Making of a crash

The Venezuela problem

         **A disaster in foreign policy**

The Merriam Webster dictionary defines foreign policy as “the policy of a sovereign state in its interaction with other sovereign states.”With this in mind, the goal of this report is to look at the political instability, humanitarian crisis and economic problems of Venezuela while putting them into historical context as well as how to address these problems.

To fully grasp the political instability of today, one must first see what Venezuela was in its most stable time. The 1970s were boom years for oil, during which Venezuela was a bastion of capitalism and the material standard of living for all classes in Venezuela improved. This is due to the rise of two new political parties the AD (Democratic Action) and the COPEI (Social Christian Party) these parties started to use the government huge oil revenues for small social programs and subsidies. In this period Venezuelan workers enjoyed the highest wages in Latin America and subsidies in food, health, education, and transport. But in the early 1980s, a leftist group in the military called the Movimiento Bolivariano Revolucionario 200 (MBR 200), headed by Hugo Chávez first came to national prominence when they attempted a coup on the president at the time Pérez in February of 1992. The following year Pérez was impeached for illegal using government money to help fund Violetta Chamorro bid for president of Nicaragua. This caused lasting political instability which trickled into the election of 1998. Where Hugo Chávez won on a platform of reclaiming the oligarchy for the government and greatly improving the many social welfare programs of the nation.

As president Hugo Chávez turned the country of Venezuela into a petrostate by taking over all of the petroleum producing companies and having them become government entities. As a petrostate, Hugo Chávez was able to implement all of the welfare programs he promised. During Hugo Chávez's time in power, corruption has become widespread throughout the government due to impunity towards members of the government, bribes and the lack of transparency. All this corruption came to the forefront in 2004 when Hugo Chávez and his allies took over the Supreme Court, filling it with supporters of Chávez and made new measures so the government could dismiss justices from the court. With the courts on his side, Hugo Chávez was given unlimited power and recourse to push his agenda. With this unlimited power, Hugo Chávez spent. $22.5 billion of public funds from the governments account to personal accounts of himself and his political alliance

As well as misuse of government funds from the time of Chávez presidency to today Venezuela has incurred many economic problems. Most of these problems are due to the nation's dependence on oil exports. Venezuela is the world's tenth largest exporter and the thirteenth largest producer of oil. Shipments of oil account for 96 percent of total exports. With most of Venezuela exports coming from oil, a trade deficit (more imports than exports), overprinting of money and decreasing oil prices the Venezuelan economy has become a hotbed for inflation. With more money than ever and huge debts to pay the currency has had inflation rates of nearly 80,000% a year.
This figure can be seen from a Bloomberg study showing the increasing CPI (The Consumer Price Index: a measure of the average change over time in the prices paid by a citizen of a nation for a basket of goods a great indicator of inflation) of Venezuela and how the price of a cup of coffee has gone for 600 bolivars to 5500 a cup. This inflation has destroyed the Venezuelan economy and caused many people to become homeless and live way below the poverty line. According to a UN report, about 90 percent of the population lives in poverty.

With all this poverty and corruption there has been much humanitarian crisis. In 2013 Hugo Chávez passed away and his successor the vice president Nicolás Maduro. Maduro took over for Chávez as interim president until a further election was held. An election was held and Maduro won the popular vote by 1.5%. Maduro was sworn in as president on 19 April 2013. Opposition leaders in Venezuela delivered a May 2016 petition to the National Electoral Council (CNE) calling for a recall referendum, with the populace to vote on whether to remove Maduro from office. Days later the Venezuelan government arrested 7 of the leaders calling for this recall referendum. Since this recall was announced many political protests have occurred. These political protests have been violently disbanded by the government and many of the protesters have been arrested, kidnapped or killed without trial. A 2018 Amnesty International report "accused Nicolas Maduro's government of committing some of the worst human rights violations in Venezuela's history,'' according to VOA news The report found the violence was carried out especially in Venezuela's poor neighborhoods and included "8,292 extrajudicial executions carried out between 2015 and 2017". Maduro has also been profiting from the food shortages in Venezuela. The government-operated Local Committees for Supply and Production (CLAP), which provides food to poor Venezuelans, made contracts with Group Grand Limited, an organization owned by Maduro through front-men. The Group Grand Limited sells foodstuffs to CLAP and receive government funds, enriching Maduro and his associates.

With the economic crisis, grotesque violations of human rights, and political instability Venezuela is in dire need of restructuring and rebuilding. I believe the United States as the lone superpower in the northern hemisphere as well as following the precedent of the Monroe Doctrine and the Roosevelt Corollary it is our duty to help Venezuela. These precedents give the united states the duty and the right to assist the people of Venezuela to overthrow the present regime.

How to fix this

I believe the best way to set Venezuela on the road to becoming a becoming a self-governed and independent nation is to follow in the footsteps of the Egyptian peoples' revolution of Mubarak in Tahrir square. The difference between the Egyptian revolution and my proposed revolution by the people of Venezuela is that the United States military will stand with them in front of the presidential palace so if Maduro tries to violently disband these protest there will be foriegn ground support. The revolution in Egypt prior worked under similar circumstances because of a critical mass of the citizens stood up to the oppressive regime to put the power back in their hands. I believe with such a large amount of the Venezuelan population living in poverty an incredible number of people would stand up to peaceful reclaim their government. Once the nation of Venezuela is back in the hands of the people I believe the UN should set up a truly democratic election as well as slowly move Venezuela from a socialist nation to one of free market capitalism. A capitalist system would greatly benefit Venezuela because it would spur competition in the nations already massive oil sector as well as providing many new and different industries for people to work in. New emerging industries and increased competition would greatly increase the employment rate and jumpstart the economy. The central bank of Venezuela should do a sort of buyback program with the Bolivar and create a new currency. This creation of a new currency void of inflation pegged to an already circulating currency for the time being. This new currency that is based on another currency would both give the Venezuelan people trust in the currency as well as eventually give the currency the ability to appreciate and depreciate based on supply and demand. This new currency would give the central bank of Venezuela the ability to enact expansionary monetary policies without the risk of inflation and put trust back in the banks. These expansionary monetary policies are the best of both worlds by helping feed demand as well as increase interest rates spurring foreign investments. Even though this plan has never been tried before the economics behind it are logical.
Venezuela is a nation with a corrupt past I feel can still have a bright future if they remove Maduro from office as well as any of my other recommendations. A nation with such an uncertain future like Venezuela a statement they can look to for hope Is the classic wall Street sentiment “Past performance is not indicative of future results” and this is true with Venezuela they shouldn't let their rocky past determine their future.