According to NPR, Venezuela is enduring a food crisis so fierce that the black market for it is better business than the black market for drugs. Last summer the Venezuelan military was given complete control over the food supply, and now makeshift markets have sprung up across the nation, supplying Venezuelans with food that they would not normally get from the state-supervised supermarkets. Who’s selling the food at these markets? Often military members themselves, and if not them, then they stand nearby with arms at the ready. If this is the first you’re hearing of Venezuela’s appalling economic state, you’re not alone. We choose to ignore news of the latest Trump tweet in favor of taking a look at this outrageous crisis and how Venezuela has managed to come into the financial slump that it has.
Hugo Chávez, Alive in Policy
The turmoil has its lineage in the rule of Hugo Chávez and the consequent rise to power of Nicolas Maduro, his successor in both policy and position. Hugo Chávez brought socialism to Venezuela during his presidency which lasted from 1999 until his death in 2013. The nation was the wealthiest country in Latin America in the 1970s, but would endure three coups and a presidential impeachment in the 80s, and finally Chávez’s election in 1998. During Chávez’s reign the country’s murder rate and corruption within political institutions rose, and the deficit spending and price controls he enacted proved to be economically detrimental. The boom of oil profits in the mid-2000s allowed for much of Chávez’s government spending, but oil prices, as we know well, often have extreme fluctuations.
Boom or Bust: Oil
Around 95% of Venezuela’s export earnings is made through their oil revenues. When oil prices are high, Venezuela benefits mightily; when they are low, Venezuela suffers equally so. Venezuela has the largest reserves of oil in the world, but as oil is their only significant export, when prices plummeted as did their national earnings. Venezuela had also accrued a great deal of foreign debt during its period of oil boom, and recent years have additionally seen political unrest, drought, power shortage, and an absurd inflation rate of over 1,000%.
Venezuela’s present is bleak, to say the least. People stand in line for hours waiting to have a chance to shop in government-run stores, or, as many have done, turn to black markets for simple necessities like food. Water is equally scarce, and stories of hospitals with no medical supplies and no ability to clean simple equipment like beds are a dime a dozen. Venezuela is in dire straits, with a surging protest rising in the throats of the people in the face of literal starvation. The next time you’re complaining about food you received in an American restaurant, be thankful you didn’t have to steal away to a black market to eat at all.