When the 14-year rule of the populist President Hugo Chávez came to an end upon his death in 2013, Venezuela was already well down the path to instability. Chávez’s death made way for his handpicked successor Nicolás Maduro who, in stark contrast to Chávez’s cult of personality, many Venezuelans have come to fear and loathe.

The Venezuelan economy – which remains heavily reliant on oil exports – was hit sharply by the drop in global crude oil prices in 2013. Without the same capital to line the public coffers for popular social programs, this exposed the vulnerabilities in the Chávez-era economic policies and set the country on a path towards increased unemployment, poverty and inflation. More focused on consolidating executive power than meaningful reform, President Maduro has pushed Venezuela into a dangerously precarious position – from rampant inflation fueled by food and medical shortages, to increased violence and criminal impunity on the streets.

Venezuela is the third most worsened country in the 2018 Fragile States Index (FSI) and has the highest FSI score for Latin America at 86.2. This year’s score reflects not only the more dynamic pressures which affected Venezuela in 2017 – such as a mass exodus of asylum seekers fleeing the country – but also underlines a deeper trend of state decline in areas such as human rights, rule of law and state legitimacy. Long-term FSI trends across nearly all indicators suggest that without serious reforms to put functioning and representative governance structures back in place, the Maduro administration may not have much of a country or economy left to govern.

Venezuela’s FSI Economy indicator has been steadily worsening for over a decade and 2017 marked the fourth year of a dire economic recession. With 95% of its export earnings reliant on oil, the lack of a diversified economy leaves the country open to external commodity market shocks.[1] Hence, when global crude oil prices went from over US$100 per barrel in 2013, to just US$28 by early 2016,[2] this had a crippling impact on the Venezuelan economy and ultimately its people. There has been soaring inflation, with estimates suggesting the country’s annual inflation rate reached 4,310% by the end of 2017,[3] which has pushed up costs of basic goods and decimated the economy and many Venezuelans’ jobs along with it.[4] This has had devastating impacts on the population, with increased poverty, limited access to basic supplies, and rising child mortality rates.[5]

The financial mismanagement of the Maduro Administration – beset by long-standing cronyism and corruption within the political and military elite – has only served to worsen the crisis. Poorly implemented currency control policies have enabled a black market of U.S. Dollars to flourish, and strict government price controls on items like toilet paper have led to scarcity of such basic goods, as manufacturers withdraw because they cannot sustain production at the prescribed price levels.[6] Emblematic of President Maduro’s approach to handling the crisis, in November 2017 he appointed a loyal military general (who has no experience whatsoever in the oil industry) to head Venezuela’s state-run oil company and the oil ministry.[7] More concerned about maintaining his vice grip on power than actually governing, President Maduro continues to use the security apparatus to control everything from the economy to political dissent.

Under President Chávez and now President Maduro, Venezuela’s civic space and participatory politics has become increasingly constrained. This is reflected in the FSI scores for State Legitimacy, and Human Rights and Rule of Law indicators which both reached scores of 9.0 (out of a worst possible score of 10) in the 2018 Index. Venezuela now shares the same Human Rights and Rule of Law score as Myanmar and Saudi Arabia.

While the trajectory of representative governance has been slowly worsening over the past decade, 2017 was marked by several key events that undermined rule of law in Venezuela. In March 2017, the Venezuelan Supreme Court voted to strip the opposition-dominated National Assembly of its powers, and while the ruling was overturned after international condemnation, President Maduro then moved to hold a sham referendum which dissolved the National Assembly anyway.[8] In its place he has installed a new Constituent Assembly with his loyalists, which is equipped with sweeping government powers including the ability to draft a new constitution. In July 2017, a high profile Venezuelan judge fled the country seeking asylum in Canada, alleging that, among other things, she had been intimidated into signing arrest warrants for President Maduro’s political opponents. Her testimony is now being reviewed by the Organization of American States (OAS) as possible evidence of crimes against humanity to submit to the International Criminal Court.[9]

The FSI indicator score for Security Apparatus also follows the same worsening trajectory as President Maduro uses public security forces to crack down on growing dissent. In recent country reports by Human Rights Watch and Amnesty International, allegations of arbitrary arrests and detention of political opponents, excessive use of force on protesters, inhumane prison conditions and torture are levelled against the Venezuelan Government.[10] Venezuela also continues to have one of the highest per capita homicide rates in the world,[11] and criminality and illicit trade are rampant with policing capacity (and credibility) remaining limited.

The impacts of the dire economic situation and poor governance by the Maduro Administration have been most keenly felt by the Venezuelan population. The FSI indicator score for Public Services continues to worsen, with the health sector in shambles. Reports suggest up to 85% of pharmaceutical drugs are now unavailable in Venezuela,[12] coinciding with spikes in maternal and child mortality, as well as new cases of malaria, malnutrition, and diphtheria.[13] Media reports have also highlighted a lack of water, electricity and surgical instruments in Venezuelan hospitals – not to mention the criminal groups or public security officials that stalk the halls to extort patients and their families.[14] Access to basic food and supplies also remains a daily battle for majority of Venezuelans, as people are forced to queue for hours at supermarkets to get basic price-controlled goods. To make matters worse, these long lines are often targets for criminality, with prospective shoppers often victims of robberies or caught up in riots.[15] Their only alternative for supplies remains the black market, where costly goods are made available largely thanks to corrupt military-controlled food imports.[16]

It is little wonder, with high unemployment, insecurity, poverty and lack of access to basic food, sanitation and health needs, that there has been a rise in people leaving Venezuela to seek shelter from their neighbors. The 2018 FSI score for Refugees and IDPs in Venezuela jumped by 0.5 this year, reflecting the rapid increase in Venezuelan asylum seekers in 2017. In 2014 the UN High Commissioner for Refugees (UNHCR) reported that there were just over 4,000 asylum seekers leaving Venezuela; in 2017 there were over 94,000. This is creating humanitarian challenges for the neighboring hosts – with Colombia, Brazil, Ecuador, Peru and the Southern Caribbean all struggling to absorb the influx. The FSI indicator for Human Flight also worsened by 0.5 this year, reflecting the continued exodus of skilled and unskilled workers to neighboring Caribbean and South American counties, as well as the United States and Spain.[17]

The 2018 FSI scores for Venezuela paint a worrying picture of deterioration of basic governance and state responsibility to provide for its citizens. Despite having the largest oil reserves in the world, overreliance on the commodity has brought the Venezuelan economy into freefall. The Maduro Administration has doubled down on autocratic rule that has become characterized by stifling descent, empowering an increasingly corrupt military, and ignoring the immediate humanitarian needs of millions of Venezuelans. Without swift structural reforms to diversify the economy and lift it out of its recession, everyday life for Venezuelans will only become more difficult as they struggle to get food and basic supplies. The FSI indicator score for Group Grievance is slowly worsening for Venezuela (currently at 7.3) and if conditions worsen in 2018 and beyond, this may increase conflict risk in a country that already has one of the highest homicide rates in the world. Key regional and international partners must play a role in breaking this tailspin, applying pressure on the Maduro Administration to enable immediate humanitarian assistance, enact economic reforms, and bring the opposition back to the table for more inclusive governance and respect for human rights.

1. Council on Foreign Relations. URL at: https://www.cfr.org/backgrounder/venezuela-crisis
2. Trading Economics. URL at: https://tradingeconomics.com/commodity/crude-oil
3. Bloomberg. 2017. URL at: https://www.bloomberg.com/view/articles/2017-12-19/venezuela-is-living-a-hyperinflation-nightmare
4. Reuters. https://www.reuters.com/article/us-venezuela-economy/job-losses-low-wages-add-to-venezuela-economic-hardship-idUSKBN16926M
5. New York Times. 2017. URL at: https://www.nytimes.com/interactive/2017/12/17/world/americas/venezuela-children-starving.html
6. CFR Ibid.
7. New York Times. 2017. URL at: https://www.nytimes.com/2017/11/27/world/americas/venezuela-maduro-oil-industry.html
8. New York Times. 2017. URL at: https://www.nytimes.com/2017/08/02/world/americas/venezuela-election-turnout.html; The Guardian. URL at: https://www.theguardian.com/world/2017/jul/30/fear-of-violence-hangs-over-venezuela-assembly-election
9. International Justice Resource Center. 2017. URL at: http://www.ijrcenter.org/2017/11/07/oas-examines-situation-in-venezuela-for-possible-crimes-against-humanity/#gsc.tab=0
10. Human Rights Watch. 2018. URL at: https://www.hrw.org/world-report/2018/country-chapters/venezuela; Amnesty International https://www.amnesty.org/en/countries/americas/venezuela/report-venezuela/
11. World Bank https://data.worldbank.org/indicator/VC.IHR.PSRC.P5?year_high_desc=true
12. Reuters. URL at: https://www.reuters.com/article/us-venezuela-medicine/venezuelas-chronic-shortages-give-rise-to-medical-flea-markets-idUSKBN1E21J4
13. Reuters. URL at: https://www.reuters.com/article/us-venezuela-health/venezuela-doctors-in-protest-urge-stronger-who-stance-on-health-crisis-idUSKCN1C02NL
14. The New Yorker. 2016. URL at: https://www.newyorker.com/magazine/2016/11/14/venezuela-a-failing-state
15. The Guardian. 2017. URL at: https://www.theguardian.com/world/2017/aug/26/nicolas-maduro-donald-trump-venezuela-hunger
16. NPR. 2017. URL at: https://www.npr.org/sections/thesalt/2017/01/09/508986586/as-venezuelan-go-hungry-the-military-is-trafficking-in-food
17. EIU URL at: http://country.eiu.com/article.aspx?articleid=1335603717&Country=Brazil&topic=Politics; UNHCR https://data2.unhcr.org/en/situations/vensit