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Venezuela: The Biggest Humanitarian Crisis That You Haven’t Heard Of

Summary:
Venezuelans are fleeing their home country in large numbers due to the economic failure of socialism as well as the increasing authoritarianism of the Venezuelan government.  The economic collapse there, inflation reached tens of thousands of percent this year, and the escalating brutality of the Maduro dictatorship are creating a crisis unlike any faced in South America in decades – if ever.  This blog post will provide some information on the scale of the Venezuelan exodus and some suggestions for what other countries can do to mitigate problems caused by the flow of refugees and asylum seekers.    Background The roots of the current collapse of Venezuela run deep. Hugo Chavez became the president of Venezuela in 1999 and immediately set about concentrating economic power in the

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Venezuelans are fleeing their home country in large numbers due to the economic failure of socialism as well as the increasing authoritarianism of the Venezuelan government.  The economic collapse there, inflation reached tens of thousands of percent this year, and the escalating brutality of the Maduro dictatorship are creating a crisis unlike any faced in South America in decades – if ever.  This blog post will provide some information on the scale of the Venezuelan exodus and some suggestions for what other countries can do to mitigate problems caused by the flow of refugees and asylum seekers.   

Background

The roots of the current collapse of Venezuela run deep. Hugo Chavez became the president of Venezuela in 1999 and immediately set about concentrating economic power in the government and political power in himself personally.  He instituted tight government controls on capital, exchange rates, and started a more irresponsible monetary policy that created chaotic financial market conditions that further justified his nationalizations of business and confiscations of private property.  Revenues from the Venezuelan oil industry helped keep the government and economy afloat while the private economy suffered under increasingly harsh and punitive restrictions.  Chavez died in 2013 and was succeeded by Nicolas Maduro who continued Chavez’s economic policies and accelerated the concentration of political power in himself.  The collapse of oil prices beginning in 2014 exposed the economic damage wrought by Chavez and Maduro as inflation took off, GDP shrank, and Maduro’s regime responded with increasingly brutal police crackdowns that are continuing to today.  Most watchers of Venezuela conclude that the current death spiral began in 2015, the year after the decline in oil prices.    

The Scale of the Exodus

The number of people who have left Venezuela is staggering.  Estimates usually range from 1.6 million to 4 million Venezuelans have left their home country.  The International Organization for Migration (IOM) estimates that about 2 million Venezuelans are living outside of Venezuela as of June 2018, a number that has increased by more than a million since 2015 but is still likely an underestimate.  For instance, the number of Venezuelans living in Columbia, Peru, Chile, Brazil, Ecuador, Argentina, and Uruguay in June 2018 was over 1.85 million, up by a little less than one million since 2017. 

To try and reconcile conflicting and confusing estimates, I combined a few different sources and make some simple assumptions.  First, I made a few conservative assumptions when estimating the number of Venezuelans in Argentina, Uruguay, and Brazil.  I estimated that the 2018 number of Venezuelans in Argentina and Uruguay was unchanged from 2017.  For Brazil, I relied on recent news reports to estimate that there was a net 22,000 increase in the number of Venezuelans there in 2018 over 2017.   I then added the additional one million Venezuelans living in those countries to the 1.64 million Venezuelans who were estimated to be living outside of their home country in 2017.  Thus, I estimate that 2.61 million Venezuelans are living abroad in mid-2018 (Figure 1).

Figure 1: Venezuelans living abroad

The emigrant Venezuelan population is equal to about 7.6 percent of all Venezuelan nationals (Figure 2).  The economic collapse in Venezuelan began in 2015, the year after the oil price started declining.  The percent of Venezuelans living abroad increased from 2.2 percent in 2015 to 7.6 percent in 2018 – a 3.5-fold increase.  The Syrian refugee crisis, which began with the start of the Syrian civil war in 2011, is the biggest in recent history.  The Syrian refugee crisis boosted the number of Syrians living abroad by 4.3-fold after four years of civil war.

Figure 2: Venezuelans and Syrians living abroad as a percent of their respective populations

Venezuela has a much larger population than Syria so it will take longer for a fifth of them to flee the country if it ever gets to the point.  However, the number of Venezuelans living outside of their country could meet or exceed the numbers of Syrians in a similar position in the next couple of years if trends continue (Figure 3).  According to a recent poll, about half of Venezuelans between ages 18 and 24 said they wanted to leave Venezuela and 55 percent of upper-middle-class respondents said they wanted to.  If those polls are accurate then the duration of the economic crisis in Venezuela will determine whether it reaches Syrian refugee-level proportions.

Figure 3: Syrians and Venezuelans Living Abroad

As of mid-2018, I estimate that about 71 percent of the Venezuelans who have fled are in other South American countries (Figure 4).  About 12 percent have made it to Canada or the United States, 5 percent are in Central America, Mexico, or the Caribbean, and 13 percent are in other parts of the world.

Figure 4: Destination countries

In the United States, 65,621 Venezuelans have applied for asylum at ports of entry since February 2014, picking up substantially in 2016 and 2017 (Figure 5).  The U.S. federal government reacted to this by cutting the number of tourist B-visas that it issues to Venezuelans, aided most recently by additional restrictions put on Venezuelans through President Trump’s so-called travel ban, but the number of asylum seekers continued to grow at least through the end of 2017 (Figure 6).

Figure 5: Venezuelan asylum seekers
Figure 6: Venezuelan asylum seekers and B-Visa issuances

How Venezuela’s Neighbors are Reacting

About 71 percent of Venezuelans who have fled have gone to other countries in South America.  These countries have reacted in myriad ways to the influx of Venezuelans, mainly by issuing work and residency permits to some of them while nations bordering Venezuela are stepping up border security and deploying troops.  Other nations not mentioned do not have a special policy for admitting Venezuelans.   

In the course of writing this blog, the Migration Policy Institute published a wonderful short paper by Luisa Feline Freier and Nicolas Parent on the Venezuelans emigration crisis.  Many of my comments in this section are based on their excellent work.

Colombia

Colombia initially offered a Special Stay Permit to Venezuelans as well as Border Mobility Cards which allowed free travel between the two countries.  In February 2018, Colombia stopped issuing both permits due to worries that the influx of Venezuelans was too great.  Now, many are entering illegally in dangerous circumstances.

Brazil

Brazil created a temporary residency program for Venezuelans in 2017.

Peru

Peru created the Temporary Stay Permit (PTP) for Venezuelans in January 2017.  The administrative backlog for the PTP is huge so many Venezuelans are applying for asylum instead. 

Conclusion

The Venezuelan emigration crisis is going to worsen before it improves.  If the labor market and economic integration of Syrians refugees outside of Syria since 2011 can offer any lessons to South America, they are:

  1. Allow Venezuelans to legally work in host countries so that their employment and labor force participation rates rise.
  2. Deregulate labor markets generally because more legal work opportunities will reduce Venezuelan labor market competition with locals. 
  3. Legal employment reduces the net cost of social services and charity as well as increases feelings of belonging and contentment among the emigrants.

Special thanks to Maria Rey for her help on this.

Alex Nowrasteh
He is an immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity. His popular publications have appeared in the Wall Street Journal, USA Today, the Washington Post, the Houston Chronicle, the Los Angeles Times, the New York Post, and elsewhere. His academic publications have appeared in the Journal of Economic Behavior and Organization, the Fletcher Security Review, and Public Choice.

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