During Vice President Pence’s recent trip to Latin America, he commented on the situation in Venezuela by saying “we’re seeing the tragedy of tyranny play out before our eyes.” In his speech, Pence highlighted the sharp contrast between the U.S. allies and partners he visited – such as Colombia – with the increasingly isolated Venezuela.
For many years, the relationship between Venezuela and Colombia was reversed – with Colombians often fleeing instability and conflict in their own nation for safe harbor in Venezuela. But Colombia’s recent peace deal and economic growth has allowed it to surpass Venezuela in terms of GDP purchasing power parity – and become an increasingly stable American ally.
What Economic Collapse Looks Like. Once the wealthiest nation in all of South America, today Venezuela is a shocking illustration of a humanitarian disaster unfolding in our own backyard. The numbers are staggering. In a nation that holds 18% of the world’s known oil reserves, Venezuela’s GDP has shrunk 35% since 2013. More than 76% of Venezuelans now live under the poverty line, compared to just 52% in 2014. Per capita income has declined by 75% since 2013, and inflation has skyrocketed to nearly 1000% – with the IMF estimating it could exceed 1600% by the end of the year.
Economic conditions have also led to severe shortages of essential goods, making it nearly impossible for millions of Venezuelans to purchase basic food and medicines. Today, 93% of Venezuelans say that they cannot afford the food they need. And on average, Venezuelans have lost an astonishing 19.2 pounds in the past year alone.
Given these realities, it shouldn’t come as a surprise that Venezuelans are rapidly migrating out of the country. Over 1 million Venezuelans have fled into neighboring Colombia– seeking economic opportunity and affordable food– and some 18,000 Venezuelans have applied for asylum in the U.S. in the past year alone. Experts estimate that nearly one tenth of Venezuela’s population now resides outside of the struggling nation.
Why it Matters. With the situation in Caracas likely to worsen, the United States should be especially alarmed at the prospect of a failed state just 1,300 miles from its coastline. Venezuela and the U.S. have long been reliable trading partners. The U.S. remains Venezuela’s largest trading partner, and Caracas’ vast oil resources have made it a key supplier of crude oil for the United States. According to the Department of Commerce, U.S. exports to Venezuela support an estimated 82,000 jobs in the U.S.
The disaster unfolding in Caracas is also closely intertwined with the nation’s political crisis, and is exacerbated by leaders such as President Nicolas Maduro. A recent report by the American Enterprise Institute found that many of Venezuela’s top officials—including Venezuela’s Vice President—are actively involved in transnational criminal organizations with links to money laundering and illicit drug trafficking, highlighting key national security threats to the United States.
Moreover, Venezuela’s economic collapse threatens to destabilize a Latin American region that has been increasingly stable and prosperous in recent years. A Venezuelan refugee crisis on the borders of Colombia and Brazil could greatly erode Latin America’s progress and undercut U.S. allies and interests in the region.
Challenges of Engagement. Making the situation worse is President Maduro’s refusal to accept international assistance. Facing growing unrest domestically, Maduro has resisted international calls to allow aid into the nation. Although Bolivia and Ecuador have also expelled USAID for internal political reasons, Maduro is the latest example in this alarming trend.
Former Secretary of State John Kerry met with President Maduro last year to express concern for the millions of struggling Venezuelans, to no avail, even when a group of Latin American nations, including Chile, Argentina, Peru, and Colombia have all urged Venezuela to accept food aid. As the humanitarian crisis worsens, it is Venezuela’s citizens— not its leadership— who are paying the price for the government’s intransigence.
Looking Ahead. Venezuela’s precipitous decline and growing international isolation call for a strategic dialogue and political resolution. Vice President Mike Pence recently agreed, saying the U.S. must bring “all its economic and diplomatic power to bear” in Venezuela to restore democracy and prevent a failed state.
Yet addressing the crisis in Venezuela is made increasingly difficult by the dozens of senior political vacancies at the State Department. To bring the full weight of U.S. influence, America needs a fully-staffed and fully resourced State Department. Anything less risks making the crisis in our own backyard even worse.
photo credit: AFP PHOTO / JUAN BARRETO