On July 28, millions of Venezuelans went to the polls to vote in the country’s highly anticipated presidential election. For the first time in years, there was hope that the opposition would unseat the long-ruling antidemocratic leader Nicolás Maduro and restore a sense of future post-Chavismo—late President Hugo Chávez’s populist political project of a “socialist revolution” that has slid into authoritarianism—to a once-prosperous nation wrecked by prolonged economic collapse, political repression, and a massive exodus of people that has had repercussions across the region.
But in the wake of the vote came terror. The electoral authority—controlled by a pro-government majority—declared Maduro, the political successor of Chávez, the winner, despite questions about the integrity of the process. The opposition disputed Maduro’s claim with evidence that their candidate, little-known former diplomat Edmundo González, had won by a wide margin. (The United States government agreed.) The Carter Center, which sent an expert group to Venezuela to observe the election, said it “did not meet international standards” and couldn’t “be considered democratic.”
The fraudulent election has sharpened the focus on the utter collapse of what used to be the richest nation in South America. Deadly antigovernment protests have since erupted across Venezuela, and several countries have pressured the Maduro government to present verifiable proof of his reelection to no avail. “Venezuelans are ready to throw off the dictatorship,” the popular leader of the opposition, María Corina Machado, who was barred from running and backed González, wrote in an op-ed. “Will the international community support us?” Back in 2023, Machado had predicted two possible outcomes for the election: “landslide victory or an obscene fraud.”
Venezuela’s fate is not restricted to South America but has been bound up in the US election this year. With the southern border as a central issue, much has been made of the spike in migration from Venezuela to the United States during the administration of President Joe Biden. On the right, the surge has been played up as a way to hit the left twice: a socialist government in Latin America failed; the poor policies of a Democratic administration led to the border being overrun. At the Republican National Convention in July, Donald Trump suggested Venezuela—as well as El Salvador—was sending “criminals” to the United States.
But that misses a far more complex story, one that ranges from the long history of US involvement in the region to the specifics of the Trump era, when, as the Washington Post recently reported, despite warnings that it would cause massive migration, President Donald Trump pushed devastating sanctions onto Venezuela. (Trump also appointed Elliott Abrams, who played a role in the Iran-Contra affair and was linked to a failed coup attempt against Chávez in 2002, as the special envoy to Venezuela.)
“I said the sanctions were going to grind the Venezuelan economy into dust and have huge human consequences, one of which would be out-migration,” Thomas Shannon told the Washington Post.
The results of years of economic mismanagement, exacerbated by US policies cracking down on the country, have been dramatic. One poll suggested as many as one-third of Venezuela’s population was considering migrating if Maduro, who has been president for more than a decade, held onto power for another six years. They would join the more than 7.7 million Venezuelans who have already left the country of fewer than 30 million since 2014. Most have fled to neighboring countries such as Colombia and Brazil, but thousands of others have made their way through the treacherous Darien Gap to the US-Mexico border. Many have been bused to cities like New York and Denver, where politicians have turned them into political pawns.
Since fiscal year 2021, US Customs and Border Protection (CBP) has registered more than 837,000 encounters with Venezuelan nationals. (The number of migrant apprehensions at the border has fallen significantly as of late in part as a result of increased enforcement by the Mexican government.) There are also currently 242,000 Venezuelans in the United States who benefit from Temporary Protected Status (TPS) and hundreds of thousands more who, according to the Department of Homeland Security, are potentially eligible based on “Venezuela’s increased instability and lack of safety due to the enduring humanitarian, security, political, and environmental conditions.”
Given all these factors, how did one of the region’s most prosperous and stable nations fall apart? The answer is more complicated than “extreme socialism,” as Elon Musk tweeted.
Once Venezuela was one of the richest countries in the world. By 1970, it had a higher income per capita than many European nations. But during the last quarter of the 20th century, Venezuela entered a period of economic contraction.
“There were a number of things that happened during that very long period,” says Francisco Rodríguez, a Venezuelan professor at the University of Denver’s Josef Korbel School of International Studies and author of the forthcoming book The Collapse of Venezuela: Scorched Earth Politics and Economic Decline, 2012-2020. “Mostly they had to do with the country not being able to adopt reasonable economic policies and policy reforms because of conflict between its elites.”
Home to the most proven oil reserves in the world, Venezuela enjoyed a boom from exporting its oil. But then global prices plunged, going from $100 a barrel in 2014 to less than $30 two years later. Chávez, who led Venezuela from 1999 until his death in 2013, directed oil revenue to massive social spending programs that benefited the poor. But heavily dependent on that commodity, the country hadn’t sufficiently saved or invested and fell into debt. After Maduro took over in 2013, the economy went into free fall.
In the years since, Venezuela has experienced some of the highest inflation rates worldwide—with a staggering 130,060 percent in 2018. Compounding the crisis for Venezuelans has been a devastating shortage of basic goods, food, and medicine. An estimated 80 percent of the population lives in poverty and the monthly minimum wage of 130 bolivars is equivalent to about $3.60 in the United States. A survey in 2017 found that 75 percent of Venezuelans lost an average of 19 pounds due to lack of nutrition. Between 2012 and 2020, the economy contracted by 71 percent—more than any other country in modern history not in war and more than double the magnitude of the Great Depression. Crude oil production by the state-owned company Petróleos de Venezuela, S.A. (PDVSA) also plummeted, reaching a 75-year low during the pandemic.
Adding to the economic downward spiral was government mismanagement and corruption. As Marcela Escobari, who served as assistant administrator for USAID’s Bureau for Latin America and the Caribbean, explained, years of “expropriations, underinvestment in the oil industry, massive foreign indebtedness, and the gradual undermining of institutions overseeing government expenditures” have hurt the economy badly.
A US government watchdog report concluded that sanctions “likely contributed to the steeper decline of the Venezuelan economy, primarily by limiting revenue from oil production.”
But so did the various sanctions imposed by the United States over almost 20 years. While the Obama administration resorted to targeted sanctions against Maduro’s allies, Trump opted for a “maximum pressure” strategy. He broadened economic sanctions in response to escalating human rights abuses and corruption by the Maduro government. In 2018, Maduro secured a second term after what was generally considered illegitimate elections. Dozens of countries, including the United States, recognized Juan Guaidó as interim president. In late 2022, amid waning support for Guaidó, Venezuela’s opposition National Assembly voted to dissolve the shadow government. Guaidó went to exile in Miami, while an unpopular Maduro has stayed in power and replicated his 2018 response to the 2024 elections.
Starting in 2017, Trump barred the Venezuelan government from borrowing from financial markets, blocked assets, and prohibited US businesses from dealing with PDVSA, the state’s largest source of revenue. At the time, then–national security adviser John Bolton said the measures were necessary to mitigate “the poverty and the starvation and the humanitarian crisis.” But the United Nations human rights chief warned even then that the sweeping sanctions would more likely have the opposite effect and harm the most vulnerable groups.
“It’s one thing to sanction certain regime officials and not let them travel internationally and freeze their bank accounts in the United States,” Rodríguez, who estimates sanctions have contributed to around half of Venezuela’s economic contraction, says. “It’s another thing to hurt the Venezuelan economy because if you hurt the Venezuelan economy, you are hurting ordinary Venezuelans. You’re not hurting Maduro.”
According to the Washington Post, the Trump administration had been warned that sanctions could heighten Venezuela’s economic and social crises and incentivize more migration, including potentially to the United States. “This is the point I made at the time: I said the sanctions were going to grind the Venezuelan economy into dust and have huge human consequences, one of which would be out-migration,” Thomas Shannon, undersecretary of state for political affairs under Trump, told the Post.
Just how much the sanctions have pushed Venezuela to the brink is a subject that continues to be debated. Some analysts have argued that even before the 2017 sanctions, the economic recession, living conditions, and oil production in Venezuela were already on a negative trend and that pre-sanction underlying factors played a greater role in contributing to the country’s collapse than sanctions. As researchers with the Brookings Institute and the Harvard Center for International Development wrote, “Rather than being a result of US-imposed sanctions, much of the suffering and devastation in Venezuela has been, in line with most accounts, inflicted by those in power.”
Others argue that even if true, sanctions have only exacerbated existing problems. In a country heavily dependent on oil—accounting for 90 percent of all exports—the sanctions have been linked to a decline in production “of a dimension seen only when armies blow up oil fields,” one report about the human consequences of economic sanctions by the Center for Economic and Policy Research states. Diminished oil exports have had a negative impact on the country’s revenue and ability to import food and other essential goods with foreign exchange.
A US government watchdog report concluded that sanctions “likely contributed to the steeper decline of the Venezuelan economy, primarily by limiting revenue from oil production.” The UN Special Rapporteur found that no “strata of society has been untouched” by the negative impact of unilateral sanctions.
In a 2019 paper titled “Economic Sanctions as Collective Punishment: The Case of Venezuela,” Jeffrey Sachs and Mark Weisbrot argued that the sanctions imposed by the Trump administration “reduced the public’s calorie intake, increased disease and mortality (for both adults and infants), and displaced millions of Venezuelans.” By making it nearly impossible to stabilize the economy, they wrote, sanctions contributed to “an estimated more than 40,000 deaths” from 2017 to 2018.
In the months before Venezuela’s presidential election, the Biden administration offered conditional energy sanctions relief in a stated effort to pressure Maduro into committing to a free and fair electoral process. But the White House later reinstated the sanctions because the Venezuelan government failed to uphold their end of the bargain on a deal that included allowing top opposition candidates to run in the presidential race.
“The [Biden] administration has thought of sanctions relief as a ‘switch’ that could increase Venezuela’s economic prospects and keep people in place,” says Ryan Berg, director of the Americas Program and head of the Future of Venezuela Initiative at the Center for Strategic and International Studies. That strategy has failed, he adds, and lifting sanctions “would be to reward Maduro for what is being called the mother of all electoral frauds in Latin American history.”
For some observers, the path forward is a transition to democracy that allows for the normalization of relations with other countries and economic recovery—without sanctions. There have been some fragile signs of improvement. Inflation, while still high, was down to 190 percent last year and Venezuela’s oil exports increased by 12 percent. Luis Oliveros, an economist at the Universidade Metropolitana in Caracas told El Pais that oil production can continue to increase if sanctions stay flexible.
But uncertainty remains as Maduro tightens his grip on power despite the will of voters, blaming the unrest on “North American imperialism and the criminal fascists” and saying he wouldn’t “hesitate to summon the people to a revolution.” Rodríguez at the University of Denver sees one possible scenario where the pariah Maduro regime collapses in the face of mass protests. But more likely, he says, the “viable way out to avoid the consolidation of a full-fledged autocracy” is through a power-sharing agreement. Meanwhile, the US government has reportedly discussed extending Maduro a pardon offer to convince him to step down.
“The polls showing that large numbers of Venezuelans will migrate if Maduro remains in power prove that it isn’t about the economic situation so much as it is about Maduro,” Berg says. “That is to say, it’s about regime type. Without a change in government, Venezuelans will lose hope and migrate. Absolutely nothing changes in Venezuela until Maduro leaves.”
