Positive news from Venezuela has been rare over the past decade. Headlines have focused on hyperinflation, high crime rates, sanctions, and mass migration. Mismanagement by the Chavist regime and fluctuating oil prices led to one of the most profound socio-political and economic disasters of the 21st century. Millions fled as the bolivar collapsed and supermarket shelves emptied. Though widely covered, the history and events that led to this disaster remain less known.
The Colonial Era
Christopher Columbus discovered Venezuela on his third voyage in . Only 25 years later, Spain established its and soon dominated most of present-day Venezuela. Like other colonized societies, the colonizer oppressed the native population.In the early 19th century, the democratic revolutions in Europe and North America influenced South America. Between 1808 and 1826, most of Latin America was independent. Distracted by the , Spain struggled to control its far-flung territories.Venezuela declared on July 5, 1811, but fighting for another decade as Venezuelan forces battled the remaining Spanish royalists. Simon Bolívar, known as “El Libertador,” led the independence movement in most of South America. After winning the in 1821, Bolivar and his forces liberated Caracas and most of the country. Venezuela then joined Gran Colombia, a union formed with modern-day Colombia, Ecuador, and Panama.
Post-Independence Era
Political differences led to the dissolution of Gran Colombia. In 1830, Venezuela became an independent republic, with as its first president. Centralist power quickly crumbled as military leaders, known as ‘,’ fought for authority, dividing the country.After decades of attempts to centralize the country, took power in 1908 through a coup d’état. He ruled with an iron fist until he died in 1935. Venezuela’s economy surged with a discovery that would change the country’s future: crude oil. Discovered in in Lake Maracaibo, Gómez repaid the country’s staggering debt by granting concessions to foreign oil companies.Two dictators succeeded Gómez. In 1945, the Acción Democrática (AD) party briefly democracy through a coup, but it didn’t last long. A military coup reinstalled a dictator in 1948. Ten years later, another coup restored democracy. The major political parties signed the “” power-sharing agreement to ensure stability. This led to a period of political stability and economic growth.In the 1980s, oil price volatility caused economic instability, worsened by corruption. Living standards fell, and inequality fueled public discontent. In 1989, the military violently suppressed protests in Caracas against austerity measures. The government reported 277 deaths during the “”; put the toll up to 3.000 deaths. This disillusionment paved the way for a charismatic figure who would upend Venezuelan politics: Hugo Chávez.
The Rise of Hugo Chávez
The “Caracazo” shattered Venezuela’s image as a stable democracy. Chávez quickly attracted recruits to his clandestine . In 1992, he led a failed coup against President Carlos Andrés Pérez and was imprisoned. Yet, he gained national recognition as he resonated with the society’s desire for change.Chávez was released from prison two years later by President Rafael Caldera and turned from military insurrection to politics. In 1997, he founded the (MVR) with a populist and anti-establishment program. Chávez capitalized on the frustration with traditional politics and economic hardships. The “Puntofijo” pact was also scrutinized, as it promoted an inflexible two-party system between AD and the Social Christian Party (COPEI).Between 1990 and the election year 1998, Venezuela suffered multiple recessions, and the gap between rich and poor widened. During his campaign, Chávez promised to end corruption, reduce poverty, and open the political system to more parties. The media largely supported his campaign. Chávez won of the votes and became the 52nd President of the Republic of Venezuela.
The Early Chavist Era
Chávez wasted no time in reshaping the country’s foundation. In 1999, he called for a referendum to convene a constitutional convention and draft a new constitution. The passed with more than 80% support. Despite opposition blocking it, % of voters approved the new constitution in December 1999. The constitution extended presidential terms from five to six years, allowed re-election, and established new social and economic rights.Chávez prioritized the poor through his social policies, including the “Misiones Bolivarianas” programs later enacted. These programs expanded access to free education, increased funding for public schools and universities, and granted access to free healthcare services in poor and rural areas. Coupled with his charismatic leadership, Chávez’s popularity soared.The new constitution required elections to re-legitimize the government and presidency. Chávez was reelected in 2000 with almost 60% of the vote. To fund his social policies, he needed control of PDVSA, the state oil company, which had been run autonomously by technocrats. In 2002, Chávez brought PDVSA under tighter government control. He executives with loyalists to align the company with the government’s ideology.The changes sparked widespread , with up to one million Venezuelans marching on the streets. High-ranking military officials overthrew Chávez, but the pro-Chávez Presidential Guard seized the palace and reinstalled him two days later.In December 2002, PDVSA went on strike to force Chávez out of office. He responded by firing top managers and employees. During the strike, none of the usual 2.8 million barrels of oil per day were exported. The decreased by 8.9% in 2002 and 7.8% in 2003.
Nevertheless, high oil prices in the early 2000s provided substantial revenue for the country with the largest oil reserves ( of the world’s share in 2024). Living standards improved while poverty declined. But the economy was reliant on its black gold. Investments in other sectors were persistently low, further increasing the dependence. Coupled with high public spending, the economic structure became a ticking time bomb.
The First Cracks in the System
Venezuela shifted its foreign policy toward anti-imperialist alliances and regional solidarity. Chávez built close ties with Cuba, trading oil for medical services, and promoted Latin American unity. His of U.S. policies strained relations with Washington, prompting Chávez to ties with Russia and China, securing vital loans and investments. Relations with the European Union also deteriorated.During his third term, Chávez continued key industries, including telecommunications, electricity, and steel. As a result, private investors pulled back, deepening economic uncertainty. The judiciary and legislature increasingly aligned with Chávez. The media was controlled, and political opponents were intimidated. Allegations of manipulation of electoral processes emerged, and inefficient state-run enterprises worsened the economic decline. The financial crisis of 2008 and reduced oil prices augmented the debt, exposing the first cracks in the Chavist rule.
The Rise of Maduro
Doctors diagnosed Chávez with in 2011, leading to fewer public appearances and raising questions about his succession. Despite his frail appearance, he won the 2012 election with % of the vote. As his health deteriorated, he delegated many responsibilities to Vice President Nicolás Maduro. Before his death, Chávez urged his supporters to back his vice president if he could no longer lead. On March 5, 2013, Maduro that Chávez had died.The following election, held on April 14, 2013, was closely contested. Facing opposition leader Henrique Capriles, Maduro 50.6% of the vote to Capriles’s 49.1%. The opposition challenged the results, citing irregularities, but Venezuela’s electoral authorities upheld the outcome. Maduro inherited a divided country with an ailing economy. And things would soon escalate.
The Venezuelan Crisis
Plummeting oil prices in 2014 exposed Venezuela’s economic fragility. The from over $100 per barrel to under $50 within a year slashed government income and revealed the unsustainability of its economic model.The economic fallout was severe. Inflation hit triple digits by 2015, and the government responded by printing more money to cover deficits, triggering hyperinflation. In 2018, the Central Bank reported inflation at %, while the anti-Chavist National Assembly registered it at ,2%.To curb hyperinflation, the government introduced the “Bolívar Soberano,” cutting five zeros off the old bolívar. The move, however, failed to stabilize the economy, and inflation continued to ravage the country. Inflation remained over 9.500% in and 2.998% in . Venezuela’s GDP plummeted from $372 billion in to $73 billion in .The crisis led to severe shortages of food, medicine, and basic goods. Reliant on imports, Venezuela couldn’t pay for essentials as foreign currency reserves dwindled. Long queues formed in front of empty supermarkets. By , over 90% of households were in poverty or extreme poverty. The healthcare system collapsed, leaving hospitals without supplies and medicines. As a result, preventable diseases like malaria, measles, and diphtheria .
Becoming a True Dictatorship
Nationwide protests erupted as citizens demanded better living conditions and political change. The government’s brutal crackdowns drew international condemnation. The opposition mobilized against the Chavist regime. In January , Juan Guaidó declared himself interim president following a presidential election won by Maduro but considered fraudulent. The United States, European nations, and several Latin American countries recognized Guaidó’s claim.Internationally, Maduro faced isolation and sanctions. The United States, the European Union, and other nations imposed economic sanctions on Venezuelan officials and key sectors like oil and gold. Aimed at restoring democracy, they also hampered Venezuela’s response to the economic crisis. In response, Maduro turned to allies like Russia, China, and Turkey, securing loans and investments in exchange for future oil deliveries.
Mass Emigration and Fraudulent Election Process
According to the UN High Commissioner for Refugees (UNHCR), 7.7 million Venezuelans had fled the country as of November 2023. This mass exodus created a refugee crisis in neighboring countries, with 6.5 million displaced Venezuelans residing in Latin America and the Caribbean.In Venezuela, conditions remain bleak. The government even blocked international humanitarian aid in , citing concerns over foreign intervention. Poverty is widespread, and crime rates remain high. Some economic indicators, however, have shown improvement in recent years.Today, Maduro controls most of the political system. In the months before the 2024 Venezuelan presidential election, the Supreme Court upheld a on opposition leader María Corina Machado, citing her ties to exiled Juan Guaidó. Machado’s chosen successor, Corina Yoris Villasana, was also as she couldn’t register in time due to “technical” errors, leaving the opposition without a viable candidate. Elections will be held on July 28, 2024.
