Tag Archive | "socialism"

Venezuela in Crisis: A Socialist Dystopia

Caracas Dystopia

Photo Credit: Federico Parra |AFP | Getty Images

City-wide protests have occurred daily throughout Venezuela, a politically divided and economically destitute country, which was once South America’s wealthiest nation. Police meet protesters with rampant arrests, tear gas, and rubber bullets. Since the beginning of April, hundreds of thousands of Venezuelans have protested President Nicolás Maduro’s socialist government and its perpetration of the nation’s ever-worsening economic crisis. Initially comprised of students, youth, and members of the middle class, the opposition movement’s base grows daily. As the quality of life in Venezuela continues to spiral, the opposition increasingly gains support from those once faithful to the socialist agenda, the lower class. The sustained global drop in oil prices and prolonged drought have only worsened matters for the public, who struggle daily to obtain essentials like food and medicine. Protesters demand new elections and release of political prisoners, hoping that a change in the socialist leadership will end the crisis.

Since the mid-20th century, petroleum extraction and exploitation have been the foundation of Venezuela’s economic structure. The Venezuela of the 1950s was poised to be a major player in international petroleum exportation; intent on sembrando el petróleo (sowing the oil), the nation relied on its massive oil wealth to advance society. To maximize oil exports, investors financed alternative energy production for domestic servicing. Most notably, the Guri Dam generates 60% of Venezuela’s energy through hydroelectric power.

In the early 2000s, the late president Hugo Chávez leveraged Venezuela’s massive oil wealth and the global upswing in oil prices to create an unsustainable social welfare state. He implemented sweeping nationalization of Venezuela’s economy, primarily in the oil sector, in pursuit of his socialist utopia. Chávez expanded the state-owned oil company Petróleos de Venezuela, or PDVSA, and its dominion over oil extraction and production. Chávez’s frenetic charisma, combined with frequent government handouts, projected an image of resolute national prosperity while masking the regime’s internal corruption. Many Chavistas still await the ‘Bolivarian Revolution’ that Chávez promised.

Maduro, Chávez’s successor, inherited an economy wholly propped up by the nationalized oil industry. Maduro’s financial mismanagement and authoritarian actions set the nation on a fast-track toward recession, even prior to the 2014 collapse of global oil prices. Domestic oil production is dropping at an accelerated rate, with drilling sites and refineries falling into disrepair. The government and PDVSA are strapped with nearly $60 billion in international debt in the form of short-term bond payments. Meanwhile, the government is failing to import food, medicine, and other essentials at a sufficient rate to meet the dire demand. With inflation rates just over 800%, most Venezuelans are unable to afford food and many report significant weight loss. Waiting hours on end for food rations at government controlled food-distribution centers is an every-day reality. Additionally, the Guri Dam is largely out of commission due to a prolonged drought and the government imposed a two-day workweek to cope with frequent power outages. Venezuela’s economy is in abysmal shape and the prospects of a positive change are wholly dependent upon an upswing in global oil prices.

A highly controversial supreme court ruling sparked the most recent round of protests in Venezuela. The nation’s supreme court is notoriously beholden to Maduro and the socialist regime established by Chávez. Meanwhile, the opposition-controlled National Assembly represents the sole counter to the United Socialist Party’s total control over the government. On March 31, 2017 Venezuela’s supreme court stripped the National Assembly of its legislative, justifying this power-grab by holding the National Assembly in contempt of the laws of the nation. Three members of the National Assembly face accusations, by President Maduro, of administrative impropriety in winning their elections, thus enabling the supreme court to hold the entire legislature in contempt. The supreme court was set to take over all responsibilities and functions of the legislature. Domestic and international condemnation were quick to criticize this decision, a move that many considered “a rupture in the constitutional order” and Maduro’s attempt to create a “petty dictatorship.” In the face of such scrutiny, the supreme court rolled back some of its decision on April 1, however, President Maduro retains unfettered power “to enter into joint oil ventures without congressional approval.” One faction of the opposition considers the rollback further proof that the supreme court is in Maduro’s pocket, while others believe it reveals cracks within the USP’s party-loyalists.

Food scarcity and undemocratic power grabs will be determinative of Maduro’s power retention in 2017. Those loyal to Chávez’s socialist revolution grow disillusioned by the day as they face food shortages and soaring inflation with no prospect of change. Maduro’s regime faces international, regional, and domestic pressures to abide by Venezuela’s constitutionally democratic roots. The call for new elections intensifies as the opposition’s support increases and the nation’s economic crisis worsens. A newly elected official, however, will have to confront the economy’s strict oil dependence and determine how the nation can diversify to succeed in the 21st century. Regardless of any political changes, without an upswing in global oil prices, the crisis will only worsen, violating international human rights norms in the process.

Rachel Ronca is a Staff Editor with the Denver Journal for International Law & Policy, and a 2L at the Sturm College of Law.

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Venezuelan Elections: What’s Next?


Maduro has embraced the same anti-American sentiments as Chavez, leaving many wondering what the new Socialist president will do to help or further hinder United States-Venezuela relations. (Google)

Maduro has embraced the same anti-American sentiments as Chavez, leaving many wondering what the new Socialist president will do to help or further hinder United States-Venezuela relations. (Google)

President Hugo Chavez’s work to nationalize Venezuela’s petroleum market and anti-American sentiments lead to strained relations between the United States and Venezuela from Chavez’s election in 1999 until his death this past March.  Not surprisingly, the United States government and private petroleum industries watched carefully as Venezuelans hit the polls to vote for Chavez’s successor.  As many international actors predicted, but maybe hoped would not be the case, Nicolas Maduro, Chavez’s handpicked successor, won the presidential election by two percentage points. Maduro has embraced the same anti-American sentiments as Chavez, leaving many wondering what the new Socialist president will do to help or further hinder United States-Venezuela relations. 

Between Maduro’s belief that the United States conspires against his Socialist agenda and the U.S. State Department’s threat not to recognize Maduro as president until Venezuelan officials complete a vote recount, United States-Venezuela relations do not appear on to be on the mend.  U.S. opinion regarding the recount is not surprising.  However, the United States’ input did not help to soothe Maduro’s suspicions that the United States is working with the opposition to take away his presidency.

Despite the mutual disdain, Maduro has said that he wants to work towards restoring Untied States-Venezuela relations “in terms of equality and respect.”  Critics do not believe that the United States will give Maduro the equality and respect he is demanding.  However, it is in the best interest of both countries to mend the relations between them. 

Venezuela is slipping into an environment of inflation and high crime, something that the citizens of Venezuela have chosen to ignore because of Chavez’s heroic demeanor.  Now that the heroic figure is gone, there is some concern that Maduro will not be able to distract the public’s attention from the major issues the country is facing.  Therefore, it will be necessary for Maduro to address these issues and find a way to help boost the economy.  Maduro will need to focus on rebuilding its petroleum industry.  Venezuela has one of the largest oil reserves in the world, yet oil exports have decreased significantly and there has been a significant increase in Venezuelan import of fuel products from the United States over the past decade.

The United States relies on the import of foreign oil that comes mostly from Saudi Arabia.  This lengthy transit time leads to an increase in oil prices, an issue of extreme important to the citizens of the United States.  United States oil import needs can easily be filled with by Venezuela’s oil reserves – the largest in the world – in a transit time of only four days.  This is a significant decrease in transit time and could bring down the price passed onto the consumer.

Restoring the relationship between the United States and Venezuela would benefit both countries’ economies.  It would provide the United States with an energy partner whose border is much closer than that of the Middle East decreasing the price of oil and it would increase Venezuelan petroleum exports.  Reverend Jesse Jackson said, “With stronger economic ties comes political stabilization.” Stabilizing the Venezuelan political atmosphere would promote foreign investment in the petroleum industry further improving the economy.

 Alicia Guber is a 1L at the University of Denver and incoming Alumni Editor for the Denver Journal of International Law and Policy

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University of Denver Sturm College of Law

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