It is the year 1994; Venezuela is in the midst of a major financial crisis brought on by lax financial regulations. Venezuelans across the country prayed for an angel to bless them from the depths of purgatory. With inflation spiraling out of control, more than 70,000 businesses went bankrupt.
Their prayers seemed to have been answered, when Hugo Chavez swept into power in 1998. Minimum wage was more than doubled and the poor basked in the glory of their savior.
It is the year 1921, the British Empire stretched to a quarter of Earth’s total land mass (37 million square kilometres), encompassing 570 million people. It was called the empire on which the sun never sets. London was the centre of the world, and millions from across the globe flocked to Britain to bask in the shimmer of wealth.
These might seem like completely different stories, but its folklore has resulted in problems that are occurring today. People are drawn to the idea of past glory, and tend to make irrational decisions in an attempt to recapture it.
In present day, Venezuela is a country that is being ripped apart by a shortage of goods. The result has been hyperinflation, with the prices of food, medicine, and other products increasing by over 800%.
Yet the ruling party, United Socialist Party, still clings on to power. The legacy of Hugo Chavez is still held in the hearts of millions of impoverished Venezuelans. There is still hope that the government can swoop in and rescue them. The imperialist Americans will never beat them! In reality, policies enacted by Hugo Chavez and his successor Nicolas Maduro have contributed to the chart that we see below.
Immediately after taking power, the Chavez government increased social service spending in an admirable attempt to aid the poor. Social spending became an increasing portion of government spending, reaching 40% in 2012. To finance these social policies, the government relied heavily on its oil revenues. Doing so was feasible when oil prices were high, but now with oil prices falling below $50 a barrel, the economy is faltering. If we look at the GDP per year adjusted for inflation on the chart above, we see that GDP has shrunk with the fall in oil prices. The problem is that 95% of Venezuela’s exports are oil. The government has failed to diversify its economy, to build on manufacturing, services or the tourism industry. The less privileged people jubilated at the social policies that were enacted by the United Socialist Party. It was a dream-come true for millions across Venezuela. However it’s now time to wake up and realize that the mismanagement of the economy by the government has resulted in the economy tumbling hand in hand with oil prices. Social programs are next in line to bear the brunt. One social program providing housing and financial services to mothers with children under the age of 18 has had its budget cut by 50%. The backbone supporting the government have been the poor who were reliant on social services. As the situation unfortunately deteriorates, they will realize that the glory days of the early 2000s aren’t coming back. There isn’t any purpose to holding onto hope and supporting a government that simply cannot manage the economy.
In Britain, 61% of seniors over the age of 65 voted to leave the European Union. The primary arguments that were given was the cost of supporting the EU and migration. Many seniors looked to break away from the EU and from the rules and regulations. They wanted to revert back to a time when Britain was a global powerhouse. Looking at the chart below, it’s clear that the elderly voted disproportionally to leave the European Union. Never mind the 3.1 million jobs linked to the EU created for Britain, the freedom to travel and work in any EU country or the coordination on tackling terrorism. As long as Britain was free from the shackles of the EU, it would be worth it right? An irrational decision was made to leave the EU, and it was all done in the name of recapturing the former glory of an empire that can never be restored.
As we look to the future, Venezuela’s economy is projected to shrink by at least 12% by the IMF. Britain is expected to pay 73 billion euros as part of Brexit. While the repercussions of nostalgic nationalism are being felt today, the true nightmare is being lived through by the youths who suffer from the long term impact of the decisions.
66 protesters have died at the hands of the Venezuelan government, the majority of whom are under the age of 21. Youths in Britain will have to deal with the difficulties of applying for universities and finding employment opportunities in Europe. Those who seek to bring back the past, may find the result of their quest to be startling. The future that they have carved may create a sense of nostalgia for what we have today.
Kevin Zhao is a fourth year student in Rotman Commerce at the University of Toronto.