Instability in Venezuela
Hugo Chavez came to power in Venezuela in 1998, and, because Venezuela is a petrostate with the largest oil reserves in the world, his socialist government was able to successfully implement its plan to provide subsidized goods and services to the Venezuelan people. However, years of economic mismanagement and corruption under Chavez led to Venezuela’s almost complete dependence on oil exports, and the collapse of global oil prices in 2014 led to a rapid economic decline.
After Chavez’s death in 2013, then–Vice President Maduro assumed the presidency and was subsequently elected to office. His government attempted to address the economic crisis by printing money. This policy pushed the country into years-long hyperinflation, which was on pace to hit ten million percent in 2019 before starting to ease. By 2014, large-scale anti-government protests erupted across the country, and, in 2015, voters expressed their dissatisfaction by electing the first opposition-controlled National Assembly in two decades, setting the stage for a standoff between the legislature and Maduro.
Maduro was reelected to a second six-year term in May 2018, despite boycotts and accusations of fraud in a widely condemned election, including by a group of fourteen neighboring countries known as the Lima Group, and was officially sworn into office in January 2019. Two weeks later, on January 15, the National Assembly declared Maduro’s election illegitimate, and opposition leader Juan Guaidó announced that he would assume office as interim president until free and fair elections could be held. Guaidó was quickly recognized as interim president by the United States, Canada, most of the European Union, and the Organization of American States, but Maduro retained the support of several major countries including China, Cuba, Russia, and Turkey.
The resulting political standoff saw an increase in U.S. sanctions against the Maduro government, including targeting oil shipments to Cuba—Maduro has increasingly relied on Cuban military and intelligence support to stay in power—as well as discussions about a potential military intervention, which ultimately did not occur. Russia, meanwhile, continued to support the Maduro government, sending Russian troops to Venezuela in March 2019 and helping the government evade sanctions on the oil industry. China continued to back the Maduro government as well, including offering to help rebuild the national power grid.
Amid a humanitarian crisis, thousands of people fled the country every day by early 2019, mostly on foot. Exacerbating Venezuela’s economic woes, its poorly maintained infrastructure led to a series of country-wide blackouts in March 2019 that left millions without power. In April 2019, after years of denying the existence of a humanitarian crisis and refusing to allow foreign aid to enter the country—calling aid shipments a political ploy by the United States—Venezuelan President Nicolás Maduro allowed the entry of a shipment of emergency supplies from the Red Cross.
Since the situation deteriorated and the crisis escalated in 2015, an estimated seven million Venezuelans have fled the country, with six million resettling in other Latin American countries, including nearly 2.5 million in Colombia alone. Overall, Venezuela represents the third-largest international displacement crisis. The exodus also caused a regional humanitarian crisis, as neighboring governments struggled to absorb refugees and asylum seekers. Moreover, because the government has been unable to provide social services, Venezuelans face severe food and medicine shortages, as well as the continuing spread of infectious diseases.
Despite an improvement in the political and economic situation and an overall drop in migration outflows, the United States continues to encounter high numbers of Venezuelan migrants at its southern border. Furthermore, Latin American countries continue to struggle to accommodate asylum seekers and provide access to services. The United States has a stated interest in mitigating the humanitarian crisis and preventing further destabilization of the region. However, the U.S. State Department also has concerns regarding Maduro’s human rights record and the employment of armed gangs, known as colectivos, to suppress opposition. Armed groups also operate across the porous Colombia-Venezuela border, complicating efforts to bring peace and stability to Colombia. Finally, Venezuela’s isolation has pushed it to ally with other U.S.-sanctioned states like Cuba and Iran.
Despite the increased pressure and sanctions of early 2019, Maduro managed to maintain and even solidify his grip on power. Maduro suddenly implemented key economic reforms, including ending price controls, allowing dollar transactions, slashing bolivar currency circulation, and starting to publish economic indicators after a four-year hiatus. In September 2021, Venezuela announced the launch of a new currency, dropping six zeros from its bolivar notes. While these drastic shifts in economic policy left Venezuelans struggling to secure bolivars and adapt in the short term, hyperinflation subsided. The bolivar stabilized in early 2022, with annual inflation falling below 50 percent, though more than 60 percent of transactions were carried out in dollars. After falling [PDF] by 75 percent since 2014, Venezuela achieved 15 percent growth in 2022, the highest in Latin America. However, inflation began to slowly rise again in late 2022, and by 2023 prices were still tripling annually, a monumental improvement from hyperinflation but still one of the highest rates in the world.
Politically, international support for Guaidó has waned, with the Biden administration following the lead of the Venezuelan opposition in ending recognition of Guaidó as Venezuela’s legitimate leader. Meanwhile, Maduro’s position has recovered internationally; Western officials have opened dialogue, and he has strengthened ties with leftist leaders in Mexico, Colombia, and Brazil. Domestically, the opposition has decided to contest the 2024 presidential election after years of boycotting elections. However, repression of the opposition continues and electoral reform negotiations have stalled, meaning elections are unlikely to be free or fair.
After a pandemic-induced decline, Venezuelan migration is on the rise again, with a record number of Venezuelans attempting to cross the Darien Gap to Central America in 2022, most en route to the United States. While the numbers do not match the thousands per day that fled at the peak, migration still constitutes a major challenge for a region that has already absorbed millions of Venezuelans.
