My personal view on how the Venezuelan economy collapsed

In the past couple of weeks we have seen social networks flooded with messages of aid from Venezuelans and human rights organizations. Having grown up in Venezuela all this videos and images feel surreal for me, I left my country in 2013 when I felt the debacle was near but I never imagined it would be like this.

Before we continue it is important to state that Venezuela is almost a synonymous of Oil, almost 80% of the GDP comes from oil exports and related products. Venezuela was one of the first countries in the Americas to discover Oil, this of course gave us a great amount of wealth and allowed some right wing dictators to build unseen infrastructure in Latin America. I believe it also made Venezuelans quite arrogant towards neighbouring countries, it was not unusual to hear stuff like “Colombians are all thugs” or “All cleaning ladies are from Colombia or Peru” (oh boy, are we eating our words now!).

I was born in Caracas on the 7th of Febraury 1985, back then Venezuela was as capitalist as they come. Yes we did have free universities and hospitals but apart from that all services where privatized: electricity, communications, transport, etc.

Both of my parents are professors so we did not live a life of luxury but I can remember that we were not poor either. I would say we were middle class: a house, a car and toys to play. We were happy and could get by. I went to a private school and went on holidays once or twice a year, for me I was an average kid. I had friends that were quite well off, most business men who were in the oil business were pretty flashy, had nice cars and went to Miami a couple of times of year (yes, we Venezuelans love Miami).

Carolina Herrera before moving to New York

In 1998 my family moved to England. We lived there almost 6 years until my dad finished his PHD at Sheffield University. So I missed the first years of the Chavez regime, but from what I hear he was elected by more than 60% of the votes and most people saw him as a way out of the “savage capitalism” (yes that is what they called it).

At first, Hugo Chavez focused on pumping the oil prices. An strategy that was also supported by his partners at the OPEC, but it was only until the war on Iraq started that we saw the price of oil rise to unseen levels and the Venezuelan crude was selling above 100 dollars per barrel, with a production of 3 million barrels per day there was around $30,0000,000 flowing in every day and that is without counting derivatives like gasoline (CITGO was a Venezuelan company at the time), plastic, etc.

At that time I was graduating in International Relations from the Central University of Venezuela and I recall Chavez winning every election he went to, it was a state capitalist party. I got a job at the ministry of foreign affairs and was earning good money, as a highlight I remember being sent on a 10 day mission to the U.N and receiving 4,000 dollars as expense money, I was only 25 years old back then and life couldn’t get any better, I didn’t stop to consider that this level of expending was going to crash the economy sooner or later.

As the time went on, I started seeing more and more wastefulness from the government. Cuban teachers, sports trainers and doctors were brought to the country and given special treatment, we were buying all the Caribbean countries with oil to vote for us at the U.N or at other regional organizations, even low ranked government employees had cars and bodyguards, it was insane.

All of this was happening as private companies were leaving the country; they feared that price regulations and increased taxes will make them go bankrupt. Big companies either moved to Colombia, Panama or they closed all together. But hey! We didn’t care we had Oil right? Lots of it, so screw private companies and foreign investors, who needs them?.. Capitalist pigs!

So what happened next?, well you guess it… the price of oil plummet down and so did our econmy. Venezuela was so dependent on oil that when it crashed our currency went down the toilette, our hospitals couldnt get supplies, our universities couldnt pay their professors, well you get the picture. What is even worse is that there is no dollars coming in since oil sales account for only 1/3 of what it once was, so there is no money to import food and no private companies to produce it either. It is by all means a big fat mess!

I left in 2013 and went to Barcelona to study a master’s in Business Administration; for me this was my way out before it all collapsed. I think it was probably the best decision in my life, but I do feel bad sometimes for leaving friends and family behind.

Things didnt get any better when Chavez died in 2013, some people actually celebrate it and thought things couldn’t get worse. But they did!, we got the most stupid president I have ever seen, Nicolas Maduro. Funny thing is he was my boss while I was in the ministry of foreign affairs; he used to buy off the Union with bottles of whisky and a big fat bonuses on December so I already knew how he operated.

And well, the rest of the story is what we are seeing now… violence, hunger a humanitarian crisis at its fullest. Normally when this happens in Latin American countries there is a coup to overthrow the government, so why has did not happen in Venezuela, it’s because they control the military and why do they have the military on their side? … they gave them a free pass on drug trafficking, so there is no way they want a new pro-USA, pro-DEA government in Venezuela.

This is my story and my personal views on Venezuela. Even as I write this on a foreign country I do feel a small sense of fear of retaliation, which is stupid right?.. but I guess living in Venezuela during the Chavez era left a scar on me that it will probably never heal.

#venezuela