(South America) What’s more, it’s sitting on a treasure trove of black gold, with oil reserves that should make it one of the richest countries in the world.
So why does Venezuela have a terrifying reputation for danger and corruption, an overcrowded capital filled with slums, and healthcare so poor there are queues down the street to buy painkillers?
In his fascinating BBC series Simon Reeve’s Caribbean, currently showing on SBS, the presenter delves deep into the dirty reality of life in one of the world’s most magnificent regions.
Venezuela has the largest proven oil reserves in the world and has earned more than a trillion dollars from oil in the past 20 years. Socialist president Hugo Chavez, who led the country until his death in 2013, vowed to use the oil money to help the poor, but years of what Reeve calls “gobsmacking economic mismanagement” has left one in three Venezuelans living in poverty.
The unfinished Centro Financiero Confinanzas skyscraper, or “Tower of David”, in downtown Caracas, was notorious for being the world’s tallest squat, housing 3000 residents at one time.
Despite the missing walls, wide gaps in railings and sporadic access to electricity and water, it was the best option for many desperate people. It was known for murders and violent drug and kidnap gangs, but also became a centre for industry, with squatters setting up businesses in its half-built rooms.
Last year, the government moved its residents to new housing, citing uninhabitable conditions, but the problems facing President Nicolas Maduro run far deeper.
Hospitals in the capital have high-level security to deter violent criminals, with one doctor telling Reeve that a patient had been gunned down in the emergency ward. With medical staff and basic medication scarce, there have been outbreaks of diseases like Dengue Fever.
Venezuela has one of the highest murder rates in the world, with around 20,000 people killed in each year. “It’s a symptom of poverty, ineffective policing and failing government,” says Reeve.
Government restrictions on foreign currency means businesses don’t import and tight controls on prices mean shops don’t make money.
Just a year ago, Maduro faced violent street rallies, which left more than 40 people dead, over his economic policies and the shortage of basic goods. Yet the nervous president ruled out austerity, Green Left reported.
While Venezuelans are queuing for toilet paper, flour and building supplies, heavily subsidised petrol is sold for far less than it costs to produce.
Maduro has warned that he needs to increase petrol prices, which are the cheapest in the world.
The subsidy is “bankrupting the country”, says Reeve, costing more than education and healthcare combined, but governments are afraid to buck the status quo. When former president Carlos Andres Perez did so in 1989, it resulted in riots, looting and a military crackdown.
As a result, Chavez didn’t raise prices in his 14 years as president, meaning locals still pay just one US dollar to fill a 60-litre tank. It has fuelled a black market trade in which ordinary citizens smuggle petrol over the border into Colombia to sell it for a profit, with the alleged complicity of gangs, police and even government officials.
It’s thought $60 million-worth of fuel is smuggled out of Venezuela every week.
Two mass graves were found near the border earlier this month, thought to be linked to gangs smuggling drugs and fuel into Colombia, Panam Post reported.
Any fuel price increase now may come too late to turn the country’s fortunes around, according to Bloomberg, with analysts predicting that GDP will contract by seven per cent this year. Venezuela urgently needs major economic and structural change to root out the problems.
Despite all its natural wealth, the country appears to be on the verge of collapse.