goes out for the elderly, sick and the children. 😢😔
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I am a Venezuelan living in Venezuela and cay say fairly that this documentary shows the truth of what's happening in our now totally ruined country.
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Man.. watching this makes me realize I take so many things for granted, many of us do..
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That’s not a recession, that’s a depression.
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That's what happens when you borrow your food instead of growing it.
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Back in the 80's, I studied alongside some Venezuelans. Great guys but oh soo arrogant! They claimed to be the Swiss of latinamerica. I remember them looking down on Colombians and Mexicans......sadly, a lot of these cats now live in Colombia and Mexico and wherever else will let them in.
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From the day Fidel met with Chavez I knew Venezuela will end up poor
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He screwed up, big time. No country survives by nationalizing the economy. You have to also accept the fact that private sector is very important in the economy.
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Education is important, before u put democracy inside a country.
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So someone try to tackle poverty by bringing poverty to everyone?
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I was born here, this was the place I called home.I’m so grateful that I got to live there for at least 5 years. My heart gives a bunch of love for all the people that’s struggling. I know the situation there will get better, and I trust on my country
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This is absolutely heartbreaking. My heart goes out to the Venezuelan people. Praying for everyone.
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No matter how bad the economy of a country is, someone there is making it big!
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A perfect example of what communism does to a country and its people -
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This is what may happen to the Philippines if Manny Pacquiao becomes president,he is a great boxer,but he is not a great politician,he even wants to spend government money to create a boxing agency despite of the pandemic.I can see Chavez through him,I hope he doesn't become president.
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Don't lose hope try to grow your own food ,dairy,clothing and save some money for your future. Learn from Japan's history
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And in the end the Chinese will buy all of Venezuela for a bargain.
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I still love it how many students in the US still strongly advocate for socialism. even though they have so many examples of why not to do it.
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Sorry if this is a dumb question, but why hasn't this happened to Saudi Arabia, UAE and all those other oil rich middle East countries. They get their wealth from oil.
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I pray for venzulaua from kenya
