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 largely driven by its energy wealth, which is powered by the world’s largest known oil reserves. This oil is important to the U.S. economy, but Venezuela also presents a significant challenge to the United States on other fronts. Over the decades, Venezuela’s politics have become increasingly anti-American, first under Hugo Chavez, a leftist leader who governed Venezuela from 1998 until his death in 2013, and then under his successor, Nicolas Maduro.
Under Chavez, the Venezuelan 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 Venezuelan government lost political support after Maduro, Chavez’s long-time 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 the United States of meddling in its domestic affairs. In 2014, the plummeting price of oil, which is the country’s only major export, drove Venezuela’s economy into further crisis. 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. The United States has also confirmed that terrorist organizations such as the National Liberation Army (ELN) use the rural Venezuelan-Colombian border as a safe haven and drug-trafficking corridor.