Saturday 25 August, 2018 Update: Venezuelan Migrant Crisis Is Exploding

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South American nations are tightening their border controls, and immigration restrictions as the exodus of refugees from Venezuela grows larger. Along with the economic crisis, and the ongoing political unrest around the country, the regime of President Nicolas Maduro now has to contend with regional tensions brought on by a migrant crisis. With chronic shortages of food and medicine now a seemingly permanent facet of daily life for Venezuelan citizens, tens of thousands are fleeing the country in the hopes of finding a better life elsewhere. These departures are not a new development. Since 2014 over two million citizens have left Venezuela.

Neighboring countries are having an increasingly difficult time accommodating them. In Brazil’s northern state of Rorima, violence has erupted when Brazilians attacked the ramshackle camps constructed by Venezuelan refugees, forcing them to flee back across the border. An attempt by Rorima to close the border was thrown out by a judge, leaving the situation unsettled and extremely volatile.  Ecuador, and Peru have taken steps designed to create breathing room, and buy time for a more permanent solution to be found. Both nations have revised their passport rules and border controls. Peru will no longer admit Venezuelans with only an identity card.  Ecuador, on the other hand, has opened a ‘humanitarian corridor’ from its northern border with Colombia to Peru. Venezuelans entering Ecuador will no longer need a passport, and the Ecuadorian government has provided buses for some of the thousands of Venezuelans heading south to find opportunities in Peru, Chile, and beyond.

The Venezuelan government took measures last week to stabilize the economy and eventually lure some citizens back. There is a new currency, the “sovereign bolivar”, which removed five zeroes from banknotes. It is backed by a cryptocurrency, the Petro, which is tied to oil prices. It’s unlikely that the “sovereign bolivar” and Petro will rescue Venezuela from further economic ruin. Oil production is declining, and the government is unable to pay its debts, or obtain more financing.

Until the economy begins to rebound significantly and the country is stabilized, Caracas should not expect the waves of Venezuelans who have left to change direction and return home. At the rate things are going, it will be a very long time before that happens.

Friday 3 March, 2017 Update: Venezuelan Monetary Reserves Diminishing

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Venezuela is rapidly approaching the moment when economic Armageddon becomes a grim reality and there is practically nothing its government can do at this point to reverse course. Data released by the nation’s central bank indicates Venezuela has only $10.5 Billion in foreign reserves left. In 2011 the amount was $30 Billion, and by 2015 that number had diminished to $20 Billion. Venezuela will pay $7.2 Billion to countries it owes debt payments to this year, suggesting that the moment when Venezuela runs out of money entirely could arrive at some point in the near future. The government has promised not to default on its debts, but at the current pace default is a very real possibility.

As the monetary reserves are thinning, hyperinflation has resulted in food and medical shortages that are compounding the everyday trials and tribulations being endured by Venezuelans. Food, and staple goods are becoming more and more scarce. Many hospitals are unable to render more than the most basic care. The sick and elderly are dying in ever-increasing numbers. The crime rate has soared with looting and unrest now the norm in many cities.  As bad as the humanitarian crisis is, the economic crisis that Venezuela is mired in bodes even worse for the nation’s long term fortunes.

An Economic collapse is imminent. Some economists say that it has already arrived and will only worsen as time goes on. My personal belief is that Venezuela is teetering on the brink of collapse, and has been for some time. Conditions have deteriorated at a rapid clip, but it will take something major for the collapse to begin in earnest. Defaulting on its debts will probably do the trick. The moment that happens, the economy will collapse entirely, bringing about a complete and irreversible collapse of Venezuela as a nation-state. There will be a massive exodus of citizens into neighboring countries, potentially causing a refugee crisis like South America has never before seen. Colombia will bear the brunt. Tens of thousands of incoming Venezuelan refugees would tax Colombia’s national infrastructure and act as a potential destabilizing force at a time when Colombia is finally getting its act together domestically.

Internationally, there is little that the world community can do but watch and wait. In the United States the number of Venezuelan immigrants entering the country over the last year has skyrocketed. Now, with the immigration laws and policies about to be restructured, there is concern in the US-Venezuelan community that the number of future immigrants will be limited. Activists in Florida are expected to petition President Trump to exclude Venezuelans from future immigration restrictions as the humanitarian crisis there appears likely to continue and worsen.