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🇻🇪 From riches to rags: Venezuela's economic crisis | The Big Picture
   Al Jazeera English
  Published: 5 days ago

21,377 Views

The Venezuelan people struggle to cope with the toxic effects of hyperinflation, severe debt and chronic food and medicine shortages, as Venezuela - once the wealthiest country in the region - is mired in the worst economic crisis in its history.

"Venezuelans today cannot eat. You see people eating from the garbage," says Professor Margarita Lopez Maya, Central University of Venezuela.

So how does a country boasting the world's largest oil reserves find itself on the brink of economic ruin?

It's the country's very history that sheds light on what has gone so drastically wrong in Venezuela today.

When Hugo Chavez was elected president in December 1998, he promised to tackle corruption and poverty.

He used Venezuela's rapidly growing oil wealth to set up social programmes, known as the Misiones, with the aim of eradicating poverty and reducing inequality. It was, many claimed, a much-needed intervention in the entrenched disparity between Venezuela's rich and poor.

As Chavez strived to transform the nation with what he called 21st century socialism, his populist policies began to take a more radical turn. He nationalised industries and bloated state bureaucracy at great national expense, all funded by high oil prices and unchecked borrowing. Venezuela became saddled with record-high levels of debt.

By the time of his death in March 2013, Chavez handed over both the reins of power to his handpicked successor, Nicolas Maduro, as well as the poisoned chalice of an economy about to implode.

"Maduro has inherited a legacy of oil dependence at a period when Venezuela has gone bust, and at a time where the oil price has gone bust," says Professor Julia Buxton, author of The Failure of Political Reform in Venezuela, adding that Maduro "has simply not addressed any of the problems or the legacy that he inherited from President Chavez."

"The collapse of economic activity makes this period, from 2013 onwards, the largest recession in Western Hemisphere history - significantly larger, almost twice as large as the Great Depression of the US," says Ricardo Hausmann, former Venezuelan minister for planning.

The IMF predicts that in 2018, the Venezuelan economy will contract by 15 percent, and inflation will reach 13,000 percent.

But will those now tasked with governing a struggling nation learn any lessons from its troubled past?

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Comments Directly on YouTube

3 hours ago
They wouldn't need to borrow if they unpegged their currency from that of a forigen nation's.


6 hours ago
The irony is that ppl ask from rights and protections they have never given as everyone was a messiah with an infinate mercy and might. The truth has and will be is that that which unbefitting for thee shall always be. Animals teaching the master, what a sorry and disgusting melée of events. When u have the discretion and genius of benevolence, then talk to me about devinity.....


6 hours ago
Thank goodness my country has the Panama Canal. Water is our oil, and it is not subject to price fluctuation, actually we get it from the clouds for nothing, and will always be abundant.


9 hours ago
Socialism in the 21st century everyone


2 days ago
THEY DIDN'T EVEN ADDRESS THE PROBLEM IN DETAIL
THE OPPOSITION ENCOURAGED DEVALUATION OF CURRENCY AND THAN TURN AROUND AND BLAMED MADURO AND SOCIALISM
100% PROPAGANDA


2 days ago
Venezuela is my life 🌷


3 days ago
That is Bernie Sanders model.


3 days ago
The truth about Venezuela will come out just like it did with Nicaragua. The media backed by a US regime change agenda has been manipulating the facts. That is not to say there isn't corruption, waste and mistake made by the Venz gov. You only see bad coverage never good news like how there is. You look at how Aljixeera covers Venezuela and think Colombia the #1 cocaine producer seems like paradise.


3 days ago
Private Enterprise makes up 95% of all business in Venezuela the gov kept 5% strategic companies. One of the problems is that business are used to the gov giving them dollars which it doesn't have due to the Petro prices. And all the dollars private business receive they send out to Florida


3 days ago
How come Aljizeer doeant say how Ricardo Haussman brought indirectly Chavez into power because as finance minister he implemented neoliberal policies which resulted in the caracazo of the 80s


3 days ago
What happens when 90% of your income goes away over night? And when US places sanctions and even if you have money to import food and medicine banks won't accepty to make the transfer. Or when you try to export and commercialize products no one can buy from you because payments aren't accepted by banks due to embargo


3 days ago
Chavez the biggest DESARTER FOR VENEZUELA. HE BECAME THE SEED OF INICIAL CATASTROFE THAT END WITH WHAT VENEZUELA IS TODAY: A total big desarter for the Venezuela people.


3 days ago
Chavez have good intention but the biggest mistake he made, is to use Cuba as a role model for his social program. Most Cuban only have $20+ monthly wages. Cuba social program can only make everyone equally poor. Not equally rich. It is not a role model for wealth redistribution.


4 days ago
Soon to be in Guyana.


4 days ago
Eva Golinger wrote a book specifically naming opposition supporters, even small fry university professors and NGO workers, putting them in danger of attacks as she made out like they were part of a conspiracy. Now apparently she agrees with them retrospectively. Why does the media and publishers give her the time of day.


4 days ago
Whoever control the price of oil, did this to Venezuela and now they try to do with Russia.


4 days ago
Thanks China and Russia for making Venezuela the richest Nation on earth all citizen is living like kings and queens from South America


4 days ago
socialism simply does not work bernie sanders supporters


4 days ago
The problem was already there before Socialism, and Socialism and Chavez came to power to clean the mess just like Trump's Corporatist, Fascist, and Extreme Nationalist emerge to clean the mess of its Declining Economy, another Humiliation of 15 years of War, and its losing status as SuperPower. However, Trump is deceiving the people and used hatred and racial resentment to get into power, Chavez' rise to power was justified because his message was humanitarian, however, Americans always tarnish humanitarian visions by their individualistic greed for Wealth like the Demons that they are.


4 days ago
Anti-Socialist Propaganda. The problem is that U.S does not want a Socialist nation in this hemisphere. The problem was already there before Socialism, and Socialism and Chavez came to power to clean the mess just like Trump's Corporatist, Fascist, and Extreme Nationalist emerge to clean the mess of its Declining Economy, another Humiliation of 15 years of War, and its losing status as SuperPower. However, Trump is deceiving the people and used hatred and racial resentment to get into power, Chavez' rise to power was justified because his message was humanitarian, however, Americans always tarnish humanitarian visions by their individualistic greed for Wealth like the Demons that they are.


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