Venezuela was once South
America’s richest country. Now it’s in turmoil. Here’s how we got here. Juan Guaido declared himself
acting president of Venezuela in January 2019. Venezuela, though, already had
a president — Nicolas Maduro. The socialist leader has
led the country since dictator Hugo Chavez’s
death in 2013. Maduro had just been sworn
into a second six-year term earlier in January. But opposition boycotts and
allegations of voter fraud tainted his election. The National Assembly, controlled
by the opposition, did not recognize the results. U.S. President Donald Trump
recognized Guaido as Venezuela’s legitimate president and
praised his plan to hold new elections. Maduro immediately accused the United
States of trying to orchestrate a coup
from Washington D.C., and he gave the U.S. 72 hours to
remove its diplomats. In January, thousands of Venezuelans
marched in the streets. They called out Maduro’s corruption
and demanded he step down. So who is Juan Guaido? The 35-year-old engineer is the
newly named head of Venezuela’s national assembly. But he’s been involved
in opposition activities since college, when Chavez was
running the country. Guaido founded the Popular Will
party in 2009 with mentor and opposition leader
Leopoldo Lopez. In 2011, he joined
the National Assembly. Guaido was reportedly shot
with non-lethal rounds by government forces in 2017 during anti-government protests in Vargas, his home state. He was named president of
the National Assembly on January 5th 2019. Earlier this year, Guaido was
momentarily detained by the government, but he
was soon released. In February, he was asked by
the CBC why he hadn’t been arrested yet? Since declaring himself acting
president Guaido’s pledged to work with Venezuela’s main business
group and said he would end the persecution
of private business. To that end, Guaido reportedly
told Senator Marco Rubio he would name a new board for state owned oil company Citgo Petroleum Corporation. Venezuela’s Supreme Court, which
supports Maduro, recently hit Guaido with a travel ban
and froze his bank accounts. So how did we get here? Venezuela has the largest oil reserves
on the planet and yet nearly 90% of the
country’s 32 million people live in poverty. When Chavez took office in
1999 the country was producing about 3.5 million barrels of oil a day. Since then the country’s oil
production has fallen off a cliff and stands at 1
million barrels per day. Meanwhile hyperinflation is predicted
to hit 10 million percent in 2019 and the
country’s currency is virtually worthless. One dollar is
the equivalent of 248,521 Venezuelan bolivars. At least three million people have
fled the country in the last five years as food
and medicine shortages have worsened. Doctors can’t treat
simple infections, much less people with more
serious conditions. To make matters worse, Maduro
has refused offers of aid from the U.S., saying accepting U.S. aid was a precursor to invasion. So far dozens of people
have died in the unrest. Meanwhile a poll taken last fall
showed more than 9 million Venezuelans only eat
once a day. A similar number said they
eat nothing or close to nothing at least one
day a week What’s the world doing about it? The United States, the European
Union and most of Central and South America
support Guaido. While China, Russia, Turkey, Cuba,
Bolivia, Iran and Nicaragua stand behind Maduro. Venezuela owes a total of
about $100 billion dollars to outside creditors. About $20 billion dollars of that
debt is held by China and another $2.3 billion by Russian
oil company Rosneft. There’s some question about
whether those debts remain valid if Maduro is replaced. Meanwhile, Russian support is seen
as vital to Maduro’s survival. Russia has reportedly stepped
in several times to help Venezuela stave
off default. But if Putin were to allow a Venezuelan default, Russia could claim a lien on Citgo. Maduro offered Russia a 49.9 percent stake in the company after
securing a loan in 2016. Last December Russian bombers
landed in Venezuela. The move was welcomed by
Maduro supporters, which included the military but drew strong
criticism from the U.S. Trump made it clear during his
State of the Union address the U.S. supported Guaido. Trump had previously refused
to rule out military intervention in Venezuela, saying all
options are on the table. As a result,
Venezuela recently conducted military exercises. Maduro said the country
was preparing to defend itself against the U.S. What happens if Guaido takes over? For now high-ranking Venezuelan
officials, including the military, remain supportive
of Maduro. But political analysts believe
that could change under escalating international pressure. If Guaido takes control of
the government there won’t be widespread defaults. But nobody is going to get paid immediately. The International Monetary Fund will
likely take the lead in what would be one of
the largest and most complicated sovereign debt restructurings ever. Venezuela will essentially have
to be rebuilt completely. Fortunately, Venezuela has 300 billion
barrels of oil as well as underground reserves of
gold, iron ore and other natural resources. Those resources assure that
countries who risk helping Venezuela will likely be paid back. Meanwhile, Juan Guaido has called
for more protests and insisted a starting point for
any dialogue must include Maduro’s exit.

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