Economic and Social Turmoil in Venezuela Caused by Autocracy and Misgovernance

Abstract

Venezuela was once a thriving economy but it experienced one of the worst political crisis and economic catastrophe in modern times. The failure of leadership and erroneous policy measures were instrumental in this disaster. After Hugo Chavez, his successor Nicolás Maduro from socialist PSUV party took over in 2013. His extension through the general election in May 2018 remained shrouded under controversy. There was massive corruption, social repression, deceleration of productivity, economic indecision, higher dependence on oil, rampant human rights violation, and shutdown of businesses noticed during his regime. Venezuela is an oil rich country with the leading verified oil reserves in the world. Its economy is highly dependent on oil exports but oil production has plummeted tremendously. The nation failed to diversify in other lines of production even as oil prices started to fall since 2014 and the economy suffered beyond measure. As per IMF estimate, Venezuela's economy has shrunk by more than one-third between 2013 and 2017 approximately. Its currency value reduced to rubble, inflation skyrocketed, GDP growth rate went into tailspin and debt defaulted. There is unprecedented humanitarian crisis in Venezuela in recent times. Rise in violence and crime, hunger, malnutrition and poverty led millions of people to flee the country. As per the United Nations’ record, about 4.8 million Venezuelans left the nation since the crisis erupted in 2014. US imposed sanction on Venezuela in 2015 which further got intensified in 2017. There is now international pressure on Nicolás Maduro to step down and to allow his opponent Juan Guaidó to run the country. In the times of the Corona virus outbreak, this crisis has aggravated for the economically impaired nation.