Are Venezuela's dismal finances the result of Maduro's mismanagement, the US sanction, or both? [duplicate]

Question

Is the dismal financial situation of Venezuela because of Maduro's mismanagement or the US sanction or both?

Answer 1

Chavez and Maduro's incompetence because the sanctions were only put in place after things got bad (one could argue that before fracking-led energy independence the US was more willing to turn a blind eye on bad behaviors within an oil producing country).

2014 - first protests that trigger sanctions.

due to the country's high levels of urban violence, inflation, and chronic shortages of basic goods[11][12] attributed to economic policies such as strict price controls.

When the sanctions got put in place - 2014 and up.

During the crisis in Venezuela, governments of the United States, the European Union, Canada, Mexico, Panama and Switzerland applied individual sanctions against people associated with the administration of Nicolás Maduro. The sanctions were in response to repression during the 2014 Venezuelan protests and the 2017 Venezuelan protests, and activities during the 2017 Venezuelan Constituent Assembly election and the 2018 Venezuelan presidential election. Sanctions were placed on current and former government officials, including members of the Supreme Tribunal of Justice (TSJ) and the 2017 Constituent National Assembly (ANC), members of the military and security forces, and private individuals accused of being involved in human rights abuses, corruption, degradation in the rule of law and repression of democracy.

Basically

• Chavez started replacing the managers of the Venezuelan state oil company with his cronies.

• Subsidies to the poor were increased and price controls were put in place. At the time, oil went up to $80-100 a barrel. To be very, very, clear: $80/barrel was historically an oddity, the usual prices tended to be more in the $50-60 range and anyone forecasting budgets based on $80+ was playing with fire.

• Domestic production of non-oil products started going down, as producers were sometimes told to sell below cost. Venezuela became increasingly dependent on oil, in a Communism-themed version of Dutch disease.

• The Venezuelan economy and budget were showing signs of strain (slowing oil production, budget deficits).

• Then oil prices cratered to $40/barrel and things went to hell.

Certainly, US sanctions have worsened the crisis. But they did not cause it and Venezuela showed signs of problem way before then were imposed.

From History of the Venezuelan oil industry

Chávez began setting goals of reinstating quotas, such as ten percent of PDVSA's annual investment budget was to be spent on social programs.[39] He also changed tax policies and the oil revenue collection process.[13] Chavez initiated many of these major changes to exert more control over PDVSA and efficiently deal with the problems he and his supporters had over PDVSA's small revenue contributions to the government. By 2002, warnings grew of the Chávez overspending on social programs in order to maintain populist support.[dubious – discuss][40]

In December 2002, PDVSA officially went on strike creating a near-complete halt on oil production in Venezuela. The aim of the Venezuelan general strike of 2002-2003 was to pressure Chávez into resigning and calling early elections. The strike lasted approximately two and a half months, and the government ended up firing 12,000 PDVSA employees and replacing them with workers loyal to the Chávez government, many of whom came out of retirement to replace the fired.[41] By January 2002, protests involving hundreds of thousands of Venezuelans opposing Chávez became common in Venezuela.[dubious – discuss][37] In April 2002, mass demonstrations occurred in Caracas and Chávez was temporarily overthrown by the military, backed by U.S. interests, during the 2002 Venezuelan coup d'état attempt.