Venezuela and Coronavirus - March 2020
Venezuela already had a crisis. Coronavirus will make it worse.
In December 2019, if you had been asked to imagine a worst case scenario of external shocks for Venezuela, a pandemic virus plus oil price crash plus global economic recession may have been laughed at as unrealistic. As of March 2020, these three factors plus the isolation created by far less international travel are hitting a country that already has a weak healthcare system, a lack of food and medicine, and a political crisis. Five million people fled the country before coronavirus and now it’s likely to get worse.
There are strong reasons to believe the worst coronavirus numbers in Latin America will come out of Venezuela. Plenty of media outlets (Reuters, Bloomberg, Guardian) have covered how the medical system is unprepared, under-resourced and will be swiftly overrun by cases.
If cases begin to overrun the country, at least 100,000 COVID-19 related deaths should be expected in Venezuela alone over the next year. Others will die due to the problems within the medical system that occur as the health system is overwhelmed. In terms of both the percentage of an already diminished population and the raw numbers, it will be a horrific loss of life. In fact, based on some initial estimates around the region, it’s likely more people will die of coronavirus in Venezuela than Mexico in the coming year in spite of having a significantly smaller population.
Venezuela’s awful economy will worsen
The Maduro regime requested US$5 billion from the IMF. Leave aside for a moment the hypocrisy (Chavez wanted the IMF destroyed) and the technical challenges (the IMF doesn’t grant those sorts of loan requests and many of its members don’t recognize Maduro as the country’s leader). The desperation of the request shows just how short of cash the Maduro regime is.
The price of oil has crashed, meaning Venezuela is making only a few dollars per barrel at best. Production and exports are likely to drop with coronavirus impacting the country and the world.
The economy’s informal dollarization over the past year will likely continue in order to prevent shortages from being even worse. However, the combination of fewer international flights plus global recession means remittances will fall.
Several local sources indicated there are growing concerns over even greater food and fuel shortages in the coming weeks. With half the country already in a food insecure situation, any decline in food shipments or the ability to move food around the country could put lives at risk and increase the chances of social instability.
Increased uncertainty in the political realm
Maduro has used this crisis to attempt to regain some legitimacy. In a region where most politicians have raced to implement strong repression measures (Mexico and Brazil being the exceptions), Maduro has become among the most active, announcing a full quarantine of the entire country and appearing on television regularly to warn about the potential dire impacts if social distancing fails. It is a rare acknowledgment of reality by Maduro that may give him a small amount of additional credibility, even among his opponents.
That shift is recent. Venezuela was the last large country in this hemisphere to announce a case and Maduro appeared in denial of the potential impacts until a few days ago. Additionally, Maduro’s admittance of the problem may not be the full truth. Multiple sources in Venezuela have indicated that the virus is much more widespread than Maduro admits, with potentially hundreds of suspected cases just among government workers and the military.
Guaido has also attempted to use this crisis to demonstrate leadership, calling on Venezuelans to commit to social distancing and offering to work towards humanitarian assistance. While his leadership is appreciated and he retains much higher levels of public trust than Maduro, the statements have also highlighted how incapable Guaido’s government is of doing anything other than making public comments. They cannot import food or medicine or implement any measures to boost the economy or create social distancing that go beyond requests for voluntary action by the public.
Analysts Hxagon has spoken with differ about the potential impact of coronavirus on Maduro’s stability. Some highlighted his ability to use the crisis to increase his hold on power. Others see this as the crisis that finally pushes the population and the military to the limit with the potential for political and economic chaos in the coming months. All sources agree the new disease has created additional uncertainty and reshaped the political stalemate and debate over elections later this year.
The region cannot ignore Venezuela
As with the pre-coronavirus Venezuela crisis, the failing of Venezuela’s economy and public health infrastructure is going to push more people to attempt to flee the country. However, in a region that has suddenly closed its borders and become more anti-migrant, they may have fewer places to flee to. Countries, especially Colombia, are going to have a hard choice of whether to let desperate Venezuelans in, even as the local populations face their own public health challenges caused by the new disease. Public pressure will be to keep borders closed. With the stress caused by coronavirus, there may also be an increase of xenophobic attacks against the migrant populations that arrived months or years ago.
Every country in Latin America is dealing with its own coronavirus crisis at the moment. Yet, with the expectation that Venezuela will be hurt worse than other countries and the fact Venezuelans will attempt to flee, the region cannot ignore what is occurring there.
In the coming months, the region will be forced to acknowledge the implications of its failure to resolve the crisis in Venezuela caused by Maduro illegitimately holding on to power. It’s too late to change the past, but one lesson that should be learned is that failing to act when the region had the opportunity to do so in recent years now has the potential to cost many thousands of additional lives and create a new regional crisis in 2020.
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