This is the second part of a series exploring the great crisis in Venezuela. Find a link to the first part here: The Great Crisis in Venezuela
Making matters worse
While the Hugo Chavez government gave birth to the hyperinflation just at the cost of popularity among citizens, the Maduro government amplified it manifold. The Maduro government had a huge challenge before itself when it came to power in the year 2014. However, it has since then, instead of living up to its expectations, only led the country and its people down. While several issues were inevitable, the Maduro government joined hands with the military and its allies to ensure it stayed in power. It exploited the inflation and presented it as a lucrative opportunity to the military and its allies to earn hefty benefits out of it. The Presidency of Nicolas Maduro has marked the era of authoritarian rule and has put the democracy to shame.
Silencing opposition and keeping only loyal members in judiciary offices, led to much criticism. The people in opposition to Nicolas Maduro unified and led to the formation of a National Constituent Assembly, where the two-thirds of the member voted to remove him from his office. The President’s response to such kind of criticism was the removal of several Supreme Court judges, only to be replaced by his own loyal officials. The Supreme Court then issued orders to dissolve the existing National Constituent Assembly. Such a move left Maduro with no opposition at all, as he experienced an unprecedented say in the proceedings of the government.
During the existence of the National Constituent Assembly, about 80% of the population had voted in a poll to remove Maduro from his office in the October 2016. After the dissolution of the National Constituent assembly, he had set up his own Constituent Assembly who functioned only on his orders. This assembly was set up at his own discretions. Last time when a new constituent assembly was set up under the Presidency of Hugo Chavez, it was done only after a referendum was held. The referendum asked “should constituent assembly be convened?”, and only after a majority population votes in its favor was the new assembly came to power. This is however, in sharp contrast to the authoritarian move by the present President. The results of the National Constituent Assembly were revealed on 17th July, and the results declared the victory of Maduro. But, the citizens claimed it as a huge fraud.
Most citizens had boycotted that election and only about 3.7 million people had cast their votes. However, the authorities showed a much higher number. After being able to execute the fraud and coming to power, he yet again removed his opposition leader Ortega, and by now, the world could predict the initiation of his neo-authoritarian regime. The United States of America in response to such recklessness of the Maduro government imposed sanctions on him and his allies.
Exploiting the inflation
The populist reforms introduced by Hugo Chavez had led the country into dark days of hyperinflation, as they were not sustainable. They were merely superficial measures which guaranteed his being in power. Conditions worsened after the oil prices dropped drastically from the year 2014 onwards. About 82% of the population under the rule of Maduro government did not have access to basic food and medications.
Official government rates of Venezuelan currency are 10 bolivares for 1 USD. However, what is surprising is that, this exchange rate is accessible only to the allies and friends of Nicolas Maduro. In reality, the Venezuelan currency is almost worthless and the citizens are compelled to exchange their currency in the black market at a rate of 12, 163 bolivares for 1 USD. Daily commodities like grocery and vegetables have prices at around 40,000 bolivares per kg due to the hyperinflation. While the government has introduced new notes to deal with the problem of citizens having to carry huge amount of cash, it has borne little benefit as the old and new currencies were simultaneously available in the market.
To provide lucrative opportunity to his allies and the military which supported him as the President, he has exploited the crisis to cripple the country altogether just to stay in power. The President from 2016 onwards had appointed the military to take charge of the food supplies. The military officials now import food supplies at the official rate of Venezuelan currency exchange of 10:1, and sell the supplies in the black market to the citizens at the rate 12,000:1 to derive massive profits. The annual inflation rates have hit the figure of 80,000%, and analysts have estimated it to reach about 1 million percent by the end of this year. What made the problem worse was the fact that in its infancy, the existence of the issue was blatantly denied by the leaders who so dearly loved their positions that they were ready to plunge a country into such dark days.
Picture Courtesy- AL DIA News