Venezuela In The Economic Crisis

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Venezuela in the economic crisis


Venezuela under Chávez, at the time of Boom Petrolero, suffered from two classical commodities dependence: Dutch disease and the tendency to spend deficiently. But it was the institutional responses of Chavism to these two diseases that led Venezuela to suffer from a deep economic crisis, even when oil prices were still favorable. 


In particular, price control in the vast majority of markets, adverse regulations to the private sector, the nationalizations of so many companies without controls on their management, etc., caused what I call an unreal crisis. The Government sought to establish an expansive state without controls, and a restricted private sector and with too many controls. 

The result, unfortunately, was predictable. The uncontrolled status formula and prey companies had already failed before, even in Venezuela itself. As the humorist José Rafael Briceño points out, Chavismo was at the forefront of the past. What was not predictable is that when the crisis deepened in 2014, the government was going to insist with more of the same. In textual words by Alfredo Serrano, the Marxist Spanish economist, admirer and advisor to Chavismo: 

President Maduro has followed the economic thought of President Hugo Chávez to the letter. The problem is that when an economy is so sick, responding with more of the same does not necessarily bring more of the same, but on the contrary: greater deterioration. The Chavista governments both low.

We are also facing a continental and international crisis for the political and geopolitical consequences that involves the existence of two leaders who function before Venezuelans and the world as legitimate presidents. Both the local scenario and the performance of the international actors involved there experienced a turn after the assumption of the powers of the Executive Power by the National Assembly on January 22. 

The phenomenon was accentuated a day later, when Juan Guaidó swore. The Venezuelan Legislative was protected by article 233 of the Constitution to create an interim government when the absolute lack of the elected president is produced … before taking possession, a new election will be carried out.

And while the new president or president takes possession, the president or president of the National Assembly will be responsible for the Presidency of the Republic;and in article 333 to restore the validity of the Constitution, considering the elections of May 20, 2018 in which Maduro was re -elected. The Assembly rejected Maduro’s possession of January 10 at the headquarters of the Supreme Court of Justice and not, as is mandatory, before the National Assembly. 


Trump’s decision to break with Venezuela would have been more complex to take if V, .There would be no change on Latin American scale, which ended up pressing Washington and Brussels. Since its creation in August 2017 the Lima group began playing an increasingly important role. The following year he hardened his speech, a trend that was accentuated as of January 2019. In this way a clear position was taken with respect to the government and legitimacy of Maduro, abandoning the traditional Latin American policy of non -interference. 

On December 19, after a meeting in Bogotá, it was announced that none of the group members would recognize the results of the elections in which Nicolás Maduro was re -elected. On January 3, all the countries of the group, except Mexico, reiterated in a statement that this electoral process lacked legitimacy by not complying with international standards. With a majority of Latin America countries denying Maduro his legitimacy, Trump’s response.  

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