As the world views the collapse of Venezuela from beyond its borders, many are left to wonder why exactly it is happening. A new idea that has weaved its way through political and economic circles is that sanctions placed on them by the US are to blame.
To better understand whether or not this is true, we must first analyze two aspects of Venezuela’s current situation. First, the duration of Venezuela’s recent social and political climates and second, what and when sanctions were placed on them.
Background and War
Venezuela gained independence from Spain in 1823 and established itself as a sovereign nation in 1831. In spite of the fact that it is roughly a half-century younger than the United States, it has suffered:
- three times as many civil wars before World War II
- eight military coups
- three civilian coups.
Three of such coups have occurred since the 1990s.
These battles have shifted the control of power between liberals and conservatives undemocratically no less than six times. This power struggle has contributed to an undeniable lack of stability in the political system. Venezuelans have seen twenty-six different constitutions being established for the country. The most recent was established in 1999, bringing the “Fifth Republic of Venezuela.”
Oil and agriculture are among the two most important industries for the country. While oil had already been nationalized in 1971, it carried over to the new Republic. Chavez did incredible damage to the industry.
He fired 19,000 experienced workers and installed regime loyalists in 2003. Afterward, he engaged in massive looting of the public treasury fed by oil revenues to pay for social programs. Oil titans fled. Investments dropped. Exports plummeted.
The agriculture industry had been suffering leading into Chavez’ dictatorial rule. While previous administrations neglected the industry, Chavez’ response was to steal 6.6million acres of land for redistribution.
Additionally, Chavez sacked the largest fertilizer and supply corporations. Overall, lands have suffered massive mismanagement, as crops have been sewn into unsuitable lands and placed in the hands of the inexperienced.
Chavez also ousted foreign investors from its gold industry and seized the mines from their owners. They came under the control of illegal miners who have been placed under the supervision of the army. In a mere decade, annual gold production fell from 11 tons to a mere 500 kilos.
Glass, cement, steel, banks, telecoms, energy, transport, even tourism were all subject to Chavez’ usurpation. And all of these industries have suffered from incompetence, corruption, and decline as a result.
Prior to sharing details, it should be noted that the US did not place sanctions on any sectors of the Venezuelan economy until the Trump administration began, long after the country’s economic woes were long underway. Sanctions largely were placed on specific individuals who were engaged in human rights violations, drug and human trafficking, and terrorism.
The first two sanctions were terrorism-related. These were placed on Venezuela in 2006 and 2008 under President Bush. Due to security and human rights concerns, the administration stopped the sale of arms to the country. Later, they froze the assets of two individuals suspected of aiding Hezbollah.
These sanctions on individuals continued under the Obama administration in 2011 and were expanded by Congress in 2014. Congress required the President to freeze assets and place visa restrictions on specific persons which continued through 2015.
In 2017, the Trump administration continued the policy of restricting the ability of individuals to commit crimes against humanity. It wasn’t until 2018 and 2019 that sanctions on specific industries, such as the Venezuelan oil company PdVSA and their gold-mining company Minervan.
The calamitous situation that Venezuela finds itself in should not come as a surprise. The causes, however, are not nearly as simple and straightforward as many might like us to believe. As with most disasters, the causes are varied and compounded.
In reality, the policies implemented by two consecutive dictatorial regimes in Chavez and Maduro have created a complex domino effect that has devastated a nation. This should come as no surprise. Financial publications have been covering the details of Venezuela’s theft, corruption, mismanagement, and abuses for decades.
Now that the culmination of its government’s failures is presented to the world, it is imperative that the record is set straight; neither the United States nor capitalism is to blame for this utter catastrophe. History has once again repeated itself; socialism and the arrogance of its believers who think they are knowledgeable and capable enough to run entire economies have once again brought another nation to its knees.