A failed state is a political body that has disintegrated to a point where basic conditions and responsibilities of a sovereign government no longer function properly. Likewise, when a nation weakens and its standard of living declines, it introduces the possibility of governmental collapse. Venezuela is well on its way to receiving this undesirable title.
Venezuela holds the largest oil reserves in the world. With such a substantial reliance on oil exports, their economy rises and falls with the oil market. Ironically, this fossil fuel producing nation supplies nearly three quarters of its own power with renewable energy. However, Venezuela’s main hydroelectric dam is now struggling to keep pace with base load requirements due to an intense drought accelerated by climate change; something the sale of oil and resulting release of greenhouse gases only magnifies.
Addicted to Oil
The economic crisis in Venezuela has a number of contributing factors, but the key driver is an addiction to oil. For many years, Venezuela has focused on oil as their major export. The extra heavy crude is an unconventional type found along the Orinoco Belt along the southern strip of the eastern Orinoco River Basin. Under former President Hugo Chavez, oil represented approximately 70% of the country’s exports. Back then, a barrel of oil sat comfortably above $100 dollars a barrel. Oh how times have changed!
When Nicolas Maduro was elected in April, 2013, oil exports skyrocketed and soon represented a whopping 98% of Venezuela’s total exports! When oil prices plummeted last year, the country was hit hard. With their only source of income wiped off the balance sheet in one swift motion, Venezuela began struggling to import basic goods. International media mocked the socialist situation and reported shortages on everything from toilet paper to beer, but this was no laughing matter. Considering the country imports two-thirds of their food, malnutrition and starvation have become a real worry. Further, inflation could hit over 700% this year.
Spending hours waiting in lines at the local supermarket is now common in Venezuela. The lines are monitored by police who are attempting to keep the peace in a very tense atmosphere. Before entering the store, customers must submit to a biometric fingerprinting system which regulates the types of food and supplies they are allowed to buy and how often they are allowed to buy them. In a heartbreaking turn of events, hungry and exhausted citizens may be permitted into the store only to find empty shelves and ever dwindling supplies.
Insult to Injury
If only to add insult to injury, Venezuela is currently experiencing an intense drought due to climate change. It is the country’s worst drought since 1969. This is particularly worrisome because the country relies heavily on hydroelectric dams for power. The Guri reservoir alone supplies over 70% of the country’s electricity. In April of this year, the federal government imposed sharp electricity saving measures in an attempt to halt declining water levels in the reservoir. Daily four hour suspensions of electrical service will occur and vary according to day and region.
The coming days in Venezuela continue to look bleak. With a government showing no signs of stepping down and an angry populace, more conflict is almost certain. Just this week, lawmakers loyal to Maduro pressed treason charges against four opposition colleagues for traveling to Washington, DC and asking the Organization of American States (OAS) to intervene and rescue Venezuelan democracy. If found guilty, the charge is punishable by 20 to 30 years in prison.
What’s clear is that Venezuela’s reliance on oil exports is unsustainable and should be a warning sign to other oil dependent nations. We need to leave the volatile world of fossil fuels, focus on a sharp decrease in greenhouse gas emissions and work together to build strong economies focused on renewable energy research, development and implementation.