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Forum: ​Security Council Issue: ​The Situation in Venezuela

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Forum: ​Security Council Issue: ​The Situation in Venezuela Forum: Security Council ​ Issue: The Situation in Venezuela ​ Student Officer: Seif Al Shunnar ​ Position: Deputy Chair ​ Introduction Today, a bottle of Pepsi is estimated to cost more than 250,000 Venezuelan Bolivars (Numbeo). This is the result of an economic situation known as hyperinflation. This is the term used to define the phenomenon in which the prices of goods and services rise more than 50% in a single month, resulting in an uncontrollable change of the prices of different items causing a loaf of bread to cost less in the morning than it does at night (Amadeo). This creates a devaluation of the local currency in foreign exchange markets as the costs of products rise. As a reaction of hyperinflation, people start to hoard long lasting products like machinery and jewellery to prevent paying higher prices, and at times may even begin hoarding perishable goods like foods. This practice however results in a repetitive cycle where prices rise, causing people to hoard goods, creating demand for more goods which in turn further increases prices. If hyperinflation is left unattended, it almost always leads to an economic crisis. In fact, hyperinflation often devalues a currency so much that the hosting economy switches to a barter economy (CFI). Going back to Venezuela, hyperinflation has driven the country to a financial collapse. According to economist Steve Hanke, prices had been doubling every 18 days at some point in 2018. Furthermore, a cup of coffee in 2019 had cost 450 Bolivars, while a year later in 2020, the same cup had jumped to 600,000 Bolivars (Papadopoulos). The nation’s resultant th crime has increased to a point where it is now ranked the 20 ​ most dangerous country in the ​ world, surpassing Columbia and Palestine (World Population Review), while being the country with the 3rd highest murder rate in the world with 56.3/100,000 dying from murder, beaten only by Jamaica and El Salvador (Amber Pariona). Furthermore, Venezuela’s annual GDP growth rate had fallen by 35% between 2013 and 2017, worse than had been experienced by the USA during the great depression (Ellis). This is all because Venezuela is the country with the highest rate of inflation, with 300,000% being seen in April 2019, followed far behind by Zimbabwe whose already hyper inflation rate seems relatively minuscule at 175% in March 2019 (Broom). Definition of Key Terms Illicit Constitution:​ A body of laws and established precedents which a state or leading party ​ enforces. In simpler terms, it is essentially a list of the laws that govern a nation. It can experience amendments to modify it and is subject to change by national leadership. National Assembly:​ In Venezuela, there is a section of the federal government known as the ​ national assembly, made up of elected members; essentially being the parliament of the country. This is the group which will later be discussed as being supposedly undermined by Maduro. Bolivars:​ The official currency of Venezuela, having an official exchange rate of 10:1 but this is ​ difficult to access for the public for whom an official exchange rate is unavailable, facing constant inflation and is brought from the black market. As a result, the currency is very weak with an unofficial increasing exchange rate of more than 200,000 Bolivars per USD. Minimum ​Wage:​ The lowest legally acceptable wage which a worker can be paid for their jobs. ​ ​ This varies from country to country as well as over time. This is a big issue as it affects the lower class’ ability to support themselves financially. When it is too low, the poor starve and are unable to support themselves, thrusting them into deeper poverty and lowering the GDP. When it is too high however, unemployment increases and businesses suffer as businesses cannot afford to hire staff at such wages. Democracy:​ A system of government where the leadership of a state is decided by members of that state. This is the form of government used by many nations around the world, including Venezuela, USA and UK. The government is chosen through an election held by eligible voters who are from the given state. Dictatorship:​ A system of government where all decisions are made by one group and without input from anyone else. The leadership is not decided through democracy, rather it is often taken with military power or through historical leadership. Venezuela is said to be a pseudo-dictatorship; countries who use this form of government are UAE, Saudi Arabia and North Korea. Political Party:​ An organized group of people who share the same ideology who hold similar political positions/view. Democracies are often structure with political parties, causing politics to be more focused on the political party themselves as opposed to the specific views Key Issues Inflation Rate In August of 2019, the inflation rate had hit 10 million % (Sanchez). There is no need to say that this is out of control and can cause further damages to the nation’s operation. The inflation is causing widespread poverty to Venezuelan citizens, making their lives focused on the day to day survival. In fact, citizens who become so impoverished that Venezuela is on the crux of an educational crisis where kids are too hungry to attend school due to poverty, being estimated that 9/10 Venezuelans cannot afford their daily food. This will make Venezuelan horizons look bleak and cause the future generation to be even worse off than the current one. Additionally, there is also a lack of medicine in the country because of internationally imposed sanctions. This means that the sick from even minor diseases are at high risk, worsening their death rate (Visual Journalism Team). “Corruption” President Nicolas Maduro faces wide criticism from his people of being corrupt and leading the nation into further poverty. It is said that Maduro rigs elections in his favour and also punishes those who speak up against him, straying from the nation’s democratic ways. Maduro’s administration and allies however deny this corruption and claim to be only trying to make the country a more peaceful place. At times, Maduro has been criticized for trying to bypass the democratic structure of Venezuela and become somewhat dictatorial in his leadership. This results in protests which are constantly going on in Venezuela. Although some of these protests may be peaceful, many become violent with both innocent protestors and government workers who are simply carrying out their jobs getting injured and even killed. Furthermore, Maduro’s behaviour has made him unpopular with not only his people, but also international governments, prompting them to impose sanctions on Venezuela, further worsening their economic situation and causing him to be more unpopular (U.S. Mission Chile). Maduro’s actions will be explored in more depth at a later point. Major Parties Involved Nicolás Maduro After the death of Hugo Chávez in 2013, Nicolas Maduro was officially inaugurated as president of Venezuela. He is to this day the current president of Venezuela, facing a lot of criticism from his opposition (largely led by Guaido). He was a member of the national constituent assembly which was responsible for rewriting the constitution that Chavez used for his presidency. He was a member of the National Assembly and became its president in 2005, stepping down in 2006 where he became Venezuela’s foreign minister. He also formed in this time friendly relations between Venezuela and controversial leaders like Libya’s Qaddafi, Zimbabwe’s Mugabe and Iran’s Ahmadinejad. His profile began to grow, especially considering the deteriorating health of then president Chavez. He became the Vice President to Chavez following Chavez’ victory in the October 2012 election, while Maduro’s wife served as the attorney general, leading to their perception as the Venezuelan power couple. After Chavez passed away, there was a vote to decide the president who would carry out the rest of his term, the winner of which was Chavez, having won 51% of the votes, winning by a thin margin. Maduro looked to unite his nation, but in early 2014, the middle class of Venezuela protested the government on the streets, while much of the lower class stood with Maduro, who also had the support of the police and military. The demonstrations had calmed down by May, with even the imprisonment of Leopoldo Lopez, a prominent figure in the opposition, bringing little protest. Encouraged by this, Maduro and his administration imprisoned many of their harsh critics and opposers. At this point, the economy had begun to struggle as previously discussed, resulting from the drop in oil price. Furthermore, the economy was burdened with a decline in industry and exports, resulting from the government’s inability to invest in industry and mismanagement of it. As this caused the nation’s import capabilities to diminish due to the inflation state, along came shortages of toilet paper, milk and medicines (among others) which became more and more widespread. In December of 2015, the Venezuelan people had lost interest in Maduro and wanted him gone. The National Assembly elections were seen as a type of referendum on Maduro’s presidency, where his party PSUV lost control for the first time in 16 years. The conservative opposition instead took control of the assembly and led it with a majority. With the conservatives in power, they were then able to lessen Maduro’s power of the country and release those who spoke out against him, as well as hold a referendum on his popularity. In March of 2016, they did in fact pass legislation to release those who the PSUV had imprisoned, including Lopez. Maduro reacted negatively to this, claiming that the incarcerated were not political prisoners, promising to veto the legislation and saying that laws protecting criminals would not be able to pass him.
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