- by Graham Holton
- The Guardian
- Issue #2197
Twin earthquakes of 7.2 and 7.5 on the Richter scale, followed by numerous aftershocks, have shaken the republic of Venezuela. Geologists have called it the biggest earthquake to hit the South American country since 1812. At time of writing, the death toll is at 1,943, with thousands of people unaccounted for and more than 10,000 people injured.
Interim President Delcy Rodríguez appeared on state television, alongside National Assembly leader Jorge Rodríguez and Interior Minister Diosdado Cabello, announcing emergency measures and activating the country’s disaster-response apparatus. ‘Together we will overcome this tragedy.’
Rodríguez emphasised national unity, warning that casualty figures would likely rise as rescuers search through 850 major collapsed buildings and reach isolated communities. The government mobilised the health-care network in Caracas, La Guaira, and other disaster zones. Hundreds of older buildings – built before the strict modern building codes – have collapsed or been rendered uninhabitable. Roads, bridges, electricity networks, telecommunications systems, and public facilities have been damaged. International humanitarian assistance has been offered by Colombia, United States, India, the United Nations, European and other countries.
A major priority of the Bolivarian revolution under Chávez and Maduro was provision of health services to poor areas. That network will be of immense value in the months ahead.
Transport services at the Simón Bolívar international airport have been suspended. The disruption to port facilities will hinder trade and relief efforts for some time. The closure of airports, schools, and transport systems means significant losses in productivity.
Businesses in affected areas have closed, workers have been displaced, and tourism has been disrupted. Power outages, transport disruptions, and damaged logistics networks could reduce productivity and exports in the short term.
Many of the hardest-hit communities were already experiencing economic hardship before the quakes. Recovery costs, loss of employment, and housing shortages are likely to increase poverty and place greater demands on social services. Reconstruction will require billions of dollars in public and private investment, placing additional pressure on a government already facing fiscal constraints. Venezuela’s economy is heavily dependent on oil exports.
The cost of rebuilding will be in the billions of dollars and slow Venezuela’s economic recovery and reduce its GDP by several percentage points. The disaster adds to the burden of housing shortages, unemployment, and reconstruction costs.
Venezuela was facing US sanctions, hyperinflation, shortages, declining state revenues before the disaster. This makes recovery more difficult. Limited access to international finance may force the government to rely heavily on foreign aid, loans from allies, and humanitarian assistance.
The Venezuelan government needs to be wary, as a reliance on large foreign investment may lead to what Naomi Klein called ‘disaster capitalism.’ Enforced neoliberal economic policies of deregulation, privatisation of state enterprises, mass layoffs, and reduced government intervention will lead to major societal shocks.
The coming months will require the distribution of aid and major reconstruction. This is Rodríguez’s first major challenge and good governance will increase her government’s popular support.
