Venezuela’s economic problems are largely self-inflicted due to a combination of poor economic policy and corruption. The country’s current financial woes are the direct result of socialist and communist policies pursued by former President Hugo Chavez and current President Nicolas Maduro, which involved placing large sectors of the economy under state control and instituting expansive social welfare programs without considering the costs.
Additionally, Venezuela failed to diversify its economy during this time period, primarily relying on oil exports to fund its operations. This was made possible due to the fact that oil was extremely expensive during the 2000’s. However, the global crash in oil prices that occurred in the mid-2010’s has directly translated into financial pain for Venezuela, as the country can no longer take in enough income to survive. The lowered price of oil was largely made possible by advances in hydrofracking technology, allowing previously inaccessible oil deposits in the U.S. and Canada to be exploited.
The Venezuelan government has steadfastly refused to admit that its economic system is failing, instead masking its problems through increasingly restrictive economic laws and a crackdown on freedom of expression. The U.S. and other developed countries have responded with sanctions and other measures designed to cripple the country, as retaliation for its seeming erosion of democratic liberty. Ultimately, Venezuela’s current situation is untenable due to the mass amounts of starvation, hunger, unemployment, and poverty that are now gripping the country.
Since the existing government has shown no interest in reforming its economy to accommodate reality, it is clear that some sort of revolution or coup will occur that will take the existing leadership out of power. Venezuela has repeatedly shown that it is incapable of performing the functions of a healthy economy, and thus the course of events will result in a major, forcible change in the country’s course.