Opinion | Venezuela’s crisis is a lesson for other developing countries

First, governance – the government’s ability to deal with the country’s problems – is crucial. As the basic structure of a nation, the government is involved in various aspects of daily life and should be competent enough to deal with them properly. Therefore, it must have a clear vision, respond to the demands of different groups, and try to make the majority of people happy by offering economic benefits.

Venezuela has all the assets it needs for rapid economic growth, not least thanks to its great natural resources. However, in the face of strong opposition, both the Chávez and Maduro administrations have failed to maintain political and social order, failing to implement policies that ensure that market forces play a decisive economic role and that talented people want to stay in the country to work hard for their country.

Second, political stability is the foundation for promoting economic development and building a harmonious society. In its absence, policies cannot be properly implemented, institutions such as the legal system can fail, social order cannot be guaranteed, and the investment environment deteriorates. Order and harmony are replaced by “street democracy.”

Unfortunately, Venezuelan opposition forces have had great success in organizing marches, demonstrations, protests and strikes, depriving the country of political stability and worsening investment conditions.

Third, the country’s search for a development path must be based on its political realities. The government should constantly examine and adjust its development path to changing internal and external conditions, as well as people’s aspirations.

The opposition, supported by the United States, is very strong, and the government has been unable to find political consensus on almost anything. Furthermore, Venezuelan society is very divided between the haves and the have-nots. Without social cohesion, any attempt to change the country’s path of development is doomed to failure.

Fourth, the way to enlarge the pie is as important as its division. The unequal distribution of income and the resulting social injustice is one of the greatest problems of Latin American countries. In Venezuela, Chavez and Maduro implemented many socio-economic policies to improve the welfare of the lower classes. However, a long period of economic stagnation made the fiscal burden too heavy for the government, especially as oil production and revenues declined.

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Global Division on How to Handle Venezuela Crisis

Global Division on How to Handle Venezuela Crisis

This does not mean that Venezuela should have spent money only on investments in productive sectors. Venezuela and other Latin American countries urgently need policies that put people first to improve social justice. But to be able to distribute the pie fairly, it must first be bigger.

Finally, external interference and sanctions will not solve the crisis in any country. Venezuela’s economic problems are rooted in government policy failures, such as the lack of stimulation of the market and the private sector. But the United States is also behind the crisis in Venezuela.

Venezuela has suffered enough in decades of crisis. Let’s hope that this time the end of the latest turmoil will be different.

Jiang Shixue is a distinguished professor at the Macau University of Science and Technology