The crisis in Venezuela now has the Maduro regime that started with Socialist Hugo Chavez back in 1998, and fully backed by the military, fully focused on the newcomer, Juan Guaido who is backed by the US, Canada and a host of other nations. The current military-backed government was born in 1998 when Mr Chavez used oil to pay for expensive social programs for the poor, with a focus on education, and health. But the socialist paradise that Mr Chavez and Mr Maduro envisioned is now collapsing into a failed state.
Some put the death toll in the hundreds, others in the thousands. Now the hungry citizens of Venezuela are suffering violence at the hands of the military and the situation only gets worse by the day.
This social experiment started out well, given that oil prices were at $110 to $115 per barrel but since 2014, when oil prices collapsed to under $30 per barrel for the low, and now in trading in the $50 to $60 range, the amount of revenues derived from this commodity has collapsed in a country that is not good at managing its finances. Mr Chavez and Mr Maduro have been following the socialist model, taxing product parts of society and giving cash to the poor.
People in Venezuela actually thought that Free Education, Free Gasoline and Free Medical was real, then they found out, via the collapse of oil, that nothing if free. Currently there are 3.5 million refugees who have left Venezuela, many of the undernourished, having lost 7 kilos on average (16 lbs). The economy has collapsed and there is not enough excess reserves to service government institutions.
Russia and China have lent Venezuela billions since 2006 but the deep pockets of these countries seem to be less interested. Both China and Russia have given or lent Venezuela about $100 billion and the country is, after a decade of support, an economic basket case that has turned into a humanitarian nightmare for all to see.
Now many experts are looking for a collapse in the Maduro regime – with hundreds recently executed by government hit squads – and the question is does Mr Juan Guaido have the experience and support to take over. Currently, Russia has said that it wants to sit with the US to discuss joint support for Venezuela. This was released by foreign minister Sergei Lavrov, a close ally of Vladimir Putin. Now the key is how to rescue this state from full collapse.