After the death of Hugo Chavez, Nicolas Maduro was elected in April 2013. During his first term in power, the economy worsened & his socialist government was to be blamed for the country's decline, mismanagement, and corruption. Despite his efforts to promote Chavez vision of Venezuela to reduce inequality through implementing important measures like price controls to make basic goods more affordable to the poor, he forced many Venezuelan businesses to halt production because they no longer made a profit, this resulted in various shortages in the country, by 2019 inflation was almost 10 million %, food and medicine were running out and millions of Venezuelans were fleeing the country.
Today, Guaidó, a 35-year-old politician is recognized as the interim president of Venezuela by most western countries putting Maduro’s government in real danger, categorized by the Washington Post as an accidental leader who assumed his party’s mantle at the moment when it suddenly mattered and when Venezuela the oil-rich country on the verge of collapse has been a priority for President Trump! President Maduro didn’t accept this sudden move pressing on the fact that he is still the constitutional president for the second six-year term in office and despite attempts by Guaidó to gain the military allegiance to him, the armed forces have remained loyal to Maduro whose socialist party has also got a firm grip on the electoral body and the supreme court.
With the US sanctions, the Maduro socialist government has become pragmatic, it was obliged to loosen the economic restraints on taxation, boosting in the private exports of everything from oil to chocolate, elite businesses were booming especially those politically connected, imports by private companies overtook those done by the state for the first time in Venezuela’s modern history, half a dozen of Venezuela banks have begun accumulating millions of dollars and euros in cash according to Reuters, this cash came mainly from remittances by the millions of Venezuelans who have left in recent years, those who have family abroad can now receive and spend their dollar on imported food, also from the OPEC member’s oil and gold sales to allied nations like Russia. Since Trump's administration issued the economic sanctions on Venezuela, Russia jumped into the spotlight with oil deals with the South American nation worth of billions, it is chartering vessels from third parties and hiding the origin of the crude as it is marketed around the world, free from sanctions.
Russia is now the second-largest supplier of crude oil to American refineries, dollars are used in many daily transactions in Venezuela, deserted shopping malls are busy again, new restaurants and bars are opening weekly in the wealthier parts of town, their tables are packed with foreign businessmen, stocked shelves in the supermarkets has also helped ease tensions in the capital, but the boom has also come at a cost, in the poor cities there is still water and electricity shortages, malnutrition and lacking basic services, a ticket to a recent music festival in Caracas did cost $70 a 14 months’ worth of minimum salary, the new free-market economy left half of Venezuelans without access to dollars.
Maduro considers the process of dollarization a good thing to happen but the special US representative to Venezuela Elliott Abrams said recently that the steps that Maduro is taking to sustain the economy under the embargo by dollarizing it is treason against Chavismo, the sanctions are really working.
