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.