In 2019, US allies
and the opposition
failed to replace
the Venezuelan government
How did Maduro survive? Can he repeat it in 2024?
July 26, 2024
In May 2018, Nicolás Maduro was controversially re-elected as president of Venezuela.
Major international players, especially the United States and the European Union, the immediate neighbours of Venezuela and many other states did not recognise the results.
However, 16 countries have recognised Maduro as a legitimate president, including China, Russia, Iran, North Korea, Bolivia and Turkey (a NATO member).
The National Assembly's speaker Juan Guaidó declared himself "interim president", claiming that Maduro's re-election was not valid and therefore the presidency was vacant.
The US introduced financial sanctions in 2017, worsening and prolonging the economic crisis in Venezuela.
In April 2019, Guaidó called for a military uprising to replace Maduro.
Opposition leader Leopoldo Lopez was released by the head of the secret police in an effective betrayal of Maduro.
However, key political figures such as heads of the supreme court and the armed forces did not join the coup as it was supposedly agreed.
The 2024 presidential election is set to take place this week on July 28 in a simple majority-wins vote.
Background
Venezuela is a country of 30 million people on the northern coast of South America.
It holds the largest known oil reserves on the planet and until the current crisis depended on oil for over 90% of its export revenue.
Venezuela enjoyed 40 years of democracy from 1958 to 1998, with a centre-left and a centre-right party alternating in power.
During this time, Venezuela nationalised the oil industry by creating PDVSA – a state-owned petroleum company – eventually growing it into a large and successful international enterprise.
The new constitution separated legislative, judicial, and executive branches of government, allowing for well-functioning state institutions.
1998 – Venezuela elects a new president – Hugo Chavez, a career military officer who led a failed coup attempt in 1992. He created a left-wing Socialist party, promising wealth redistribution to the poor and large government spending on social programs, funded by oil revenue.
Chavez managed to provide subsidised goods and services to the Venezuelan people, cutting the poverty rate by around 20% from 1998 to 2008.
Chavez successfully mobilised and empowered marginalised Venezuelans. Communal Councils initiative created around 20,000 local councils running community projects.
By 2011, Venezuela had the most equal income distribution in South America.
However, Venezuela failed to use its oil reserves and growing oil prices to achieve sustainable long-term growth and a stable economy.
By 2012 it ranked 126th country out of 144 in economic competitiveness.
During Hugo Chavez’s presidency, state-owned PDVSA turned into an inefficient and corrupt institution, managed by Chavez’s loyal allies.
Share of crude oil in total exports rose from 71% in 1998 to nearly 98% in 2013.
As oil prices jumped from around $20 per barrel in 2002 to almost $100 in 2012, Venezuela’s economy grew by around 300%.
However, neighbours like Brazil, Argentina or Colombia also saw their GDP increase by 4 to 5 times in this period but did not experience Venezuelan inflation problems and oil dependence.
Some of Chavez’s ambitious programs were ineffective due to economic mismanagement and corruption, resulting in a mix of well- and poorly working public services.
2002 – After replacing the management of PDVSA, Chavez was removed from power for 47 hours by the military, accused of an authoritarian power-grab. He was reinstated due to popular support.
2004 – Chavez survived a referendum on removal from office with 59% of the vote, after the opposition gathered over 2.4 million signatures to initiate it.
Chavez died from a cancer-related heart attack in 2013.
2013 – Chavez's right-hand man Nicolás Maduro was elected president in a controversial election.
Maduro got 50.62% of the votes while his rival from the democratic opposition received 49.12% of the vote, officially.
With reports of electoral irregularities and fraud, the results were contested and not accepted by the opposition, sparking popular protests in which 11 people have died.
2014 – Global crude oil prices begin dropping (you can find out more in our “Oil geopolitics” report).
Falling oil revenue pushed Venezuelan economy into crisis. Maduro’s government printed money to meet its spending needs, triggering extreme inflation of prices (see economics section below).
December 2015 – in the National Assembly elections, opposition wins 65% of the seats.
After the election, in the last days in charge, the outgoing parliament loyal to Maduro quickly passed new laws and replaced 13 out of 32 Supreme Court officials, in a widely criticised move.
March 2016 – Supreme Court rules to strip the National Assembly of its powers, new wave of mass protests erupts and the decision is reversed.
The opposition battled Maduro, trying to initiate a recall referendum and establish a parallel Supreme Court.
In 2016 and 2017 over 15,000 protests were held in Venezuela, with largest gatherings in Caracas surpassing 1 million protesters on multiple occasions. 176 people have lost their lives in violent clashes.
Government forces have been using firearms, chemical weapons, and non-lethal bullets against protesters, as well as torturing detainees and employing the help of violent paramilitary groups knows as “colectivos”.
In April 2017, out of 33 protest-related deaths, 16 were attributed to looting in Caracas, 7 were caused by authorities (of which 5 from firearms), 6 more were attributed to pro-government “colectivos”, while 4 were caused by unknown individuals.
July 2017 – Maduro holds a vote to elect a National Constitutional Assembly – a new institution with powers to make laws and change the constitution, replacing opposition-controlled National Assembly.
Maduro’s Socialist party gained complete control over legislative, judicial and executive branches of the government, as violent protests continued.
The National Constitutional Assembly was disbanded in 2020 after Maduro’s party secured a majority in the National Assembly, as the opposition boycotted the latest elections.
US administration, led by freshly elected president Trump, introduced tough economic sanctions on Venezuela to pressure Maduro out of power by restricting his access to US financial markets.
2018 presidential election
In May 2018, Maduro was controversially re-elected as president of Venezuela.
These elections were widely criticised, with reports of electoral fraud, vote buying and coercion.
The country’s main opposition coalition, the Democratic Unity Roundtable (MUD), boycotted the election as popular opposition leaders were banned from running in the vote, while many were imprisoned.
Turnout for the election was officially 46.1%. Turnout for the 2013 presidential election, after the death of Hugo Chavez, had been 80%.
The National Electoral Council of Venezuela was accused of favouring Maduro, including by lowering turnout, such as by complicating voter registration.
The Global Observatory of Communication and Democracy estimated that at least 1,769,035 eligible young voters (over 5% of the population) were not registered by December 2017.
On election day, the main opposition candidate Henri Falcón, who officially received 20% of the vote, stated that there had been widespread vote buying and electoral irregularities.
He declared that he would not recognise the result and called for a new vote.
Major international players, especially the United States and the European Union, as well as the United Kingdom, Canada, Mexico, Chile, Argentina, Brazil, Australia, the immediate neighbours of Venezuela and many other states did not recognise the results of the 2018 elections.
However, 16 countries have recognised Maduro as a legitimate president, including China, Russia, Iran, North Korea, Bolivia and Turkey (a NATO member). Many states, especially in Africa and South-East Asia, did not give a position on the matter
2019: attempt to overthrow the government
Maduro was inaugurated as president in January 2019.
However, Venezuelan opposition continuously fought back against the results of the elections.
The Socialist party controlled the executive and the judiciary - which left only one institution for the country's opposition to rally behind - the National Assembly.
The National Assembly's speaker Juan Guaidó declared himself "interim president", claiming that Maduro's re-election was not valid and therefore the presidency was vacant.
Guaidó initially received support from large parts of the international community, including Venezuela’s neighbouring states, who called for Maduro's exit.
Maduro's government insisted that the crisis was an attempted "coup” led by the US trying to replace Venezuela's government and gain control over the country’s oil reserves.
As the economic and social crisis in Venezuela deepened, Guaidó and Maduro contested each other for power.
US introduced further economic sanctions in January 2019, particularly on Venezuelan oil sector, to pressure Maduro to resign.
In April 2019, after months of secret negotiations involving Maduro’s allies and Trump’s administration, Guaidó called for a military uprising to replace Maduro, but the plan failed.
Key opposition leader Leopoldo Lopez was released by the head of the secret police in an effective betrayal of Maduro. This was supposed to serve as signal that top officials are about to abandon Maduro.
The coup was supposed to coincide with popular protests and an invasion of pro-opposition Venezuelan troops from Colombia.
However, as the day unfolded, key political figures such as heads of the supreme court and the armed forces did not join the coup as it was supposedly agreed.
It is unclear what negotiations took place between them and Maduro and why they ultimately abandoned their plan to defect, or if they were prepared to do so in the first place.
US then-Secretary of State and ex-director of the CIA Mike Pompeo, claimed that Maduro’s plane had been ready to takeoff for Cuba, but that he had been persuaded not to leave by the Russian side.
In March, Russia sent 100 military personnel and 35 tons of equipment to Venezuela in a show of support for Maduro’s contested presidency. Venezuela has long been a close military partner of the Russian Federation.
It is believed that the Trump administration was not aware of the specific day of the uprising and displayed public discontent with how Venezuelan opposition handled it eventually.
The following month talks were held between Maduro and Guaidó factions sponsored by Norway. However, they quickly broke down as the opposition insisted on presidential elections held without Maduro remaining in power.
In early 2020 Guaidó faced an internal challenge during an election for the presidency of the National Assembly.
His rival, Luis Parra, declared himself president of the National Assembly - a move which was welcomed by Maduro’s government. However, during a separate session Guaidó was re-elected by 100 of 167 deputies.
Guaidó also started to lose support from other countries, despite going on an international tour.
In 2019, 96% of the Venezuelan population lived in poverty, with almost 80% in extreme poverty.
By 2020, Venezuelan annual GDP per capita was $1,567, down from $12,688 in 2012.
In December 2022, the majority of opposition parties withdrew their support from Guaidó and dissolved his "interim government".
Economic crisis and US sanctions
As the crises in Venezuela worsened, official organisations stopped releasing information on some key economic indicators, making it harder to assess the economic situation.
For instance, in 2014 the central bank did not publish its scarcity index of items missing from shops, as necessities like flour or toilet paper were in short supply in many regions.
Beginning in 2013, the ongoing economic crisis in Venezuela grew into one of the most severe and long-lasting in history.
There are many reasons for this, especially (1) economic mismanagement under both Chavez and later Maduro, (2) sharp decrease in global oil prices in 2014-16 and (3) US economic sanctions introduced in 2017, 2018 and 2019.
By the time Chavez died in 2013, Venezuelan economy was already performing poorly, despite a decade of high oil prices.
Massive social programs were inefficient and needed a lot of government spending, which increasingly relied on oil.
One state-owned corporation, Fonden, received $100 billion of Venezuelan oil revenues since 2005, spending much of it on incomplete or failed projects, Reuters found in 2012.
Price and foreign currency controls created shortages of goods and an uncertain business climate.
Since 2008, Chavez’s government ran an ever-increasing budget deficit, which reached 15.6% of GDP by 2012.
Inflation grew to 50% in 2013, worsened by the government resorting to printing money to fund its spending commitments.
In 2012, the World Bank predicted that Venezuelan economic growth would slow down from 5% to 1.8% in 2013.
Chavez’s death and the transition of power to his ally Maduro worsened the situation and the country’s GDP began shrinking by the end of 2013.
In 2014, global oil prices fell dramatically by around 50%.
Maduro’s government had huge spending commitments as Venezuelan population largely relied on it for work, food, necessities, healthcare and housing. However, the key source of revenue – oil exports – was now shrinking.
Oil prices stayed low for the next years.
Venezuelan government printed money and spent its reserves to make up for the budget deficit.
Increased amount of money in the economy pushed up prices further and by 2014 Venezuela had the highest inflation rate globally.
In 2016 it reached hyperinflation, meaning that prices were growing so fast, that money lost its value in a matter of days.
In this situation, people tried to spend all their bolivars as soon as possible and switch to dollars for buying goods, as its value is stable. However, they still relied on local currency to buy state-provided goods.
By 2016, 82.8% of Venezuelans lived in poverty and 50% - in extreme poverty, compared to 33% and 11% in 2013.
Between 2013 and 2017 political crisis and violence in Venezuela escalated.
In 2017 US introduced their first economic sanctions on Venezuela, restricting access to US debt and financial markets, pressing Maduro to transfer power to the democratic coalition that won a parliamentary majority.
US sanctions were expanded in 2018 and 2019, worsening and prolonging the economic crisis in Venezuela.
At this stage, Venezuela could not sell large volumes of its oil even at low market prices due to sanctions and economic collapse.
Center for Economic and Policy Research (CEPR) found that US economic sanctions implemented since August 2017 had caused tens of thousands of deaths and "rapidly worsened" the country's humanitarian crisis.
However, most of the deterioration in living standards occurred before 2017.
In 2019, inflation rate exceeded 300,000% year on year. From 2016 to 2019, the bolivar lost 99% of its value every 12 months.
By 2020, Maduro abandoned some of Chavez’s socialist policies and liberalised the economy, trying to stabilise it by removing price controls, easing labour laws and negotiating with local businesses.
By 2024, the Venezuelan economy has stopped losing GDP but is still in severe crisis.
Oil production revived slightly as some sanctions and their enforcement was relaxed.
Refugee crisis
Catastrophic economic crisis in Venezuela beginning in 2013 resulted in the largest refugee crisis in the Americas.
It is also one of the largest humanitarian crises in history that did not involve an ongoing war, although Maduro’s government has threatened to annex the majority of neighbouring Guyana, rich with oil reserves.
Other causes for the refugee crisis include political repressions and violence, degradation of the rule of law, and lacking access to healthcare, as well as rising crime and murder rates.
In 2023, there were over 7.7 million Venezuelan refugees and migrants worldwide, or over 20% of the country’s population.
Most refugees are hosted by Colombia – 2.9 million, followed by Peru with 1.5 million and the US with 545,000. Brazil, Chile and Spain also host around 500,000 Venezuelan refugees each.
60% of refugees, or almost 5 million people, lack food, shelter, healthcare, education, and formal employment, despite efforts by host countries to integrate them into state support systems.
Coming up to July 28th presidential election
In 2023, opposition parties chose former lawmaker Maria Corina Machado to take on Maduro in the upcoming presidential election due to be held this week, on July 28.
However, Machado was banned by the Venezuelan authorities from holding public office.
The government and the opposition held talks in Barbados and agreed to lay down groundwork for free and fair elections. As part of this agreement Machado was allowed to appeal her ban.
In response to the election deal in 2023, the US eased the strict economic sanctions kept in place by the Biden administration.
In 2023, Venezuelan oil producers saw output rising by 25%.
Maduro’s government in turn freed some political prisoners, agreed to accept flights deporting Venezuelan migrants from the US, and made promises around free and fair elections.
Despite the signs of progress made between Venezuela's government and the opposition, the deal has since fallen apart.
Machado's appeal against her 15-year ban to stand for public office was held up by Venezuela's Supreme Court.
This has led to both sides claiming that the deal is dead.
In April 2024, US re-imposed the economic sanctions on oil, citing that Maduro's government had failed to honour an agreement to allow a fairer vote in elections this July.
Despite the recent return of the U.S. sanctions on Venezuela’s crude production and exports there have been reports that the United States might let international oil companies with existing operations in Venezuela continue pumping crude in the country.
The 2024 presidential election is set to take place this week on July 28 in a simple majority-wins vote.
Edmundo Gonzalez, a low-profile member of the opposition, was named as the presidential candidate to take on Maduro - after Machado was unable to register.
According to the polls, Gonzalez holds an exceptionally large advantage over Maduro of around 30 percentage points, suggesting that he could easily win a popular vote.
However, concerns exist over electoral fraud and the extent to which Maduro’s administration could swing the vote count.
Previously, Maduro significantly outscored the results predicted by local independent polls, although the elections were often boycotted by the opposition, suggesting the difference may not have been a result of fraud.
A win for Gonzalez would bring about huge political uncertainty with potential for historic change, such as a return to democratic governance. However, Maduro’s Socialist party controls the parliament and the supreme court, with plenty of resources to contest Gonzalez as president.
If Maduro wins, a lot for him will depend on the image of the elections and whether the global community recognises or condemns them. A perceived fairness could help lift the crushing US sanctions on the oil industry.
Unfortunately, there is a possibility that political conflict over the results of the upcoming elections will result in civil unrest and violence, as dozens of people have lost their lives during protests since 2013 and thousands have died as a result of the catastrophic economic crisis in Venezuela.
Author WIl Nott
Editor Anton Kutuzov
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