Crisis in Venezuela

An ongoing socioeconomic and political crisis began in Venezuela during the presidency of Hugo Chávez and has worsened during the presidency of successor Nicolás Maduro. It has been marked by hyperinflation, escalating starvation, disease, crime, and mortality rates, resulting in massive emigration. Food shortages and hyperinflation have largely ended, inflation still remains high.

It is the worst economic crisis in Venezuela's history, and the worst facing a country in peacetime since the mid-20th century. The crisis is often considered more severe than the Great Depression in the United States, the 1985–1994 Brazilian economic crisis, or the 2008–2009 hyperinflation in Zimbabwe. In 2019, the Institute of International Finance called it the single largest economic collapse outside of war in at least 45 years. Writers have compared aspects, such as unemployment and GDP contraction, to that of Bosnia and Herzegovina after the 1992–95 Bosnian War, and those in Russia, Cuba and Albania following the Revolutions of 1989.

In June 2010, Chávez declared an "economic war" due to increasing shortages in Venezuela. The crisis intensified under the Maduro government, growing more severe as a result of low oil prices in 2015, and a drop in oil production from lack of maintenance and investment. In January 2016, the opposition-led National Assembly declared a "health humanitarian crisis". The government failed to cut spending in the face of falling oil revenues, denied the existence of a crisis, and violently repressed opposition. Extrajudicial killings by the government became common, with the UN reporting 5,287 killings by the Special Action Forces in 2017, with at least another 1,569 killings in the first six months of 2019, stating some killings were "done as a reprisal for [the victims'] participation in anti-government demonstrations." Political corruption, chronic shortages of food and medicine, closure of businesses, unemployment, deterioration of productivity, authoritarianism, human rights violations, gross economic mismanagement and high dependence on oil have contributed to the crisis.

The European Union, the Lima Group, the US and other countries have applied sanctions against government officials and members of the military and security forces as a response to human rights abuses, the degradation in the rule of law, and corruption. In 2017, the US extended its sanctions to the petroleum sector. The sanctions blocked global oil exports, paralyzed the Venezuelan economy, froze Venezuelan financial assets and blocked the country's access to international payments systems. According to a 2019 report by Mark Weisbrot and Jeffrey Sachs, sanctions caused Venezuela a loss of $38 billion between 2016 and 2019, prevented the government from resolving the crisis using fiscal and monetary policy changes, and in combination with preexisting negative economic trends resulted in an estimated 40,000 excess deaths between 2017 and 2018.

Supporters of Chávez and Maduro said the problems result from an "economic war" on Venezuela, falling oil prices, international sanctions, and the business elite, while critics of the government say the cause is economic mismanagement and corruption. Most observers cite anti-democratic governance, corruption, and mismanagement of the economy as causes. Others attribute the crisis to the "socialist", "populist", or "hyper-populist" nature of the government's policies, and the use of these to maintain political power.

The crisis has affected the life of the average Venezuelan on all levels. By 2017, hunger had escalated to the point where almost 75% of the population had lost an average of over 8 kg (over 19 lbs), and more than half did not have enough income to meet their basic food needs. 20% of Venezuelans (5.4 million) had left the country by 2021, and roughly 7.7 million people had emigrated by 2024. The UN analysis estimates in 2019 that 25% of Venezuelans needed some form of humanitarian assistance. Following increased international sanctions throughout 2019, the Maduro government abandoned policies established by Chávez such as price and currency controls, which resulted in the country seeing a temporary rebound from economic decline before COVID entered Venezuela. By 2019, as a response to the devaluation of the official bolívar currency, the population increasingly started relying on US dollars for transactions.

According to the national Living Conditions Survey (ENCOVI), 95% of the population by 2021 was living in poverty based on income, out of which 77% lived under extreme poverty, the highest figure ever recorded in the country. In 2022, after the implementation of mild economic liberalization, poverty decreased slightly and the economy grew for the first time in 8 years. At the same time, the reforms intensified inequality, with Venezuela reaching the highest level of inequality in the Americas. Although food shortages and hyperinflation have largely ended, inflation remains high.