Venezuela on Fire; Whence Maduro’s Petro Plan Failed to Bail Out the Country

On January 10, Venezuelan leader Nicolas Maduro invested in the second term in the context of hyperinflation, persistent political and economic crises and severe sanctions imposed by his former partner and oil buyer: the United States.



Ever since Maduro took office in 2013, Venezuela faced several brutal riots, including "The Mother of All Markets" in 2017 and an attack on the Caracas helicopter that same year. The current crisis is likely to be the last regime. We have decided for the past six years to look at Venezuela and the fate of Petra - a national cryptocurrency founded to save a scary economy, but which in turn has caused even more anger.

The legacy of Hugo Chavez

Hugo Chavez, a seemingly irreplaceable Venezuelan leader who has been in power since 1999, died after a long battle with cancer in March 2013. And inequalities. This is evidenced by the thousands of citizens who attended his funeral in the crowded Caracas.

According to the statistics released by the Guardian, between 1999 and 2009, the Venezuelan government managed to reduce unemployment by 14.5% to 7.6%, increasing GDP per capita from 4.105 to $ 10.810 and decreasing the extreme poverty rate from 23.4 % to 8.5%. , Venezuelan indigenous peoples - representing about 2 per cent of the country's population - were among the ones who used the most from Chavez's presidency. As he was in charge, Venezuela turned to protect their rights and granted them fundamental freedoms.


Instead of the Venezuelan economy's reform that has always depended on oil, Chavez has decided to declare an "economic war" and accused bourgeois owners of local farms, supermarkets and mills for hiding food products to destabilise his government.

Maduro Guerra: from socialism to usurpation of power

When Maduro took office in 2013, he succeeded one of the most uncertain economies throughout the South American region.

According to Statistics, Internet Internet Statistics and Market Research, the average inflation rate in 2012 - a year before Maduro's presidency - was about 21%. Even though the year was relatively stable for Maduro's administration, his actions led to Venezuela only to the edge of the abyss.

Indeed, during his first year in Maduro, his government continued Chavez's economic war, accusing wealthy entrepreneurs to keep their goods and raise their prices. The law was supported by Venezuelan lawmakers who in November 2013 granted special powers to Madura by special decree. However, by the end of 2013, the average inflation rate increased to 43.5%.

But the real crisis came in 2014 when crude oil prices lost nearly 40% in just six months. The Madurova government was the first to attend mass demonstrations led by the Roundtable on Democratic Unity (or MUD in Spanish). Marshal participants who started in February 2014 have accused officials of corruption, poverty, and the prevention of inflation. As the clashes between protesters and the Venezuelan army became more violent - more than 40 people allegedly killed in two months - Maduro's supporters are accused of excessive use of force, and many have called for the resignation of the president.


In 2015, the average inflation rate was around 68.5%, while Maduro again accused unscrupulous companies of causing shortages and price increases. Also, the Venezuelan GDP fell 3.9 per cent this year, according to the IMF.

In December 2015, the Roundtable on Democratic Unity won the congressional elections and became the largest group at the National Assembly, the united parliament of Venezuela. The opposition quickly focused on holding a referendum that would force Maduro to abandon duties, while inflation in 2015 more than doubled and reached 111%. However, the Supreme Court confirmed Madura, reduced the power of the assembly and the referendum decision remained stuck in the bureaucracy. Subsequently, the Venezuelan parliament voted to initiate the revocation process against Maduro for violating democracy and called on the military not to obey the government at the end of October 2016.

In 2016 Maduro's presidency was first called dictatorship. For example, following a further turnaround in the political crisis, Forbes has published an article titled "We're sorry, bondholders, Venezuela is now a dictatorship," while Guardian wrote an article titled "Let's Call Venezuela". Under Maduro: Dictatorship. "Later this year Also in 2016, a scary survey conducted by several local universities showed that Venezuelans hardly consume the recommended 2,000 calories per day and that 75% of citizens lost about 19 pounds this year because of the crisis.

In 2017, the High Court finally took over all the power of the National Assembly, practically dismissing the body, which the opposition considered as a state coup. This decision provoked the rage of all segments of society, exhausted by constant shortages, hyperinflation and even hunger. Beginning in April, many Venezuelans had emerged in Venezuela, which sometimes brutally pushed government forces. The Venezuelan Social Conflict Observatory estimated that the country participated in more than 6,000 protests from April to late July, with more than 160 dead in the conflict.

During the summer, Oscar Perez, a member of the science police, stole a police helicopter, drove him to the centre of the Venezuelan capital, surrendered the grenades to the Supreme Court, and several times shot at the Interior Ministry. Interior. Perez, whom Maduro called "terrorist", managed to escape the city and lead the armed resistance until he was killed during the military rally in January 2018.

In July, Maduro finally founded the Constitutional Assembly - a body founded for the development and adoption of a new constitution to ensure stability and ended the protests, the president said. The measure is sharply criticised by the European Union, the South American trade organisation Mercosur and the US States Organization, which includes the United States and Mexico. The latter reinforced the sanctions against Madura, accused of organising a "false" election.

Meanwhile, the opposition organised an informal referendum against Maduro, which was supposed to be postponed, involving seven million Venezuelans. According to calculations, 98% of voters did not want a new constitution.

Venezuela is approaching 2018 with growing geopolitical tensions, constant violation of rights and freedoms, as well as the massive exodus of Venezuela - since 2014 more than 2 million people have left the country. The average inflation rate in 2017 has exceeded 1,000%, and GDP has lost 14%, the IMF says. Nevertheless, Maduro seemed to have had a trick in his bag.

Petro takes the field

For the first time, Maduro mentioned Petro, a Venezuelan cryptocurrency that was supported by oil at the end of December 2017. And bypass American sanctions. In January 2018, the fifth rate was tied to the barrel of oil and the first 100 million units were issued. Originally, the industry experienced this measure as the first "bituminization" of the sovereign state.

During 2018, the government actively promoted a national cryptocurrency to stop hyperinflation. At an international level, Maduro has asked ten countries of the Bolivarian Alliance - including Cuba - to support his initiative. Later that year, he argued that Petro would be used for international business transactions, although he avoided mentioning the countries that agreed to accept the oil-fueled currency.

Also, the petroleum-rich country was supposed to introduce Petro to the Organization of the Oil Exporting Countries (OPEC) in 2019 as the billing unit. Maduro even offered Petra to Russian Vladimir Putin. Nevertheless, Moscow, who always supported the Venezuelan domestic politics through diplomacy and investments, refused to accept Petro as a billing unit.

Meanwhile, in the country, Petro is actively used as a means to combat poverty, social injustice and hyperinflation. Venezuela has launched a crypto-bank for youth initiatives funded by Petro, who claimed to use Petro to finance housing for homeless people, forcing citizens to pay a passport into the currency they are supporting, making it a payroll, goods and service unit.

But the experts who studied Peter were far from optimistic. Reuter's alarming report - "In Venezuela, a new cryptocurrency cannot be found" - it was announced at the end of August. The news agency has announced that Petro is currently not trading in one of the major global cryptographic exchanges. Also, journalists suspected that Venezuelan oil would support it. According to the report, Atapirire - the area that Maduro defined as the real centre of support for the room support - did not point to recent activities. "There are no traces of oil here," local officials told the agency. The former oil minister, Rafael Ramirez, expressed his opinion by writing that "Petro [...] exists only in the imagination of the government".

American media Wired also met with local and South American experts. Jorge Farias, executive director of Venezuelan start-up Cryptobuyer, found that the state currency was backed by the national oil company PDVSA, which had a $ 45 billion debt and showed no signs of commercial activity. Roger Benites, executive director of BitInke, a Lima-based cryptographic clearing house, described Petra as a "smoke curtain" to conceal Maduro's failure to revive the domestic currencies devaluation. Dickie Armor, from Corre Innovation, shared his position and called Petro "Waterfall".

By the time Petro was finally launched in November, after a series of delays, Venetians and experts doubted his real value and, in general, its existence. While lovers in the cryptography studied Petrov's white paper and concluded that he had copied parts of the Dash documentation available in the GitHub repository, Maduro was forced to increase Peter's value by 3,600. up to 9,000 bolivars despite continued inflation.

Since retirement premiums turned into Petro, the country had to face another protest, this time led by older people who did not believe in oil coins. "I do not want Petra; I want my money," one of the protesters said.

Despite all the efforts, by the end of 2018, Petro was still "unbeatable" - either of the main exchanges did not index the play or accepted by any of the allies in the country. Venezuela continued to drown, while the rate of inflation, according to the most conservative estimates of the IMF, rose to 1.37 million by the end of the year. The opposition, however, provided much darker data - 1.7 million per cent in 2018 - which turned Venezuela into one of the three countries with the highest inflation rate in the world. History.

Big Final: Maduro vs Guaido

In May 2018, Maduro was re-elected for the second six-year term by voting with the lowest voter turnout - 40 per cent - from the 1958 democracy restoration in Venezuela. Against Madura, Henri Falcon and Javier Bertucci, have dismissed the results and reported on critical irregularities. The National Assembly also denied the results in shame, calling them "an election joke".

The EU stressed that the elections were not in line with the minimum international standards for a credible process, and included buying votes and suppressing opposition. The Lima Group - created in 2017 in countries such as Argentina, Canada and Brazil to combat the crisis in Venezuela - also rejected the voting results. Finally, the United States described the elections as "an insult to democracy" and "announced fraud". On the other hand, China, Cuba, Iran, North Korea, Russia and Syria supported Maduro and congratulated him on his re-election.

In August 2018 an attack on a non-dangerous aircraft was recorded in the centre of Caracas, where Maduro addressed the Bolivar National Guard. The official version shows that near to Maduro and other officials who participated in the flurry exploded two uncrewed aerial vehicles carrying explosives. The president himself claimed he had survived an attempted assassination of a terrorist. He promised to punish offenders and accused the United States and Colombia of helping terrorists. However, US National Security Adviser John Bolton and the Colombian government later denied any involvement in the incident.

Several arrests occurred during the week when the opposition claimed that the charges - as well as the assault itself - were planned. According to firefighters interviewed by the Associated Press, the incident could have been the explosion of a gas tank in the adjacent apartment.

Last January, Maduro swore an oath for a second term, against all looks. But this time, it seems that Venezuela does not follow a peaceful scenario. When the turmoil on the streets of Caracas on the morrow occurred, Juan Guaido, the 35-year-old opposition leader of the National Assembly, declared the President of the Republic of Venezuela in front of the crowd. It was immediately supported by US President Donald Trump and his administration, while many other countries quickly followed his decision.

At the time of the press, Guaido was supported by Canada, the vast majority of Latin American and United Kingdom countries, while the EU and Mexico called for dialogue, while China and Russia accused him of attempting a state strike. Maduro recently interrupted diplomatic relations with the United States, leaving embassy staff 72 hours to leave the country. However, Guaido insists that Venezuela will continue to restore the constitutional order while maintaining a dialogue with other countries.

The future of Venezuela can now be in the hands of the army. Defense Minister Vladimir Padrino Lopez now supports Madura as a legitimate president, and Russia calls on the United States not to intervene in the conflict. However, things can change at any time.

In the year of constant protests and ever-increasing tensions, neither Venezuela nor Maduro seems to exploit the entire Petro project. Even Guaido, who is quite optimistic about the cryptocurrencies, believes Petro is a fraud. And while Maduro's country is in flames, the president has entirely left his money backed by oil. What he desperately needs now is the most traditional value in the world, gold. However, gold bullion worth about $ 1.7 billion is frozen in England's bank, which does not support the current regime. A similar fate is waiting for an additional $ 6.3 billion in foreign exchange reserves held by the Venezuelan central bank, and no blockchain in the world could help Maduro recover it.

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