The Pandemic Depression
The Global Economy Will Never Be the Same
Venezuela’s refugee crisis is the largest in Latin American history. Worldwide, it is now second only to that of Syria. A staggering four million Venezuelans have fled their homeland, the majority since 2015. This number constitutes more than 12 percent of the country’s total population. Leaving behind a collapsed economy and mounting repression, over one million Venezuelans have fled since last November. The UN projects that the number of refugees will climb to 5.4 million by the end of 2019, while other researchers have predicted several hundred thousand more.
No country in Latin America has escaped the impact of Venezuela’s meltdown. Colombia, which shares a long border with Venezuela, now hosts the largest number of refugees—1.3 million, up from about 300,000 just two years ago. Another 710,000 Venezuelans traveled through Colombian territory in 2018 in transit to other destinations farther south. Peru hosts the second-largest number of Venezuelans (806,900), followed by Chile (288,200) and Ecuador (263,000). Caribbean states have smaller totals but the most refugees relative to their population.
Yet only a fraction of the international assistance dedicated to other major crises has been devoted to the outpouring of Venezuelan refugees. The United Nations High Commissioner for Refugees (UNHCR) and International Organization for Migration (IOM) asked the international community for $738 million to assist migrant-receiving countries in Latin America and the Caribbean in 2019. By early July, international donors had contributed a scant 23.7 percent of the requested funds. The shortfall, in the words of one senior Bogotá-based aid worker, is a “recipe for disaster.” Eduardo Stein, the UN special representative for Venezuelan refugees and migrants, pointed out that “Latin American and Caribbean countries are doing their part to respond to this unprecedented crisis, but they cannot be expected to continue doing it without international help.”
None of the migrant-receiving countries in Latin America has the financial wherewithal to provide shelter, food, medical care, and employment to such large numbers of hungry and vulnerable people. Public health and education are already overextended and underresourced in many of the receiving countries, and recent migrants are sicker than in the past. Many arrive having walked thousands of kilometers through rugged terrain and needing urgent medical attention. Some carry infectious diseases, such as measles and tuberculosis. Public health officials have observed a rise in sexually transmitted diseases such as syphilis and HIV/AIDS.
Only a fraction of the international assistance dedicated to other major crises has been devoted to the outpouring of Venezuelan refugees.
Colombia sits on the frontlines of this human tragedy, and its capacity to absorb ever hungrier and sicker Venezuelans is diminishing. By mid-2019, Colombian authorities had issued some type of formal documentation to about 52 percent of the Venezuelans in the country, with 46 percent of them receiving temporary residence permits that allow them to work, get health care, and enroll their children in schools. Not that long ago, millions of Colombians sought refuge in Venezuela, during Colombia’s decades of internal armed conflict. The memory has led Colombian officials and citizens to receive Venezuelans generously. In recent interviews in Bogotá at shelters, health clinics, bus stations, and other facilities, Venezuelan migrants spoke of ordinary citizens offering acts of kindness large and small, from food for their children to rides for those making the long journey on foot.
Yet public opinion shows signs of hardening. In a Gallup poll, the proportion of Colombian respondents who said they agree with the government’s policy of welcoming Venezuelans fell by 14 percent from May to June. In May, 55 percent of respondents said they approved of the policy and 41 percent said they disapproved; by June, the numbers were inverted, with 41 percent saying they approved and 55 percent saying they disapproved. Shocking images of large numbers of people sleeping in streets, parks, and other public places are undoubtedly stoking the negative sentiments. Intense competition for employment is also a factor. Colombia’s growth rate, like that of most countries in the region, is mediocre. The official unemployment rate is more than ten percent, and close to 50 percent of Colombia’s domestic labor force is in the informal sector. Evidence shows that immigration does not depress wages in the long term, but that does not stop many Colombians from suspecting that desperate Venezuelans willing to work for less than the minimum wage are stealing their jobs. The potential for resentment and xenophobia is especially high in border communities that are overwhelmed by the sheer numbers of migrants and where unemployment rates are far higher than the national average. Refugees with no other means of livelihood are vulnerable to being exploited by criminals and lured into the illegal economy, a trend that could worsen Colombia’s crime problem and further erode popular sympathy for individuals in need of protection.
Can the international community have grown inured to the demands of desperate migrants? The most recent UN report on refugees worldwide puts the total number at 25.9 million, with another 41.3 million people internally displaced. Images of death and destruction flow constantly from such places as Myanmar, South Sudan, Syria, and Yemen. Individuals, countries, and organizations have only so much to give, by way of both attention and resources.
Yet compassion fatigue hasn’t stopped the international community from providing more than $17 billion in assistance for Syrian refugees in less than a decade, approximately $3,000 per person. In the case of Venezuela, the Organization of American States estimates the number to be a scant $100 to $200 per individual.
The discrepancy may be explained in part by how other countries view the Venezuelan tragedy: as a regional or subregional crisis, not a global one. Although Spain has seen a recent influx of Venezuelan refugees, the impact of Venezuela’s collapse is largely confined to the hemisphere. Notably, some 68 percent of the financial support to host countries in the region has come from the United States. The European Union has provided less than six percent of the funding to date for Venezuelan refugees, even though it is the largest contributor to humanitarian assistance inside Venezuela. Furthermore, a number of European donors have long invested considerable resources in the Colombian peace process and may be reluctant to add to or divert that support. Some in the international community may even be waiting for the “day after” in Venezuela, when the country will have gigantic reconstruction needs.
The discrepancy may be explained in part by how other countries view the Venezuelan tragedy: as a regional or subregional crisis, not a global one.
But the problem is immediate and urgent. On an average day in 2018, an estimated 5,000 Venezuelans fled conditions in their country. Peru, Chile, and Ecuador have imposed new restrictions to make it more difficult for refugees to enter. But the exodus is unlikely to slow. On the contrary, more migrants will continue to leave as food, medicine, electricity, and clean water in Venezuela approach catastrophic lows, and their journeys will become more dangerous as they are forced to use illegal routes that expose them to the predation of traffickers and armed groups.
International actors should convene a donor conference to address the crisis. United Nations organs that work on this issue, such as the Response for Venezuelans platform of the UNHCR and IOM, should work together with international financial institutions, such as the World Bank, Inter-American Development Bank (IADB), and Development Bank of Latin America, not only to increase the commitments of large donors such as the United States but also to coax countries in Asia and Europe, particularly those with economic interests in Latin America, to take on a greater share of the responsibility. Meeting the emergency needs of refugees is not enough. Receiving countries require resources to strengthen their health and education systems and to generate employment opportunities for refugees along with their host communities.
International financial institutions can lighten the load on receiving countries by offering expanded grants and soft loans with generous repayment terms. In recent years, both the World Bank and the IADB have created special facilities for making grants to middle-income countries facing emergencies, including massive refugee flows. But the amounts offered thus far are modest relative to the need: the World Bank gave $31.5 million to Colombia in April, and in May the IADB set up a special $100 million fund for Venezuelan and Central American refugees. Circumstances call for bolder measures, such as a version of the $2 billion “regional sub-window for refugees and host communities” that the World Bank recently made available to impoverished African and Asian countries facing protracted refugee crises.
Ideally, the United States would step up and accept more Venezuelan refugees and asylum seekers, mirroring the generous response of Colombia. Venezuelans are now the largest group seeking asylum in the United States—as of January 2019, 31 percent of all claims filed with the U.S. Citizenship and Immigration Services were from Venezuelans. Between 2012 and 2017, only about 50 percent of Venezuelan petitions were granted, a number that has changed little in recent years.
Both parties in Congress support granting Temporary Protected Status to Venezuelans, which would allow them to live and work legally in the United States until conditions in their home country permit their return. Earlier this week, the House of Representatives failed to muster a two-thirds majority to push through a TPS measure on a procedural vote, even though it had majority support; the Senate has yet to act. But the Trump administration’s harsh crackdown on immigration makes such a measure unlikely anytime soon, with or without legislation.
Instead, U.S. foreign policy in Venezuela has inflicted maximum pain on the Venezuelan economy while failing to mitigate the humanitarian consequences of that punishment. The United States has, for example, imposed stringent sanctions on the state-run oil company, Petróleos de Venezuela, S.A. Starving Venezuela of oil revenues did not provoke the country’s economic collapse. Decades of corruption and mismanagement had already set that catastrophe in motion. But maintaining the oil sanctions amid a deepening humanitarian crisis allows Venezuelan President Nicolás Maduro to shift blame from himself and his cronies to the United States and the Venezuelan opposition. The U.S. government, the Lima Group, and proponents of a democratic transition should consider relaxing sanctions to permit a neutral third party with experience in humanitarian aid—not the Venezuelan government—to bring food and medicine into the country in exchange for oil. The Venezuelan economist Francisco Rodríguez has argued that such an “oil for food” program, if carefully designed, could help stave off what he warns could be an impending famine. Mitigating desperation within Venezuela could help slow migration to neighboring countries.
U.S. foreign policy in Venezuela has inflicted maximum pain on the Venezuelan economy while failing to mitigate the humanitarian consequences of that punishment.
The continued flow of Venezuelans to other countries in Latin America and the Caribbean is not sustainable. And it is only a matter of time before political systems throughout the hemisphere will feel the consequences for democratic governance occasioned by a rise in xenophobia and an ever-shrinking faith in the capacity of institutions to resolve people’s basic problems. If 55 countries from across the globe can withdraw recognition from Maduro and embrace Juan Guaidó as Venezuela’s interim president, then surely they can do more to assist the victims of dictatorship within Venezuela and throughout the region.
Getting in Would Be the Easy Part