Poonam Sharma
Venezuela: How Populism, Economic Mismanagement, and Authoritarianism Destroyed a Once-Prosperous Nation
The recent events in Venezuela have once again triggered global outrage, particularly over the role played by the United States. Many argue—correctly—that no country has the moral or legal right to violate another nation’s sovereignty or forcibly remove its leadership. However, limiting the discussion to American wrongdoing alone presents only half the picture. To understand why Venezuela reached such a breaking point, one must examine the internal political and economic decisions that hollowed out the country long before foreign intervention entered the scene.
Venezuela’s collapse was not sudden. It was the result of years of populism, economic illiteracy, and institutional decay.
Venezuela Before Chávez: A Regional Success Story
Not long ago, Venezuela was among Latin America’s most successful nations. It possessed the world’s largest proven oil reserves, a strong middle class, and a relatively stable democracy. Its GDP once ranked among the top economies globally. Tourists flocked to its beaches, migrants sought jobs there, and Venezuelans enjoyed living standards far higher than many of their neighbors.
This prosperity was not accidental. It was built on oil exports, private enterprise, and global trade. While inequality existed—as it does in most countries—the economic engine was functioning.
That foundation would soon be dismantled.
The Rise of Hugo Chávez and the Politics of Resentment
Hugo Chávez rose to power by weaponizing public anger. He framed Venezuela’s problems as a simple moral battle: honest people versus greedy industrialists. Oil companies, businessmen, and private enterprise were portrayed as enemies of the people.
This narrative was emotionally powerful, even if economically flawed. Chávez repeatedly asked why a handful of individuals controlled oil wealth, suggesting that nationalization alone could instantly make everyone rich. Over time, this rhetoric convinced many Venezuelans that prosperity required no production—only redistribution.
Chávez promised cheap fuel, massive welfare programs, and direct cash transfers funded entirely by oil revenues. The message was seductive: the country was rich, only mismanaged by elites.
Nationalization, Subsidies, and Capital Flight
Once in power, Chávez acted swiftly. Private companies were nationalized, industries were taken over by the state, and price controls were imposed. Investors fled. Skilled professionals left the country. Oil production, which required expertise and capital, began to decline.
At the same time, Chávez expanded subsidies and welfare payments at an unsustainable scale. Instead of investing oil revenues in diversification, infrastructure, or education, the government spent aggressively to maintain political popularity.
The immediate effect felt positive. The long-term consequences were disastrous.
Printing Money Is Not Economic Policy
As oil revenues fell and productivity collapsed, Venezuela’s fiscal deficit exploded. Rather than correcting course, the government chose the easiest—and most dangerous—path: printing money.
This decision triggered hyperinflation. Currency lost value faster than it could be printed. Eventually, Venezuela issued banknotes worth billions of bolivars, which were practically useless. Stories emerged of currency notes being discarded on streets or collected like garbage because they were worth less than the paper they were printed on.
This was not an accident. It was the predictable outcome of ignoring basic economic principles.
From Populism to Authoritarianism
As economic pain increased, political tolerance disappeared. Chávez, and later his successor Nicolás Maduro, steadily weakened democratic institutions. Independent media was silenced, opposition leaders were arrested or barred from elections, and courts were turned into political tools.
Elections became procedural rituals rather than genuine contests. When legitimacy eroded, repression increased. Economic failure was blamed on conspiracies, foreign enemies, and sanctions—never on policy mistakes.
By the time Chávez died, Venezuela was already in decline. Maduro inherited a broken system and made it worse through incompetence and corruption.
Mass Exodus and National Collapse
The most devastating proof of failure is human movement. Today, an estimated 7–8 million Venezuelans have fled their country, seeking refuge in Colombia, Brazil, Argentina, and beyond. This is one of the largest peacetime migrations in modern history.
People do not abandon their homeland in such numbers because of ideology. They leave because daily survival becomes impossible.
A nation that once attracted migrants became a country people escaped from.
The Danger of Dynastic and Populist Politics
Venezuela’s story also highlights a deeper danger: when leadership is chosen based on loyalty, ideology, or lineage rather than competence. Chávez personally selected Maduro, bypassing institutional accountability. Power became concentrated, unchecked, and self-perpetuating.
History shows that when politics is driven by emotion over economics, symbolism over substance, and entitlement over productivity, decline is inevitable.
Conclusion: Lessons Venezuela Teaches the World
Condemning foreign intervention is necessary—but insufficient. Venezuela was not destroyed by external forces alone. It was dismantled from within by populism, economic fantasy, and authoritarian control.
The central lesson is clear:
No country becomes prosperous by vilifying wealth creation, distributing unearned money, suppressing institutions, or replacing competence with ideology.
Democracy without economic responsibility collapses into chaos. And populism, however attractive it sounds, ultimately consumes the very people it claims to protect.
Venezuela is not just a tragedy—it is a warning.
