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Collapse in Venezuela

Venezuela protest
Venezuelan protest.

“Venezuela is the victim of world media attacks designed to construct a supposed humanitarian crisis so as to justify a military intervention.”

Nicolas Maduro, President of Venezuela, October 13, 2018

2.1 The Issue 

Home to thirty-one million people, Venezuela plays an important role in South America and the global economy. This role is driven largely by its energy wealth, which is powered by the world’s largest known oil reserves. This oil is important to a number of economies, including those of the United States, China, India, and many Caribbean countries. Despite this central role, Venezuela presents a significant challenge to international peace and security. In recent years, political and economic conditions in the country have grown increasingly unstable, posing a threat to the economies and security of its neighbors and trading partners and fueling a growing humanitarian crisis.

Under Hugo Chavez, a leftist leader who governed Venezuela from 1999 until his death in 2013, the government enjoyed years of domestic approval—in part because of its extensive spending on social programs, made possible by high oil prices. But Chavez’s economic policies—such as increasing market interventions and mismanagement of the state-owned energy company—spurred inflation and led to declines in investment and production in the non-oil sectors of the economy.

The government lost political support after Nicolas Maduro, Chavez’s longtime deputy, took over as president in 2013. Maduro’s administration repeatedly responded to challenges by cracking down on dissent. It arrested opposition leaders and accused Western countries of meddling in its domestic affairs. In 2014, the plummeting price of oil drove Venezuela’s economy into further crisis, as oil is the country’s only major export. Meanwhile, crime escalated in many forms that continue today. In urban areas, including the capital, Caracas, kidnappings, murder, and robbery plague both affluent and poor neighborhoods. Terrorist organizations such as the Colombian National Liberation Army (ELN) use the rural Venezuela-Colombia border as a safe haven and drug-trafficking corridor.

Decision Point

NSC Meeting

It is June 2018. Venezuela’s government recently announced that it was unable to make payments on certain foreign loans and was defaulting on them, which triggered an economic collapse. Their money suddenly worthless and food and basic necessities in short supply, protesters stormed Venezuelan government buildings, prompting President Nicolas Maduro to flee the country.

Two members of Maduro’s party have since claimed the presidency, but neither has been able to establish control. Meanwhile, protests continue and factions of the military have abandoned the government. The country’s borders and coasts are patrolled less frequently, and activity by drug traffickers and insurgent groups in those areas has reportedly increased. Petrocaribe, an oil alliance that allows many Caribbean states to buy discounted oil from Venezuela, has collapsed.

Believing that the situation in Venezuela poses a threat to international peace and security, the UN secretary-general has called a meeting of the Security Council to formulate an international response. The response will entail balancing a variety of considerations, including economic stabilization, regional security, a stable flow of oil, protection of human rights, and restoration of democratic governance and the rule of law.

GO TO SECTION 3.1

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