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Their pact, meant to preserve democracy, came to dominate it. Party elites picked candidates and blocked outsiders, making politics less responsive. The agreement to share wealth fostered corruption.

Economic shocks in the 1980s led many Venezuelans to conclude the system was rigged against them.

In 1992, leftist military officers, led by Lt. Col. Hugo Chávez, attempted a coup. They failed and were imprisoned, but their anti-establishment message resonated, catapulting Mr. Chávez to stardom.

The government instituted a series of reforms that were intended to save the two-party system, but that may have doomed it. A loosening of election rules allowed outside parties to break in. The president freed Mr. Chávez, hoping to demonstrate tolerance.

But the economy worsened. Mr. Chávez ran for president in 1998. His populist message of returning power to the people won him victory.

Populism's Unwinnable War With the State

Despite Mr. Chávez's victory, the two parties still dominated government institutions, which he saw as antagonists or even potential threats.

He passed a new Constitution and purged government jobs. Some moves were broadly popular, like judicial reforms that reduced corruption. Others, like abolishing the legislature's upper house, seemed to have a broader aim.

"He was reducing potential checks on his authority," said John Carey, a Dartmouth College political scientist. Beneath the revolutionary language, Mr. Carey said, was "pretty savvy institutional engineering."

Distrust of institutions often leads populists, who see themselves as the people's true champion, to consolidate power. But institutions sometimes resist, leading to tit-for-tat conflicts that can weaken both sides.

"Even before the economic crisis, you have two things that political scientists all agree are the least sustainable bases for power, personalism and petroleum," Mr. Levitsky said, referring to the style of government that consolidates power under a single leader.

When members of the business and political establishment objected to a series of executive decrees in 2001, Mr. Chávez declared them enemies of the people's revolution.

Because populism describes a world divided between the righteous people and the corrupt elite, each round of confrontation, by drawing hard lines between legitimate and illegitimate points of view, can polarize society.

Supporters and opponents of a leader like Mr. Chávez come to see each other as locked in a high-stakes struggle, justifying extreme action.

A Coup Escalates Conflict Beyond Ideology

In 2002, amid an economic downturn, outrage against Mr. Chávez's policies swelled into protests that threatened to overwhelm the presidential palace.

When he ordered the military to restore order, it instead arrested him and installed an interim leader.

Mr. Chávez's foreign policy shifts, aligning with Cuba and arming Colombian insurgents, had angered some military leaders. His war on the elites turned out to carry risks.

The coup leaders overstepped, dissolving the Constitution and legislature, sparking counterprotests that quickly returned Mr. Chávez to power.

But his message of a revolutionary struggle against internal enemies no longer felt like a metaphor for reducing poverty.

Mr. Carey called it a "hugely polarizing moment" that allowed Mr. Chávez to portray the opposition as "trying to sell Venezuelan interests out."

He and his supporters now saw politics as a zero-sum battle for survival. Independent institutions came to be seen as sources of intolerable danger.

The licenses of critical media outlets were suspended. When labor unions protested, they were weakened by blacklists or replaced outright. When courts challenged Mr. Chávez, he gutted them, suspending unfriendly judges and packing the Supreme Court with loyalists.

The result was intense polarization between two segments of society who now saw each other as existential threats, destroying any possibility of compromise.

Converting Oil Into Loyalty

Shortly after the coup, Mr. Chávez faced another battle that would prove just as fateful. Workers went on strike at the state-run oil firm, Petróleos de Venezuela, or PDVSA, which he had long denounced for its associations with business elites and the United States.

The strike threatened to destroy the economy and Mr. Chávez's presidency. But it also presented an opportunity to stave off another uprising.

After the strike collapsed, he fired 18,000 PDVSA workers, many of them skilled technicians and managers, and replaced them with some 100,000 supporters.

Much of the firm's operating budget was diverted into programs for Mr. Chávez's political base, payoffs for government cronies and subsidies to keep his promise of affordable food.

In 2011, $500 million from a PDVSA pension fund found its way into a pyramid scheme run by government-linked financiers, none of whom faced prosecution. After running on smashing the corrupt elite, Mr. Chávez had merely established his own.

As an oil company, PDVSA was ruined. Production dropped despite a global boom in oil prices. The injury rate, measured in lost man-hours, more than tripled.

In 2012, a refinery exploded, killing at least 40 and causing $1.7 billion in damage, suggesting that even maintenance budgets had been siphoned.

Its cash reserves depleted and development projects stalled, PDVSA, and by extension the Venezuelan economy, was left without a cushion when oil prices dropped in 2014.

Mr. Chávez had set up Venezuela for not just economic collapse but also a political crisis. If his support relied on oil-fueled patronage, what would happen when the money ran out?

Replacing Urban Unrest With Urban Chaos

The 2002 coup taught Mr. Chávez that an alliance of convenience with armed groups known as colectivos could help him control the streets where protesters had almost brought him down.

The colectivos, funneled money and arms from the state, became political enforcers. Protesters learned to fear these men, who arrived on Chinese-made motorcycles to disperse them, often lethally.

The colectivos grew in power, challenging the police for control. In 2005, they expelled the police from a region of Caracas, the capital, that had tens of thousands of residents.

Though the government never officially approved such violence, it publicly praised colectivos, granting them tacit impunity. Many exploited this freedom to participate in organized crime.

Alejandro Velasco, a New York University professor who studies colectivos, said the groups were later joined by criminal "opportunists" who learned that "adding a little ideology to their operations" could win them impunity.

Criminality and lawlessness flourished, spiking murder rates.

Selling Off the Economy

President Nicolás Maduro, who took power when Mr. Chávez died in 2013, inherited an economy that was a shambles and tenuous support among elites and the public.

In desperation, he parceled out patronage. The military, with which he had less sway than his predecessor, got control of lucrative drug and food trades, as well as gold mining.

Unable to pay for subsidies and welfare programs, he printed more money. When this drove up inflation, making basic goods unaffordable, he instituted price controls and fixed the currency exchange rate.

This made many imports prohibitively expensive. Businesses shut down. Mr. Maduro printed more money, and inflation grew again. Food became scarce. Unrest deepened, and Mr. Maduro's survival grew more contingent on handouts he could not afford.

This cycle destroyed Venezuela's economy.

It also worsened street violence. With government stores empty, black markets mushroomed. Colectivos, less reliant on government support, took command of the informal economy in some areas. They grew more violent and harder to rein in.

Mr. Maduro tried to restore order in 2015, deploying heavily armed police and military units. But the operations became "blood baths," Mr. Velasco said. Many officers turned to criminality themselves.

Neither Democracy Nor Dictatorship

The political system, after years of erosion, has become a hybrid of democratic and authoritarian features - a highly unstable mix, scholars say.

Its internal rules can shift day to day. Rival power centers compete fiercely for control. Such systems have proved far likelier to experience a coup or collapse.

Mr. Maduro has struggled, as leaders of such hybrid systems often do, to assert control.

Without Mr. Chávez's personal connections or deep pockets, Mr. Maduro has little leverage with authoritarian elements dominated by political and military elites. Because he is deeply unpopular, his hold over democratic institutions may be even weaker.

After opposition groups won control of the legislature in 2015, tension between those two systems exploded into outright conflict. The Supreme Court, stacked with loyalists, briefly sought to dissolve the legislature's powers. This month, Mr. Maduro said he might seek a new Constitution.

Venezuela's paradox, Mr. Levitsky said, is that the government is too authoritarian to coexist with democratic institutions, but too weak to abolish them without risking collapse.

Protesters have spilled into streets, but appear deadlocked with security forces and colectivos. Francisco Toro, a Venezuelan political scientist, said it was unclear whose side the military would take if called to intervene.

With neither side able to exert control, little in the way of an economy or public order to take over, and a political system seemingly unable to break or bend, Venezuela has brought itself from wealth and democracy to the brink of collapse.

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How Venezuela Stumbled to the Brink of Collapse

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Their pact, meant to preserve democracy, came to dominate it. Party elites picked candidates and blocked outsiders, making politics less responsive. The agreement to share wealth fostered corruption. Economic shocks in the 1980s led many Venezuelans to conclude the system was rigged against them. In 1992, leftist military officers, led by Lt.

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INTRO
1. Oil
1.1 Pulling out of investments
1.2 TALK ABOUT PRICE
2 Food Shortages
2.1 Standard of living
2.2 Price of Living (due to hyperinflation)
3 Political unrest
3.1 Unemployment rate
3.2 (PLEASE INSERT)

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Venezuela is starving. The people of the once prosperous nation are now literally suffering-and in some cases, dying-from hunger. The socialist government, under President Nicolas Maduro, will not allow foreign relief aid, presumably because the government fears losing control. Protests continue, despite the lack of attention from much of the rest of the world, and the government continues to kill dissidents at a slow but steady pace.

All of this hunger-for food and for freedom-is entirely unnecessary and is the result of socialism and the oil curse. The oil curse is a concept that economists, political scientists and sociologists use to explain the deleterious economic affects caused by overreliance on revenue from a single natural resource.

In Venezuela, the failures of socialism were coupled with the government's over-reliance on revenue from a single commodity. Venezuela once boasted the world's largest proven oil reserves plus surplus agricultural production. There was no reason for Venezuela's economy to collapse, but the government and its central planners became dependent on oil revenue at the expense of food production and other industries. As recently as 2014, West Texas Intermediate oil traded at $90 per barrel. Today it is trading below $50 per barrel. Today, with low oil prices and Venezuela's inefficient oil production, the country so rich in energy resources has trouble keeping the lights on.

Because Venezuela and its socialist government became dependent on oil, it actually destroyed its own food production capacity. The government expropriated farms and related industries, as socialist governments are want to do. Without private ownership and without a focus on food production, the country's food dwindled. Crop farmers could not obtain pesticides from now-government-owned chemical companies, animal farmers could not obtain feed from crop farmers, and food ran short. The government stole the people's incentive to produce when they nationalized their businesses, and then the government ignored food production because it thought it could rely on oil riches.

In 2014, when oil prices were high, Venezuela's GDP per capita was equivalent to 13,750 USD. One year later, with dropping oil prices, it had fallen 7%. The concept of an oil curse is that a country-typically an autocratic country with centralized planning-becomes reliant on oil and ignores its other industries. The oil revenue feeds government coffers and secures the government's position of power. Over time, according to the concept, the rest of the country's economy atrophies and the government becomes entrenched at the expense of the people's liberty. When oil prices inevitably fall, the economy is not positioned to survive. Most scholars saw the oil curse as a problem in the Middle East, but it has never been so clearly evidenced as it is now in Venezuela.

Ironically, it was Juan Perez Alfonso, Venezuela's oil minister in the 1960s and a co-founder of OPEC, who first colorfully warned his nation (and others) of the oil curse. In 1975 he is quoted as saying:

"I call petroleum the devil's excrement. It brings trouble...Look at this locura -waste, corruption, consumption, our public services falling apart. And debt, debt we shall have for years."

And today, the people are starving.
Ellen R. Wald, Ph.D. is a historian and scholar of the energy industry. She writes and consults on the intersection of geopolitics and energy.

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Venezuela's Melt Down Explained By The 'Oil Curse'

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Venezuela is starving. The people of the once prosperous nation are now literally suffering-and in some cases, dying-from hunger. The socialist government, under President Nicolas Maduro, will not allow foreign relief aid, presumably because the government fears losing control.

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By Paul BonicelliPaul J. Bonicelli is professor of government at Regent University, and served as the assistantadministrator for Latin America and the Caribbean of the United States Agency for International Development.

Scattered among the numerous commentaries on Venezuela's spiral into chaos are suggestions for how to resolve the economic crisis. Little is said about the real cause of the economic problems, which is the politics of Venezuela - and it has been the problem for quite some time. Example: Jeff Spross at The Week wrote recently about the travails of Venezuela and how to "fix it," but focused on the regime's economic policy. Mark Weisbrot of the Center for Economic Policy Research argues similarly, writing that the regime's currency exchange rate policy has lead to soaring inflation and a black market. That black market distorts the economy and destroys the incentive for producers to supply the basic goods for which citizens clamor.

I applaud their accurate analysis regarding the foolish and counterproductive economic policies of the regime, but these analysts and commenters fail to offer a true "fix" for Venezuela because they are not focused on what really ails the country. Venezuela is a dictatorship, and has been since Hugo Chavez took power; the policies that strangle the economy are only symptoms of the regime's authoritarianism.

I have written about this before at The Federalist ( here and here) and here at Shadow Government. Venezuela used to be one of the success stories of Latin America even though it was never fully democratic and always a country of rich elites dominating the poorer masses without a fully developed middle class. But all that changed for the worse when Hugo Chavez, a former coup-leader, embarked on the path of a statist-socialist populism in the late 1990s. He called his project Bolivarian Socialism, thereby sullying the Great Liberator's name; the better name is Chavismo, for it is Chavez and his cronies that deserve all the opprobrium for the failures of their project.

Once in power, Chavez implemented a dictatorship and took over and destroyed the once thriving oil industry. He intimidated every independent sector of the economy and social life into subservience. He died before he had to face the full fruition of his policies. As Venezuela crashed and his popularity plummeted, the opposition used the regime's failures to finally take back the legislature, but now political stalemate rules between the presidency held by Chavez's inept successor, Nicolas Maduro, and the opposition-held assembly. Things have gotten much worse in the last six months. The regime jails its political opponents ( including business leaders it falsely accuses of hoarding); Venezuelans go without basic goods like toilet paper and nourishing food; and the government appears helpless to deal with murder, robbery, assault, and corruption. Vigilantism is replacing formal policing. People die in pools of their own blood in filthy hospitals for lack of prescriptions and care. To save energy and ease the strain on the budget, government employees are required to show up for work only two days a week.

Chavismo - which is nothing more nor less than authoritarianism - has ruined Venezuela, as authoritarianism usually does. With unchecked political power, dictators are free to engage in any dumb idea they choose without a reckoning. For those who think Deng's China or Pinochet's Chile are examples to the contrary, note well that neither saw any economic thriving until they embraced a market economy, and only an economic illiterate or a moral idiot would encourage other countries to try their path with all the human rights abuses and instability that come with dictatorship. Chile mercifully passed into democracy with a push from the Reagan administration and its economy does well, while the Chinese Communist Party's dictatorship breeds corruption and mismanagement; its economic model is obviously shaky, if not terminal. The comparison between Chile and Venezuela is also quite telling.

Authoritarianism ruins countries because in destroying the liberties of the people, it crushes creativity and the entrepreneurial spirit, and hinders the application of everyone's talents and labor in building prosperity. Human flourishing, which should be the goal, is not possible when the state tries to run the economy because economics is best understood as a human endeavor that encompasses the material as well as the spiritual. That is, we are more than matter, so econometrics and fiscal formulas are insufficient to promote lasting and stable economic growth. It is human liberty to flourish that matters first: all the rest is logistics.

But that is not what many economists and development workers see when they look at Venezuela and the scores of other countries ruined and impoverished over the years by statism, socialism, and big government planning. Why do smart people miss the most obvious facts? One reason is that they wish to avoid being criticized for attacking the politics of developing countries. Having worked in this field for years I know that most of these smart people know exactly what causes economic problems, but they either cannot or will not bring themselves to say so publicly. Another reason is that some are so enamored of their econometric cyphering and so focused on the material element of humankind that they won't consider the moral and spiritual elements. They assume that poor countries can flourish with the right technical analysis and advice. They focus on the symptoms of dictatorship instead of the actual problem of dictatorship itself.

Venezuela doesn't just need some economic tinkering; it doesn't simply need reforms to its currency exchange rules. It needs a constitutional and republican political order; it needs democratic capitalism (see Michael Novak's timeless work, The Spirit of Democratic Capitalism, for the diagnosis and the cure). The donor nations of the world, the international aid agencies, and the opinion leaders, should have been decrying the lack of a free political order in Venezuela for all the years that Chavez and his cronies were ruining the country. With soaring poverty and crime, with thousands of protestors in the streets, with the country on the verge of a civil war, it is time for some clarity about the root problems in Venezuela. In 2016, the answer to the kinds of problems Venezuela is enduring is human freedom, not technocratic tinkering.

Photo Credit: Anadolu Agency / Contributor

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Venezuela's Problems Are Political, Not Economic

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By Paul BonicelliPaul J. Bonicelli is professor of government at Regent University, and served as the assistantadministrator for Latin America and the Caribbean of the United States Agency for International Development. Scattered among the numerous commentaries on Venezuela's spiral into chaos are suggestions for how to resolve the economic crisis.

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The people of Venezuela is suffering the worst economic crisis in history ,   undergoing emergency procedures such as basic necessities.
As of 2017, Venezuela is facing a negative growth rate of -8%, an inflation rate 482% & an unemployment rate is 17%.

Under the reign of Nicolas Maduro, the people of Venezuela has suffered even more after the Oil crisis in 2014. in response to solving oil crisis , the government decided to print more money to cover for the decreasing incomes of the people in Venezuela.
This has resulted in Inflation and reduced the standard of living for the people, with prices of groceries increasing by up to 25%.

Despite its emergency procedures to ration basic necessities, the unresolved problem has led to an increased popularity of black markets , of which those that have been supported by the socialist party of Venezuela.

With a corrupted reputation, the crisis is likely to get even worse , as the government continues to use the slowly depleting country's gold reserves to pay its international debts.

The Maduro government has regional allies that have protected it from external pressure.

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Venezuela is suffering the worst economic crisis in its history. Ordinary people in the oil-rich country are regularly going without food. Three-quarter empty supermarkets are being ransacked by angry, hungry mobs. The government has declared a state of emergency, food is now being transported under armed guard, and basic necessities are being rationed. People have to queue for hours and sometimes overnight on their assigned days to receive staples like rice and cooking oil.

Venezuela is suffering the worst economic crisis in its history. Ordinary people in the oil-rich country are regularly going without food. Three-quarter empty supermarkets are being ransacked by angry, hungry mobs. The government has declared a state of emergency, food is now being transported under armed guard, and basic necessities are being rationed. People have to queue for hours and sometimes overnight on their assigned days to receive staples like rice and cooking oil.

By IMF figures, it has the world's worst negative growth rate (-8%), and the worst inflation rate (482%). The unemployment rate is 17% but is expected to climb to near 30% in the coming few years.

The shadow of hunger, the desperation of the crowds and the spread of unrest and criminality threaten the government of Nicolás Maduro, three years after he was bequeathed power by the dying revolutionary strongman, Hugo Chávez. The opposition has launched a drive to canvas signatures for a petition for him to step down. That will be a difficult task in the face of a state-run electoral system determined to thwart it, but the state may implode even if the recall referendum fails.

How did such an oil-rich state collapse so catastrophically?

The Maduro government has blamed the crisis on the US and rightwing business owners who it accuses of cutting production to sabotage the economy, but Maduro has inherited a ruinous state-run system from Chávez to which economists say he has added some damaging mistakes of his own. Chávez build his popularity on oil money and foreign debt, using both to fund consumption, while nationalising more than 1,200 private companies deemed not to be functioning in the public interest. But in 2015 the oil price was cut in half and Venezuela's reckless public finances helped make it a high-risk debtor, cutting the country's access to international capital.

The Maduro government has responded to the consequent hole in public finances by printing money, fuelling inflation. It's estimated that the cost of basic groceries that would keep a family going through a week increased by more than 25% between March and April, and now costs 22 times the state minimum salary.

The state has tried to ration basic foodstuffs and set their prices, but the consequence is they have simply disappeared from the shops into the black market. The opposition says the direct distribution of food has been politicised by being channeled through local committees run by Maduro's United Socialist Party of Venezuela.

According to Transparency International, Venezuela is the ninth most corrupt country in the world. Member's of Maduro's family and immediate entourage have been implicated in drug smuggling and hundreds of billions of dollars are believed to have been syphoned out of the economy.

The crisis is likely to get even worse in the near future.

The government has been running through the country's gold reserves to pay its international debt service and finance at least some basic imports, but those reserves are now dwindling, and Maduro will either have to default or stop importing food. Both options are potentially catastrophic.

Will Maduro be brought down by the recall referendum?

The opposition have put high hopes in a referendum, and launched a signature drive in April but Venezuela's National Electoral Council (CNE) has imposed a set of high hurdles for a petition to pass before the choice can be presented to the general population. Roughly 1.3 million people signed a petition for a recall vote - far more than the 200,000 required by law, but 600,000 of the signatures have already been rejected by the CNE, and people have been queueing for hours to validate the rest of the signatures by having their fingerprints scanned. Even if they are found to have passed the required threshold of 1% of voters, that just allows them to go forward to a second petition, in which opponents would have to amass close to 4 million votes to trigger a recall vote.

The Maduro camp argues the opposition have left the petition too late for a referendum this year, a claim his opponents vehemently contest. The issue of timing is critical. If Maduro is ousted after January 2017, his place can be passed to his vice-president, keeping power in Socialist party hands.

How has the rest of the region responded?

The Maduro government has regional allies that have protected it from external pressure. Recently the secretary general of the Organisation of American States, Luis Almagro told the Guardian that Argentina had been working behind the scenes to obstruct an OAS assembly to discuss the economic crisis and human rights crises in Caracas, amid reports that the two governments had done a deal involving guaranteed Venezuelan support for Argentina's candidate for UN secretary general, Susan Malcorra. Venezuela's other neighbours have also been accused of standing on the sidelines - for either economic or ideological reasons - while the country slides into chaos.

The crisis may be forcing a thaw in relations with the US, long presented as a bogeyman by Chávez and then Maduro. The US under secretary of state, Thomas Shannon, flew to Caracas this week, following a meeting at the OAS between John Kerry and his counterpart, the Venezuelan foreign minister, Delcy Rodríguez.
Topics

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Venezuela's worsening economic crisis - the Guardian briefing

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Venezuela is suffering the worst economic crisis in its history. Ordinary people in the oil-rich country are regularly going without food. Three-quarter empty supermarkets are being ransacked by angry, hungry mobs. The government has declared a state of emergency, food is now being transported under armed guard, and basic necessities are being rationed.

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Venezuela is in the grip of a major crisis. For the last month, hundreds of thousands of protesters demonstrating against the government of President Nicolas Maduro have been met by riot police almost daily.

At least 37 people have died in the fierce crackdown by security forces, according to the Associated Press, with some 700 wounded. More than 1,800 people have been arrested since early April, according to rights group Penal Forum.

NBC News breaks down what led to the turmoil, what could come next, and why it matters to America.

Why are people protesting?

The economy is a mess.

Despite having the world's largest oil reserves, Venezuela is suffering from a deep recession and hyper-inflation.

Prices rose by 800 percent in 2016, with the International Monetary Fund predicting inflation could hit 2,200 percent by the end of 2017. Meanwhile, the economy shrunk by 18.6 percent last year, according to Reuters.

At the same time, food and medicine shortages are creating a humanitarian emergency. Shoppers, forced to wait in long lines to buy basic supplies, are often met by empty grocery shelves. Hospitals are suffering from acute shortfalls of everything from antibiotics, to basic sanitation equipment like medical gloves and soap.

The current protests were triggered by a Supreme Court decision to strip power from the National Assembly, the opposition-held Congress - a move widely thought to be aimed at concentrating power in the hands of Maduro's increasingly unpopular government.

For the last month, people - from students to housewives and retirees - have taken to the streets to express their outrage, confronting National Guard troops armed with tear gas and water cannons. On May 4, footage emerged of an armored car rolling over a defiant crowd.

Roberto, a 51-year-old Caracas resident who owns his own electrical supplies business, explained why his fellow Venezuelans were taking to the streets.

"It is common to find people scavenging for food at garbage dumps and everywhere people are eating off garbage cans," said the father-of-one who spoke on condition that his last name was not used out of fear of government reprisal. "People are starving. You see misery everywhere."

PHOTOS: In Venezuela, Upheaval Shows No Signs of Slowing Down

He said he sells "20 times less" than he used to and is just living off savings, which he fears may run out soon. Despite being tear gassed at recent demonstrations, he said he will continue to march because he has no choice.

"A lot of people have left the country, those that can have gone overseas. But for those like me that are still here, all we can do is fight," Roberto said. "We are fighting for free and honest elections, we want to recover democracy."

Gustavo Arnavat, senior advisor at the Center for Strategic & International Studies, told NBC News that these conditions "have produced a political and constitutional crisis that are precipitating the complete collapse of the state."

"Even former supporters of Hugo Chavez are starting to turn against the government and policies of president Maduro," he added, referring to the current president's predecessor and father of "Chavismo" - a Latin American left-wing ideology following the principles of Simon Bolivar who fought for colonial independence from Spain.

What happened to Chavez?

For decades, the country was controlled by a small elite and there was extreme disparity between the rich and poor. Late president Chavez was elected in 1999 on the promise that he would share Venezuela's immense oil wealth with the poor - the country derives 95 percent of its export earnings from petrochemicals.

Fueled by high oil prices that went from $10 barrel when he took office, to over $100 when he died of cancer in 2013, Chavez enacted a series of policies aimed at redistributing wealth. His government nationalized parts of the country's economy - from oil rigs to telecommunications firms to banks - forcing many companies to flee the country.

As the self-proclaimed leader of the "Bolivarian Revolution," Chavez frequently railed against the U.S. - famously calling President George W. Bush "the devil" during a speech at the United Nations General Assembly in 2006.

Maduro, Chavez's hand-picked successor, was elected by a thin margin in 2013, but came to power as oil prices plummeted by more than 50 percent.

"After Chavez's death, Maduro has just continued and accelerated the authoritarian and totalitarian policies of Chavez," said Shannon K. O'Neil, senior fellow for Latin American Studies at Council on Foreign Relations.

To analysts, the current emergency can be attributed to the economic crisis brought on by the fall in crude oil prices - which today are trading at about $46 a barrel - coupled with the gradual undermining of the country's democratic institutions.

"If oil was still at $100 barrel, we would not be having this conversation," Arnavat said.

PHOTOS: Venezuela's Opposition Activists Protest in Caracas as Unrest Enters Fourth Week

What Maduro has chosen to do with the country's reduced income precipitated the current troubles, according to O'Neil.

"There has been a conscious choice by the government to use the money it has to pay off international debts and not to pay for food and medicine," she added.

How is Maduro hanging onto power?

This week Maduro called for an assembly to rewrite Venezuela's constitution.

Opposition leaders say this is just a bid to stay in power by putting off regional elections scheduled for this year and a presidential vote in 2018. Opinion polls have suggested the socialists would lose both.

"You wanted your elections," Maduro said mockingly of the opposition while announcing the constitutional rewrite on Wednesday. "Here are your elections."

Maduro has also moved several prominent military officers into positions of power within the government, a move O'Neil says is meant to "solidify their support so they don't turn on him."

The government has also steadily curtailed democratic freedoms - restricting the free press, imprisoning opponents and preventing them from running for office.

Why should Americans care if Venezuela becomes a failed state?

For one thing, the Venezuelan crisis could spill over its borders and undermine neighboring countries and the continent as a whole.

"One of the successes of the Western Hemisphere is that almost all the countries - Cuba excepted - are democracies. And that's a model Americans believe in," said O'Neil.

"That matters to the U.S.," she added.

A disintegration of the government will also reverberate economically and in terms of security.

"A collapse of the state in Venezuela will produce financial, economic, regional and security risks for the United States," said Arnavat, who also served as U.S. executive director at the Inter-American Development Bank, the largest source of development financing for Latin America and the Caribbean, during the administration of President Barack Obama.

There could also be a huge impact on oil prices in the U.S. If the government truly collapses, it could negatively impact oil production in Venezuela, a founding member of OPEC, which in turn could mean higher prices at the pump in the U.S. and worldwide.

There is also a fear that if there is a power vacuum, the country could become a safe harbor for terrorists and drug traffickers - which could have a destabilizing effect in the region and potentially even create a migration crisis in neighboring countries.

"From a humanitarian perspective, and given the presence of several hundred thousand residents in the U.S. of Venezuelan origin, the vast majority of which Iives in Florida, there will be an urgent call for action for the U.S. to step in and provide assistance," said Arnavat.

What's the U.S. stance on Venezuela?

The State Department condemned the dissolution of Venezuela's National Assembly as "a serious setback for democracy" and the Trump administration is looking to put pressure on Maduro by considering stronger economic sanctions.

A group of Republican and Democratic senators also introduced a bill in early May that would provide $10 million in humanitarian aid to the country, require the State Department to coordinate a regional effort to ease the crisis, and ask American intelligence to report on the involvement of government officials in corruption and the drug trade.

PHOTOS: Venezuelans Mount Pressure on Government as Protests Intensify

"It may be tempting to note that the administration has more important domestic and foreign priorities, but if Venezuela collapses, it will become a major priority," Arnavat said. "And the ability of the U.S., as the world's and region's leader, to manage the crisis will establish a precedent and be part of President Trump's legacy."

How bad can it get?

"So long as the economic crisis and human suffering remains unabated, and no political solution is reached, things can only get worse," according to Arnavat.

Dr. Jennifer McCoy, a professor at Georgia State University who specializes in Latin American politics, also said the situation could get "much worse" and warned that "things could spiral very quickly if people don't see significant electoral change."

She pointed out that while the country has historically been very peaceful, Venezuelans are very well armed - particularly because of the violent crime wave that hit the country in recent years. The U.S. Overseas Security Advisory Council (OSAC), which aims to create effective security communication between American private sector interests worldwide and the State Department, called it "one of the deadliest countries in the world" in its 2017 Crime and Safety Report.

What's next?

What happens now will depend on the people on the streets, "but also on the military," McCoy said.

She added that Maduro's call for a constitutional rewrite "looks like a gambit by the president to calm the current unrest in the streets and postpone elections that he fears he will lose."

"The next step will depend on how big of an outcry there is in Venezuela and if the military continues to support the president or if there is international outcry."

CFR's O'Neil warned that a spiral downward could come swiftly.

"It's a slow moving crisis - which can last longer than you think, but when they end, they end quickly," she said.

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What's behind Venezuela's crippling crisis, and why it matters to the U.S.

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Venezuela is in the grip of a major crisis. For the last month, hundreds of thousands of protesters demonstrating against the government of President Nicolas Maduro have been met by riot police almost daily. At least 37 people have died in the fierce crackdown by security forces, according to the Associated Press, with some 700 wounded.

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What is behind Venezuela's crippling crisis?

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What is behind Venezuela's crippling crisis?

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The economy is in a mess

Despite owning the world's largest oil reserves, Venezuela is suffering from a deep recession and hyper-inflation
For decades, the country was controlled by a small elite and there was extreme disparity between the rich and poor. Late president Chavez was elected in 1999 on the promise that he would share Venezuela's immense oil wealth with the poor

Fueled by high oil prices that went from $10 barrel when he took office, to over $100 when he died of cancer in 2013, Chavez enacted a series of policies aimed at redistributing wealth. His government nationalized parts of the country's economy — from oil rigs to telecommunications firms to banks — forcing many companies to flee the country.

Maduro, Chavez's hand-picked successor, was elected by a thin margin in 2013, but came to power as oil prices plummeted by more than 50 percent.

After Chavez's death, Maduro has just continued and accelerated the authoritarian and totalitarian policies of Chavez

To analysts, the current emergency can be attributed to the economic crisis brought on by the fall in crude oil prices — which today are trading at about $46 a barrel — coupled with the gradual undermining of the country's democratic institutions.

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4 reasons why Venezuela became the  world's  worst economy 

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4 reasons why Venezuela became the  world's  worst economy 

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- Economic crisis: three years of recession
Venezuela is in its third year of recession. Its economy is expected to contract 10% this year, according to the International Monetary Fund. The IMF forecasts Venezuela will be in recession until at least 2019.

While the economy shrinks, the price of goods is skyrocketing. This year, inflation is expected to rise 475%, according to the IMF.

-  Their dependence on oil
Things got really bad when oil prices started to plunge in 2014. Venezuela has the world's largest oil reserves, but the problem is that oil is the only game in town.  And ever since the dip in oil prices in 2014  it has taken a toll on the countries economy
-  Soaring food price and broken hospitals
Venezuela's food shortages became extremely severe this year. Venezuelans went weeks, in some cases months, without basics like milk, eggs, flour, soap and toilet paper.
-  Running out of cash and gold
Venezuela is running out of cash quickly. It doesn't have enough money to pay its bills for too long.  It owes $15 billion between now and the end of 2017, while the nation's central bank only has $11.8 billion in reserves.

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Venezuela's multi-year economic crisis  creates problems of scarcity & suffering month after month, with statistics showing 3/4 of respondents losing an average of 19 pounds between 2015 & 2016.

Since the oil crisis problem , Venezuela has been unable to crawl out of the plunging oil prices. This is with reference with government short term efforts in terms of the fiscal policy as well as over reliance on imports. As such, inflation in the country is skyrocketing from 1660% to nearly 3000% by next year.

This economic chaos has widen its effects to create a malnutrition crisis as well as a country ridden with diseases such as Malaria.

The main reason for the Crisis in Venezuela would be the the government decision to put too much reliance on their largest oil reserves in the world as one of the only ways to raise revenue within the country. Despite owning the largest area in oil reserves, they refused to invest in domestic production and was heavily impacted by the plunging oil prices during the 2014 economic crisis.

Another reason would be the political change in government when Chavez passed away.

(NOT COMPLETED YET)

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Venezuela's economic crisis is so dire that most people have lost an average of 19 pounds

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About a third of the country is skipping meals to get by.