Venezuela’s Situation Is Beyond Peaceful Protests

What is the cost of peace? Doesn't matter, as long as you don't pay with bolívars.

Venezuela’s Situation Is Beyond Peaceful Protests

We’re all more or less aware of what is transpiring in Venezuela nowadays. Poverty, hyperinflation, and deficits on basic human needs, such as medicine and food in the shops, are rampant all over the country, with very little hope in sight.

The country tried to adopt the extremes of socialism, in the hope of somehow providing a better future for it in the long run. Don’t get me wrong—It was working at first just like every attempt at socialism does, but in terms of longevity, the system just falls apart, unless the government is ready to just throw money at the problems, hoping that they will fix themselves.

Well, in order to throw money at those problems, you have to have that money. And once you throw it, it’s not coming back, but the problem still has a chance at lingering. That was one of the policies back in Chavez’s regime, when problems were solved due to the money Venezuela was making, thanks to its large oil reserves. In fact, it has the largest oil reserves on the planet. It just doesn’t use them as effectively, being quite near a country like the United States, which has quite a lot of interest in those natural resources.

The issues began with the solution

For a long time, oil seemed to be the solution to all of Venezuela’s problems in the beginning. The market was booming and there were more than enough clients to sell barrels to. But then, the prices dropped, and with it went with the Venezuelan economy.

When the country’s main, and pretty much only, export is a product dependent on global prices, you know that a disaster is waiting to happen. Well, it happened.

Once the prices dropped, the local currency, the bolívar, went with it. In hopes of somehow saving the exchange rate, the government tried to pour more money into preserving it. That led to more money to be printed, thus making the currency almost useless for not only the global community, but the local populace as well.

Taking advantage of the situation

The recession hit around the time that a new president was to be chosen. Almost every candidate campaigned with promises to bring back the good old days of Chavez—And one of them, Maduro, was the victor.

The United States doubted the legitimacy of Maduro’s presidency from the get-go, and they are still challenging the Venezuelan president to this day, calling his election nothing but a false inside job.

With so much political pressure, not only from the US but from most of the western world, Venezuela has been struggling with finding friends, only relying on Cuba and Russia occasionally for some trade agreements.

The survival attempts of the population

Most Venezuelan politicians thought the more Venezuelans that started to use the bolívar, the stronger this currency would become. They would even help it grow a bit, by forbidding any type of USD transaction within the country.

However, it didn’t help. There was no interest from the citizens’ side to use bolívars anymore; they simply didn’t trust it. Several were heard saying that there’s a chance that you go to sleep with $100 worth of bolívars, and wake up with $50 worth.

But a solution was found—not by the government, but by the people. A large chunk of Venezuela’s population started using cryptocurrencies as their daily drivers, most occasionally, the Dash cryptocurrency. It supported the SMS transaction system, and therefore, it was the best one to go for, due to large numbers of unbanked individuals in the country.

Several experts from a South African financial website, topforexbrokers.co.za, had this to say about this predicament:

“Cryptocurrencies were the obvious choice. The country was preventing any type of western currency to be funneled within its jurisdiction. The only currencies these people could have gone for were neighboring ones from Latin American countries, which are also largely unreliable, or the Russian Ruble, which is also tied to oil and gas prices.

We’ve seen similar attempts made in South Africa. People started to pay attention to gold, the sole investment that always retains its value in favor of cryptocurrencies. The interest rates were simply not catching up with the inflation of the Rand, and gold did not care about the South African economy, therefore cryptos were the only option.

It was a very good decision, and a fast one too. It took just a few months for merchants to adopt the Dash crypto and start trading it nearly on a daily basis.”

It was good while it lasted

Regardless of what financial situation a country is in, if the government doesn’t control it, there’s a chance for anarchy. Therefore, seeing that cryptocurrencies were becoming quite popular with the citizens, the Venezuelan government decided to create its own version, but it forgot three very important parts about digital assets.

They’re decentralized, they retain anonymity, and they react to market movements. The new Venezuelan Petro was not accomplishing any of those assets. It was centralized; kept a very keen eye on who, where and when was transacting them; and reacted to the government’s decision on when to emit new coins, pretty much equivalent to printing money.

It was not well received by the Venezuelan citizenry, after which it was pretty much forced upon them. First, it was the pensions that would be paid with this cryptocurrency. Next would be taxes, and finally, salaries.

What do the experts say?

According to several experts from both the United States and the United Kingdom, Venezuela should take the example of Hong Kong. But, what most of them don’t realize is that there’s not enough democracy in the country for that to happen.

Yes, there were several police raids in Hong Kong, which is damaging to a country’s democracy score. But, at least nobody died right? In Venezuela, there’s a large probability that massive prolonged protests will be met with much more brutality by the government. It has been displayed before.

Yes, again, nobody died, but let’s remember that these were just short term protests. Should a prolonged one, backed by the country’s opposition, take place, people may be hurt.

But, in the eyes of spectators from all over the world, there are very few alternatives to a change via revolution or civil unrest. It’s not like the US will threaten military action, right? It’s up to Venezuelans themselves to get out of this mess as soon as possible.

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Giorgi Mikhelidze
Giorgi Mikhelidze
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