Picture a situation so disastrous it caused the country’s population to plummet by almost 8 million people in just 10 years. While such a statistic seems nearly unimaginable, it is sadly very real and relates to the almost apocalyptic state of decline that Venezuela entered into starting in 2013. At the helm of it all, perched atop a crumbling country and a system that continues to fail its citizens, is Nicolas Maduro—the one-time bus driver turned the most powerful man in what was once one of the wealthiest countries in Latin America, now one of its poorest.
Venezuela has been in the news for its economic woes for a large part of the last decade. Just as it appeared to have faded from view, it was hauled back into the world’s attention in December 2023 when Maduro made wild claims threatening a neighboring country with invasion—a topic we discussed at length at the time. Today, we explore how this all fits together, delving into who Nicolas Maduro is, the recent history of Venezuela, and just how things got so bad.
Nicolas Maduro: From Bus Driver to President
Nicolas Maduro was born into a working-class family with leftist political leanings in the Venezuelan capital of Caracas in 1962. Similar to other prominent leaders we’ve covered, Maduro’s early life is shrouded in some mystery and debate, with speculation that he was actually born in neighboring Colombia, his mother’s home country, one year earlier. This claim is significant because the Venezuelan Constitution requires the president to be a Venezuelan citizen from birth, potentially making Maduro ineligible for the presidency if true.
Maduro was academically mediocre but politically active, becoming a class leader in his high school in his hometown district of El Valle. He didn’t graduate high school and instead became a bus driver, continuing his political activism and eventually becoming a trade union leader for public transport employees in the capital region.
Maduro was drawn to Hugo Chavez, the future president of Venezuela, as the latter made his first foray into political action. Maduro became a member of the Bolivarian Revolution Movement (MBR) in the early 1990s and supported Chavez in his failed coup attempt against the state in 1992. When Chavez eventually became president in 1999, Maduro became a key member of his administration.
During Chavez’s 14 years as president, Maduro occupied several key government positions, becoming president of the National Assembly in 2005 and Minister of Foreign Affairs in 2006, despite having no academic qualifications other than a one-year course in political education received at an institution for aspiring Communists in Cuba in the mid-1980s. Nevertheless, Maduro was seen as having assumed his charge at the helm of Venezuelan diplomacy competently. During his six years as Foreign Minister, he fostered diplomatic relations to strengthen Venezuela’s ties with countries antagonistic to the United States, as well as regional powers in Central and South America, especially those with leftist governments such as Cuba, Bolivia, and Brazil.
This loyalty to Chavez paid dividends, as Maduro assumed the role of Vice President in 2012 before ultimately succeeding Chavez as the President of Venezuela on March 5, 2013. However, while Maduro’s rise to power was marked by a series of rapid successes, his presidency would be met immediately by a stark dose of reality: an economy in freefall, massive instability, hyperinflation, mass emigration, and large-scale protests indicative of a society brought to its knees.
Venezuela’s Economic Catastrophe: A Historical Context
Before examining Maduro’s presidency and the context under which it has unfolded, it’s crucial to understand what led to Venezuela’s economic collapse in the mid-2010s. These decisions were not necessarily Maduro’s or even Chavez’s doing entirely but were the result of a series of decisions made by Venezuelan leaders over practically the length of the 20th century.
The Oil Curse
At the heart of Venezuela’s economic turmoil lies oil—the country’s most valuable resource and largest export. Venezuela discovered vast oil reserves in the early 1900s, which remain the largest proven reserves in the world. According to OPEC, Venezuela has around 303 billion barrels of proven oil reserves, far ahead of Saudi Arabia’s 260 billion barrels. Successive Venezuelan governments capitalized on this oil wealth, making Venezuela a rentier state and a petrostate.
In the 1950s, Venezuela was the fourth richest country in the world by GDP per capita, eclipsed only by the United States, Switzerland, and New Zealand. However, the good times could not last. Oil wealth brought rampant corruption and embezzlement of oil profits by state leaders of practically every political orientation.
Dutch Disease
Venezuela also suffered from Dutch disease, where dependence on a single resource, such as oil, causes other industries to be neglected, increasing the country’s dependence on that resource. The term was coined to describe the decline in Dutch manufacturing following the discovery and exploitation of gas in the Netherlands but was already occurring in Venezuela at that time. Venezuela’s economy became so dependent on oil that it was heavily influenced by global oil price fluctuations.
In the 1970s, Venezuela experienced an economic boost from high oil prices due to the 1973 Yom Kippur War and the 1979 Iranian Revolution. However, corruption and embezzlement peaked during this period, with an estimated $100 billion in oil funds wasted or stolen by officials. In the 1980s, oil prices crashed, causing Venezuela’s economy to collapse and forcing the country to seek foreign loans. Public dissatisfaction with the government led to the Caracazo protests in 1989, which were brutally suppressed, leading to thousands of deaths and further eroding government credibility.
Hugo Chavez and the Bolivarian Revolution
In this climate of strife, Hugo Chavez, a soldier with leftist leanings, attempted a coup in 1992, which failed, resulting in his imprisonment. However, his image as a Venezuelan Robin Hood was born, and following his release, he was elected president in 1999. Chavez’s presidency is viewed differently depending on political orientation. His social programs helped lift many out of poverty, but he also exerted strict control over the press, eliminated political plurality, weakened the judiciary, and increased public debt by almost 300%.
Chavez also did nothing to change Venezuela’s dependence on oil. When state oil company PDVSA employees went on strike in 2002, Chavez fired over 19,000 workers, reducing oil production capacity. He also did not set aside money in a sovereign wealth fund to insulate against oil price falls, exacerbating the impact of the 2013 economic crisis, which Maduro inherited.
The Crisis Under Maduro
Economic Collapse
The 2013 Venezuelan crisis was more disastrous than the fall of the Soviet Union or the Great Depression. Oil prices fell, and Venezuela’s economy, dependent on oil for 90% of its revenue, crumbled. Defaults rose, foreign lenders stopped issuing loans, and Venezuela could no longer import essential goods. Hyperinflation took hold, and the value of the bolivar plummeted. Millions of Venezuelans fled abroad, seeking refuge in neighboring countries.
Political Instability
Throughout this, Maduro remained in power, supported by the military. Massive protests were brutally suppressed, and Maduro’s approval rating plummeted. His 2018 re-election was widely disputed, with opposition leader Juan Guaido declared interim president by the United States and many other countries. Sanctions were imposed, further crippling the economy.
Recent Developments
In late 2023, Maduro threatened to invade and annex the territory of neighboring Guyana, specifically the resource-rich Essequibo region. This posturing was partly driven by the high quality of oil found in Guyana, which is easier and cheaper to refine than Venezuelan crude.
The Future of Venezuela
Maduro has shown no signs of relinquishing power. He continues to isolate Venezuela internationally, with runaway inflation and mass emigration continuing to plague the country. Despite overwhelming opposition, Maduro has consolidated power by targeting opponents like Juan Guaido and seeking support from allies like Russia.
The 2024 Election
The next presidential election is scheduled for the summer of 2024, with former diplomat Edmundo Gonzalez as the main opposition candidate. While polls suggest he has significant support, unseating Maduro will be challenging given the regime’s grip on power.
Conclusion
Venezuela’s catastrophic decline under Nicolas Maduro is a tragic example of how a combination of poor governance, economic mismanagement, and authoritarianism can devastate a country. While the future remains uncertain, it is clear that significant change is needed for the Venezuelan people to rebuild their nation and secure a better future.
FAQ Section
Q: What caused Venezuela’s economic collapse?
A: Venezuela’s economic collapse was caused by a combination of factors, including reliance on oil exports, corruption, embezzlement of oil profits, and economic mismanagement over decades. The collapse was exacerbated by falling oil prices and hyperinflation under Maduro’s presidency.
Q: Who is Nicolas Maduro?
A: Nicolas Maduro is the current president of Venezuela, having succeeded Hugo Chavez in 2013. He was a bus driver and trade union leader before entering politics and has held various government positions, including Foreign Minister and Vice President.
Q: What is Dutch disease?
A: Dutch disease is an economic phenomenon where a country’s dependence on a single resource, such as oil, leads to the neglect of other industries, increasing reliance on that resource and making the economy vulnerable to price fluctuations.
Q: How has the Venezuelan government responded to protests?
A: The Venezuelan government under Maduro has responded to protests with brutal crackdowns, using military and police forces to suppress dissent. This has resulted in numerous deaths and injuries and widespread human rights abuses.
Q: What is the Essequibo region dispute?
A: The Essequibo region dispute is a territorial conflict between Venezuela and Guyana. Venezuela claims the resource-rich region, which is currently under Guyanese control. In late 2023, Maduro threatened to invade and annex the territory.
