Venezuela Shortages: Past, Present, and Uncertain Future

On July 4, 2016 Nicolas Maduro, president of Venezuela, removed the policy of electricity rationing that had been in place throughout the country for over 2 months. During this time Venezuelans had to subsist without power for 4 hours per day.

Venezuelans have been suffering from many hardships in recent months, including a plummeting economy and food shortages. The limits on using electricity is the latest visible example of the country’s crumbling infrastructure, as well as the growing discord between the government and citizens of Venezuela.

According to Maduro’s government, the El Nino weather system caused a water levels in the Guri hydroelectric dam to drop to record lows. The lack of a sufficient amount of water needed to generate electricity led to the rationing. The government also cut civil servant working hours to 2 days per week to conserve energy, and Maduro actually recommended that women stop using hair dryers as an example of using “wasteful” energy. When implementing the power restrictions in late April 2016, Maduro claimed that Venezuela was “six days away from a collapse, we were facing having to turn off almost the entire country.”

But outrage against the government and its policies is growing as shortages of multiple supplies continue. Critics argue that the government caused the country’s problems through economic and resource mismanagement. They blame the energy shortage on over-reliance of hydroelectric power—about 2/3 of the entire country’s electricity is produced by the Guri dam—and failure to invest in Venezuela’s electricity production system. Beyond power outages, PBS Newshour’s Hari Sreenivasan pointed out that “Venezuelans are struggling with shortages of food, medicine and other necessities, with increasing finger pointing at Maduro’s leadership.”

Several factors have contributed to the current dire situation. Drastic declines in oil prices certainly have had a devastating effect. The price per barrel of oil on the world market has nosedived, dropping by more than half in 2016 from 2014. Oil accounts for about 95% of Venezuela’s export revenue.

But it goes beyond than this. Maduro has continued the policy of price controls on basic goods, such as sugar, milk and flour. Venezuela’s long-time ruler Hugo Chavez (Maduro is Chavez’s hand-picked successor) started this practice in 2003, hoping to make these items continually affordable for the country’s poor. Yet this caused producers of these goods to operate at a loss, and increase reliance on imports. Importing goods drove up prices as well as inflation.

With the weak economy overall subsidized goods disappeared from stores almost immediately after they arrived, increasing prices of basic items even more. The government has accused merchants of charging exorbitant prices to make profits, and people from hoarding goods to resell them on the black market. While the extent to which this occurs is unclear, it has been documented that Venezuelans often wait on lines for hours to buy small amount of basic necessities, riots over food and vandalism of stores are rampant, and many are going hungry.

Caracas resident Kelly Vega commented to the Associated Press, “We are eating two meals a day. If we eat breakfast, there’s no lunch. If we have lunch, there’s no dinner.” A recent Caracas university study found that about 12% of capital residents are forced to a skip a meal, a sharp increase from a few years ago.

So what can be done restore order? Especially if a growing number of people feel the government has caused the current situation, do they have an recourse to force a change? Some groups are committed to removing Maduro from power, it is remains to be seen whether or not they will be successful. In December 2015 opposition parties became the majority in Venezuela’s legislative assembly. They proposed an amendment to the constitution reducing Maduro’s term in office to four years (from six). But this past April the country’s supreme court rejected the proposal.

In May 2016 opposition leaders officially submitted a petition calling for a national recall referendum, which could remove Maduro from power. The petition accumulated 1.85 million signatures. Yet the government agency that oversees elections has not taken any action in response to the petition.

Nicholas Casey of the New York Times said on July 3, 2016 that it is unlikely basic food needs will be met before the end of the summer. Casey continues that it is unclear whether Maduro would accept a recall referendum, though also not assured that new government would do any better at making the necessary amount of food available.

It seems doubtful to me the government would allow a recall to take place. Chavez held an iron grip on power for over a decade, it seems doubtful Maduro would act differently. In the midst of much uncertainty, what does seem apparent is that Venezuela will not be able to rescue itself without help. Whether with a new government or the current one, civil society organizations, NGOs, and food relief agencies could make a significant difference. Though Venezuela has been resistant to allowing outside help in the past, hopefully its leaders can be convinced that the current situation necessitates involvement of other actors.

Venezuela could use help, or else the lights may go out again.