Imagine trying to do business in a place where if your costs go up you can’t charge more for your product to compensate. That’s exactly what is happening right now in Venezuela, and it has caused chaos and insecurity. There’s a black market for things like toilet paper and diapers, and most residents are struggling to get enough to eat.
The latest company to pull out of Venezuela is Kimberly-Clark. A global decline in oil prices kick-started the crisis originally- 95% of Venezuela’s earnings come from oil production. Government corruption added to the problems when there was no money left in the coffers to ride out the economic downturn because $1 trillion in oil revenues from previous years has been lost or stolen from the government. Without exports or savings there’s no way to import food or raw materials for production of commodities, creating increasing instability in the region. Government control of the currency is exacerbating the situation- companies aren’t allowed to convert local currency into dollars to buy raw materials for production.
As if the economic woes weren’t enough, Venezuela is also a hotbed for political imprisonment. Leopoldo Lopez, the former opposition leader, was sentenced to 14 years in prison, while former Presidential Candidate Manuel Rosales was also sentenced to almost 14 years in prison. But it’s not just political leaders who are being targeted- it’s anyone who speaks out against the government. Small business owner Rodolfo Gonzalez committed suicide after being accused of organizing protests against the government.
The media is also censored in Venezuela. In 2014 alone, ⅓ of Venezuelan journalists refused to report on certain stories out of concern for their safety. That same year 347 attacks on journalists were reported. Any media organizations that oppose the government are subject to having their broadcasting licenses revoked.
There are no legal avenues for Venezuelans who want to oppose the government. More than 45,000 cases have been brought to the Supreme Court against the Venezuelan government since 2004, but not one of them has gone against the government. Political corruption is never investigated unless it involves someone who is speaking out against the current regime.
So what happened to that Kimberly-Clark plant that shut down? The Venezuelan government seized it and says it will reopen under government control, with the government reporting it is “in the hands of the workers.” It was seized, supposedly, because the plant owners illegally fired the workers without first consulting the government. How they plan to procure the raw materials needed to continue to run the plant is unknown.
The economy continues to struggle in Venezuela and the people are paying the price. Currently three of the top 10 cities for murder are in Venzuela, with Caracas being the number one city for murder per capita in the entire world. In addition to food shortages there are also energy shortages and medical shortages. Inflation has skyrocketed 720%, making Venezuela the world capital for consumer inflation. Learn more about the crisis in Venezuela from this infographic.