The mounting crisis in Venezuela is entering a new chapter as President Nicolás Maduro’s plans to rewrite the constitution face a pivotal vote.
On Sunday 545 seats in the new Constituent Assembly will be decided. The winners would essentially replace the current National Assembly, which is controlled by Maduro opponents – who have called for a boycott of the vote.
For months, opponents have taken to the streets to voice their frustration with Maduro’s government. More than 100 people have died in connection with bloody protests. Chaos has consumed this country of astonishing natural beauty – one that also possesses the largest proven oil reserves in the world. How did a potential paradise become so lost? Here are a few answers:
Plummeting oil prices put economy in reverse
Oil revenue fueled Venezuela’s economy under former President Hugo Chavez. When oil was $100 a barrel, billions flowed through the state-owned petroleum company and were siphoned off for social programs and food subsidies. But when oil prices fell dramatically, those massive subsidies became unsustainable.
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The flow of dollars slowed to a trickle
Crashing oil prices also left the government with less foreign currency to buy goods from other countries. Venezuela’s imports are down 50% from a year ago, according to Ecoanalitica, a national research firm. Now there are critical shortages of essential imports, including vital medicines.
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Price controls are just another problem
Under Chavez, the prices of key items were slashed so that everyone could afford them. The official price for a bag of cornflour, used in the national dish arepas, is 639 bolivares. That’s affordable for many people – but the price of flour is below the cost of production. Domestic producers have stopped making cornflour.
Country down to its last $10 billion
Venezuela has less than $10 billion in foreign reserves, according to data from the Central Bank of Venezuela published in July. CNNMoney reported earlier this year that the country had just $10.5 billion left. For the rest of the year, it will owe roughly $5 billion in outstanding debt payments. The financial clock is ticking.
Venezuela has lowest reserves in over 20 years
The ‘Maduro diet’
Rampant inflation has meant more people are skipping meals, and the percentage of malnourished Venezuelans is growing rapidly, according to an annual national survey by three of the country’s major universities and other research groups.
Many have dubbed this phenomenon the “Maduro diet,” a reference to the embattled President, who has said that doing without “makes you tough.”
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Pain turns to rage – and protest
The country has been riven by violent protests for months as opposition leaders face off with Maduro supporters.
Anti-government protesters want Maduro to step down, accusing him of eroding democracy. Maduro, meanwhile, has sent the Venezuelan military onto the streets to maintain order.
Crisis in Venezuela
What’s the government doing?
The Supreme Court dissolved parliament in March, transferring legislative powers to itself. That left the two remaining branches of government controlled by Maduro’s ruling United Socialist Party. The opposition said it was a coup. The court reversed its decision shortly afterward, but protests had already erupted against Maduro. The newly elected body to be decided on Sunday would rewrite the 1999 constitution, the cornerstone of Chavez’s “Bolivarian Revolution,” which ended presidential term limits and allowed for indefinite re-elections.
The government’s interior and justice ministry has banned all protests, starting Friday, saying those who “organize, support, or instigate activities that disturb the holding and functioning of the electoral process” face 5 to 10 years in prison.
The opposition organized a two-day general strike in defiance of the vote.
Maduro critics also held an unofficial vote on July 16 to demonstrate public opposition. More than 7 million Venezuelans – nearly 40% of the voting population – cast ballots against Maduro’s proposals in the nonbinding referendum. Regime opponents also announced a boycott of Sunday’s vote and said they would refuse to recognize its results.
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What’s it like to live like this?
The impact of the country’s problems are all too obvious to most Venezuelans.
- Shortages of food and home staples such as milk, flour and toilet paper
- Shortages of medicine
- Rolling blackouts
- Rising unemployment
- Soaring violent crime
- Even malaria, once almost eradicated, is back on the rise.
CNN’s Rachel Clarke, Pete Burn, Rafael Romo, Marilia Brocchetto, Mariano Castillo, Patrick Gillespie, Osmary Hernandez, Deborah Bloom, Natalie Gallón and Gizela Crespo contributed to this report.