ADSactly World - A Brief Overview of the Events that Triggered the Current Venezuelan Crisis

in #world2 years ago


This is not the first time when I find myself writing an article shining a little light about the beginning of the current economic and political crisis that’s happening in Venezuela, which as I am sure a lot of you already know, is the worst crisis in the history of the country.

However, recently I found a new document from a well respected Venezuelan economist, where he shared his own explanation about certain events that I wasn’t aware before, events that in his opinion, had some influence in the deterioration of the country that started a few decades ago.

Since this was new information for me, I decided it was a good idea to prepare an article and share this new finding with the community.

To start it off, it is very important to understand that Venezuela wasn’t always a country in crisis, until a few decades ago, it was a very prosperous place, where people from other South American countries came here to have a better life, and even people from European countries like Spain, Italy, Portugal, Germany, among others, also came here in great numbers. This is why today there are so many Venezuelans with European passports returning to Europe to escape from the current situation.

To put things into perspective, between 1925 and 1974 the Venezuelan economy was the one growing at a faster rate on a global scale, and between 1950 and 1974 Venezuela also had the lowest inflation rate in the whole planet Source in Spanish

Measured as real gross domestic product (GDP) per capita in international dollars, Venezuela attained levels of more than 80 percent of that of the United States by the end of 1960. Source

It is clear that in those decades the future of Venezuela looked bright, the economy was going great, and people from all over the world wanted to come and live in the country. So how come now Venezuela finds itself in a circumstance that is the complete opposite?

Well, apart from the totally different economic & political model that is currently in place in Venezuela, one where there isn’t a free market and the government acts in a totalitarian way due to their ideology, there was an important event that happened in the United States, which according to the author of the document I recently read (which is linked at the end of this post), ended up having a great impact in the way politicians in Venezuela developed their strategies to govern the country.

Specifically, this event is called the “Nixon shock”, when the American president informed the world that the dollar-gold conversion was no longer accepted. Apparently, this important change in the economic policies of the most important country in the world, caused a lot of modifications regarding how Venezuelan politicians handled the national oil, mainly due to the sudden appearance of the oil rent, which is the difference between the production costs of the oil, and the price people pay for it, this is the part that I wasn’t aware of, but the “Nixon shock” might have been one of the factors that triggered the appearance of the oil rent, at least, that’s what this economist is saying.

Given the huge potential earnings coming from the oil industry thanks to its rent, and doing a little bit of intellectual speculation, there is the possibility that Venezuelan politicians from that time saw this new-found money as a way to offer “free stuff” to the people (which is, by the way, a strategy that also happens in other countries, but in the end, nothing the government gives away is “free”) with the goal of earning their popular support, and achieve political power through this classical populist strategy.

Since the “Nixon shock” happened in 1971, it is then no surprise to see that by the end of the 70s, Venezuela started to begin its deterioration, once populism took control of Venezuela’s political landscape, the country started to get worse and worse with each passing year, even to the point of having a social explosion at the end of the 80s.

The politicians in Venezuela shifted their focus from having a country with proper law and order, to only caring about having access to the oil revenue and offering stuffs to the people, earn more votes and win elections, which was clearly an extremely unhealthy dynamic, as we can now see by its results.

After more than 2 decades of deterioration, the people desperately wanted to find a solution to what was happening with their quality of life, I think they didn’t understand the causes of the problem, and by the end of the 90s, the voters decided that Chavez was the solution.

It has to be said that Chavez before becoming President was completely different than Chavez after becoming President, but still, even after showing his true intentions once he enforced the currency exchange control, the people kept believing in this model, instead of stopping populism and the use of oil money to buy votes, the people went “all-in” towards the ultimate expression of a populist government, that ultimately ended up being a totalitarian government, the worse one in the history of the country.

The result of this stubbornness can be seen today in all those news, articles and reports that are constantly informing the world about the horrible situation in Venezuela. The problem for Venezuela has always been having a populist form of government, except that right now, the ruling political party more than being populist, it has morphed into an extensive criminal organization, with ties to all sort of criminal groups from all over the world like Hezbollah itself.


If Venezuela is ever going to overcome this difficult situation, it will only happen with the help of other countries that are committed to defend freedom and stop terrorist governments, and in order to stop suffering from these crises, the people need to finally understand that populism or any other similar system always ends in the government having more power than what it should have. People must choose freedom, and do it in perpetuity.

I am looking forward to reading your comments about the current situation in Venezuela!

Image sources

1, 2, 3

Reference (in Spanish)

Authored by @dedicatedguy

Click on the coin to join our Discord Chat

Go Adsactly

Vote @adsactly-witness for Steem witness!
Witness proposal is here:

Witness Proposal
Witness Proposal Update

Go To Steem Witness Page
In the bottom of the page type: adsactly-witness and press vote.
witness vote.gif
Use small letters and no "@" sign. Or, click here to vote directly!
Thank you!


Great article. You have a great job summarizing some of the main issues leading to my country's current crisis.

The saddest thing about this situation is that after so many years of brain washing and subjection to scarcity and limitations, the current population is less suited to take wise electoral decisions than the one that put Chavez in office.
Venezuela's most talented people have left, very unlikely will they return any time soon, even if there were a change of government today.

You have to walk our streets and talk to people to see the real tragedy. A population without hope, without a clear definition of what it means to live in democracy, of what having rights and demanding government's accountability entails.

Chavez did a great job at exploiting people's resentment and the international community, especially the countries with enough power to end this tragedy, contributed to that.

When you see the government's media (which are the one left) you can see how they exploit Europe's and America's mistakes to corroborate to the average Venezuela that those who want to end the Bolivarian revolution are evil.

Every instance of racism, corruption, political manipulation, international cover-up, betrayal, corporate screw-up, self-interest (diplomacy?) etc. is used to reinforce the thesis that Chavez (and the left in general) was always right and that it is better to have something bad that you already know (got used to) than something new you have no idea (well, the government has planted some) what evil will cause.

The greatest damage done by the chavista regime was not to the economy or the rule of law, it was to the moral fiber of the population. We are a lost generation driven only by survival instincts, the same instinct that prevent a group of professionals from protesting or make men in uniform to corrupt themselves and contribute to the corruption of the whole system.
The politicians who may substitute Maduro will have a very hard time trying to convince people that populism and lazyness is not the way to fredom and prosperity.

the current population is less suited to take wise electoral decisions than the one that put Chavez in office.

That's a possibility, which is why the solution seems to be only through the application of international force.

The current government did great damage to the moral fiber of the people, just as you say, but that can be restored, although it will be very challenging.

If we review the history of Venezuela, there will come a point at which we will ask ourselves: at what point did we become what we are now? Venezuela was such a prosperous country that its inhabitants went out to Miami to make supermarkets and we were known in the world because wherever we arrived we said: it's cheap, give me two. As you well say: Venezuela became a receiver of emigrants from all latitudes who saw in Venezuela not only the opportunity to escape the dictatorships of their countries, but also the opportunity to emerge, to form a family. But there came a day when some cases of corruption arose, that there was a black Friday (currency devaluation), a Caracazo (a social outburst), the rejection of political parties. From there everything began all the nightmare that we still live and from which we did not wake up. In conclusion: we were happy and we didn't know it. Excellent report as always, @dedicatedguy. Thanks always to @adsactly for sharing these works that speak of the crisis of my country.

Yes Nancy, I invite you to check what Angel Garcia Banch has been saying for a few months on his twitter account.

This old video also has useful information regarding Venezuela's past:

I have read this post with great interest, because I think it is very valuable that people, perhaps very distant geographically from Venezuela, show their solidarity and opinion with such lucidity about the crisis we live in my country and its causes and complications. Thank you @dedicatedguy and also @adsactly.
Indeed, I agree with the criterion that places the origin of this crisis in previous periods of our history. Populism has been an unhealthy inheritance, even from the time of independence; of course, through the various dictatorships and dictatorships, up to the installation of democracy.
The so-called oil rentismo (which also affects other countries) became the "blessing" of the economy and, at the same time, the curse of Venezuelan society. Prominent Venezuelan intellectuals such as Salvador de la Plaza, Uslar Pietri and Pérez Alfonzo warned of this.
The prosperity lived in times of prosperity accentuated populism and rentismo, and when it entered a crisis (which included bipartisanship, a state with institutions that were not very solid democratically), it generated a population that longed for a strong solution. The ideologization effectively managed by the sectors of a backward and resentful left, represented by Chávez and others, had its stellar moment here. The rest has been a repetition of some previous features, plus the performance of the components of that historically failed ideology (statism, concentration of power, authoritarianism, totalitarianism, bureaucratism, economic inefficiency, denial of freedoms, etc.).
Although we have reached a very worrying level -characterized by anomie, social demoralization, the climate of basic survival, mass emigration-, I do not abandon the possibility that the change takes place with the conscious exercise of the social majority against this regime by democratic and peaceful means, with a renewal of the alternative democratic forces and an efficient and determined international pressure.
Thank you for your patience in reading this long comment.

I think it is very valuable that people, perhaps very distant geographically from Venezuela

Thanks for your kind words but I am a Venezuelan living in the country :).

I do not abandon the possibility that the change takes place with the conscious exercise of the social majority against this regime by democratic and peaceful means

I do not agree with that, "democratic and peaceful means" are no longer an option, it could be an option if the current government respected democracy, but it doesn't, it is an international criminal organization and the only way to fix this is by the use of force, which should be happening very soon.

I also invite you to read the reference I included at the end of the article, this is the link

And in a comment below, I answered to nancybriti and shared with her an interesting video about the past of Venezuela, the guy there is Alberto Garrido, which was an expert, if you have the time I am sure you will enjoy reading the document in the link I just shared and the video I shared a few minutes ago.


The only thing I'd like to add here is that there's an 2009 IMF paper publicly available here:
... that links Oil Rent to high corruption rates and a decrease in political rights, particularly when the state is the dominant party in oil production.

I've thought about and discussed (in a narrow circle of like-minded people) the effects of petroleum-supported states before, so I'm somewhat embarrassed that I've only found out about the term "Oil Rent" today, but the conclusions drawn in the material you refer to and paper ended up re-enforcing my casual observations.

I wonder what other systems of state-owned wealth production can this be applied to? All of them?!

Posted using Partiko Android

That's a wonderful paper thanks for sharing it!

I wonder what other systems of state-owned wealth production can this be applied to? All of them?!

Most likely yeah, I don't think governments should be producing wealth, that should be only for the private sector.

It saddens my heart to hear about this evil in a wonderful country like Venezuela, indeed like you pointed out a lot of people even from Africa especially Nigerians loved to go there in search of greener pasture.. Although i haven't been to Venezuala before, but the story is very similar to what is happening to my own country Nigeria.

The other countries who are supposed to defend freedom are not making moves they are either quite or they are expecting something in return before they help out.

I wish and pray for peace amongst you all, let us live in peace and unity, that is what matters.

The other countries who are supposed to defend freedom are not making moves they are either quite or they are expecting something in return before they help out.

It is all up to them, the Venezuelan problem can only be fixed if those other countries start to take proper actions.

I really feel for the people of Venezuela. It's obvious that they are facing such situations due to what they caused by themselves. We must learn as human to think extremely before we act. The government we feel to know due to there positive impact isn't really the government we know, if we knew there intentions and plans. Now it's only some countries that can help Venezuelans come out of this situation but which country would it be, I don't think it's so going to be possible because the government have various ways in hiding there criminal acts. Only God can save.

the government have various ways in hiding there criminal acts

Every country is aware of the crimes from the Venezuelan government, they can't hide anything.

Now it's only some countries that can help Venezuelans come out of this situation but which country would it be

Colombia, Brazil and of course, USA.

Venezuela is a republic with a long history. The process of economic, cultural and social development was going on very rapidly in it. In the course of this development, Venezuela has repeatedly attempted to free itself from the suffocating grip of world imperialist vampires, sucking and sucking from this neocolony of juices and resources. In addition, each time the republic attempted to rise and free itself, with the active participation of external forces, it was overthrown, jammed, the progressive forces in the course of constantly repeated coups were replaced by another dictatorship that satisfied foreign owners and fulfilled the cannibalistic demands of the IMF. Then the progressive forces rose from the ashes again, striving for national independence and a more equitable arrangement, the rise began, and everything repeated from the beginning.

Venezuela has repeatedly attempted to free itself from the suffocating grip of world imperialist vampires

Right now Venezuela is trying to free itself from the horrible influence of the worst ideology there is in the world. I think it will succeed and soon enough we will see Venezuela as a free and prosperous country once again.

Venezuela can be a good country, it only needs a government that respects freedom, especially economic freedom.

This post has been found valuable and upvoted by El surtidor

Great post. All I just hope is for all this Venezuela crisis should just end because I don't like it. They should find something to do to it quickly

Posted using Partiko Android

Thank you for your valuable post.
It is sorrow news of Venezuela crisis.
Need to be good solution.

Can I just say that this story resonates with a lot of countries in the past. When countries focused on proper law and order, which control on inflation and making sure the economy was working effectively making the lives of normal people around them prosperous.

However once greed or should I say corruption seeped into the hearts of politicians it changed a lot of things. The middle east you're seeing right now was because of the Oil. Libya in 1990s and early 2000s was one of the best middle eastern countries to live in and prosper. This all changed when Gaddafi tried to trade the Oil in gold instead of the dollar, then he was assassinated.

This current venezuelan crisis could be a culmination of various hidden plots and conspiracies brought to fruition. Whenever there is Oil involved there will always come crisis and political instability, because it has always been the Black Gold.

Whenever there is Oil involved there will always come crisis and political instability

Not necessarily, in Norway there is a lot of oil and the result is that Norway has the biggest investment fund in the world. Oil can be used to improve countries, what is needed is responsible people.

Chavez, whose talk frequently drew motivation from Simon Bolivar, the Venezuela-conceived progressive of the nineteenth century, intended to adjust Latin American nations against the United States.

He drove the arrangement of ALBA, a coalition of communist and liberal Latin American governments, and built up the Petrocaribe partnership, in which Venezuela consented to send out oil at marked down rates to eighteen Central American and Caribbean states.

Chavez, a previous military officer who propelled a disastrous overthrow in 1992, was chosen leader of Venezuela in 1998 on a populist stage. As an applicant, he railed against the nation's elites for broad debasement, and swore to utilize Venezuela's immense oil riches to diminish destitution and disparity.

Amid his administration, which kept going until his demise in 2013, Chavez confiscated a large number of sections of land of land and nationalized several private organizations and remote possessed resources, including oil ventures kept running by ExxonMobil and ConocoPhillips.

Chavez confiscated a large number of sections of land of land and nationalized several private organizations

Yes, and that was a great mistake.

Chavez likewise significantly extended the forces of the administration. Not long after he took office, voters endorsed another constitution that enabled him to keep running for another term, expelled one council of Congress,..

and lessened regular citizen command over the military. In 2004, two years after he was quickly expelled from office in an overthrow, Chavez successfully took control of the Supreme Court by extending its size and selecting twelve judges. In 2009, he drove an effective choice consummation presidential term limits.

Venezuela is amidst an uncommon monetary and political emergency set apart by extreme sustenance and prescription deficiencies, taking off wrongdoing rates, and an inexorably dictator official. Commentators of President Nicolas Maduro and his forerunner, Hugo Chavez, say Venezuela's financial hardships are the product of long stretches of monetary botch; Maduro's supporters accuse falling oil costs and the nation's "degenerate" business elites.

KkIn 2016, resistance legislators took a dominant part in the council—the National Assembly—without precedent for almost two decades. In any case, the Maduro government has made strides since to unite the president's capacity, holding vigorously debated decisions to supplant the lawmaking body with a constituent get together included completely of government supporters. Maduro's activities, which have been met with gigantic challenges and global judgment, debilitate to delegitimize the aftereffects of the 2018 presidential race.

Coin Marketplace

STEEM 0.15
TRX 0.03
JST 0.024
BTC 13549.22
ETH 391.50
USDT 1.00
SBD 0.97