The Roots of Venezuela's Failing State

Published by the History Departments at The Ohio State University and Miami University

Boom and bust. That economic cycle has happened repeatedly in places dependent on one natural resource, like Venezuela and petroleum.

In the 1970s, Venezuela had the highest growth rate and lowest inequality in Latin America. Thanks to an oil bonanza, the government was able to spend more money (in absolute terms) from 1974 to 1979 than in its entire independent history. Indeed, during this time, this Gran Venezuela had the highest per capita GDP in region.

Scotch whiskey consumption was the highest in the world, the middle class drove Cadillacs and Buicks, and the free-spending upper class jetted off on shopping sprees to Miami, where they were known as “dame dos” (“give me two”). Politically, the country was one of only three democracies in Latin America in 1977, along with Costa Rica and Colombia.

But Venezuela is now deeply mired in political, economic, and humanitarian crises.

The nation’s economy contracted an estimated 18.6 percent in 2016, and is expected to shrink between 4.3 and 6 percent further in 2017. The 2016 inflation rate was estimated at 290 to 800 percent, and in December 2016 the country became the seventh in Latin American history to experience hyperinflation. Despite the government’s best efforts to continue payments, a crippling debt default also appears likely in 2017.

The human costs of the crisis have been dire, with food and medicine shortages, soaring infant mortality, and one of the world’s highest violent crime rates.

Massive queues for scarce goods like toilet paper, milk, cooking oil, butter, and corn flour (for the country’s ubiquitous arepas) have given rise to professional line standers who are paid to wait on behalf of others, digital apps to help citizens find scarce items, and stories like women giving birth in line or placid observers holding their places while witnessing a murder.

Three-quarters of Venezuelans have lost about 19 pounds of body weight in the last year on what people are calling “the Maduro Diet,” a scathing reference to current president Nicolás Maduro.

Public health is just as bad. As hospitals have run out of imported antibiotics, surgical supplies and spare parts for medical equipment, infant mortality rose 30 percent, maternal mortality 65 percent, and malaria 76 percent in 2016. Diphtheria, once thought eradicated, has made a comeback.

By some estimates, 2.5 million people have left the country since 1999 and Venezuela now leads U.S. asylum requests. On par with these devastating developments, the country has slipped from a hybrid regime—a type of political system that combines democratic traits with autocratic ones—into pure authoritarianism. The government postponed regional elections and suspended an opposition-driven presidential recall referendum against Maduro in October 2016.

Maduro has since tried attempted to dissolve the National Assembly, provoking international opprobrium, massive demonstrations, and condemnation from members of his own party. Some analysts fear the country may be on the brink of civil war.

What are the roots of this extraordinary economic and democratic decay?

Read the full article

Origins: Current Events in Historical Perspective

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The Author

John Polga-Hecimovich

John Polga-Hecimovich is an Assistant Professor of Political Science at the US Naval Academy. His research focuses on the effects of political institutions on democratic stability, policymaking, and governance in Latin America, and he has published in a variety of peer-reviewed academic journals, including The Journal of Politics, Political Research Quarterly, Democratization, and others. He is currently at work on a book manuscript that examines how bureaucratic capacity and presidential ideology affect policy delegation and implementation in Latin America."

Twitter: @jpolga

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