VICE

This week on Vice:

the rise of a dictator in Venezuela.

- That's a member of parliament? - Yeah.

There is no fear anymore. This is a citizens' revolution.

And you can feel it on the streets.

Today the instructions are for all the protesters

to stay in separate groups across the city,

to make it harder for the National Guard to break them up.

Go, go, go!

We are not animals!

In recent weeks, the crisis in Venezuela

has frequently been in the news.

This resource-rich nation,

with the largest proven oil reserves on Earth,

is on the verge of total collapse.

Hyperinflation, widespread food shortages,

and one of the highest murder rates in the world,

has fueled almost continuous daily protests across the country.

Much of the anger is directed at President Nicolás Maduro

and his ruling socialist party.

Critics say Maduro's authoritarian regime

is guilty of large-scale corruption

and involvement in narcotrafficking.

Earlier this year,

President Maduro announced his intention

to rewrite the nation's constitution,

in what is widely seen

as an attempt to consolidate power.

With tensions escalating, Vice sent both Suroosh Alvi

and Ben Anderson to Caracas to cover the crisis.

So, in Caracas now, they're protesting

four out of the seven days of the week.

There is no fear anymore. This is a citizens' revolution.

And you can feel it out in the streets.

People aren't afraid. They're ready to fight.

Since the anti-government uprisings

exploded this past spring,

Venezuelans have been demonstrating in the streets

for over a hundred days.

More than 100 have been killed and thousands more injured.

And the more the protesters defy the authorities,

the more aggressive the police get trying to break them.

I don't know what's happening. I don't know what's happening.

Wait, wait, wait!

Venezuela is on the brink of becoming a failed state.

The economy has been destroyed by hyperinflation.

In the last 12 months alone,

the inflation rate rose over 1,000 percent.

And it's projected by the IMF to rise more than 2,000 percent

in 2018.

As Venezuela's currency

has cratered in value,

the cost of importing the most basic goods has soared,

making food and other essentials

both scarce and unaffordable.

Ordinary people are really suffering.

Um, and they're fighting back...

Veteran journalist Phil Gunson,

who's been covering the

has witnessed firsthand the events

that have brought Venezuela to the brink.

What caused the current situation

with chaos reigning in the streets?

Now that the economy has collapsed,

the issue on the streets is not an issue of ideology.

It's not people out on the streets saying,

"We want capitalism instead of socialism."

It's people out on the streets saying, "We want to eat."

This food shortage is widespread.

Over the last year,

three-quarters of the population

has lost an average of almost 20 pounds.

People are genuinely...

dying of hunger, in some cases.

Twelve percent of children

are suffering from acute malnutrition in Venezuela.

This is the country with the biggest oil reserves in the world.

It's absolutely unforgivable.

Oil is the foundation

of the Venezuelan economy,

accounting for half the government's revenue.

So, the nation's economy, and fortunes,

rise and fall with the price of crude oil

on international markets.

Venezuela is well over 90 percent dependent

on oil income for its foreign earnings.

The society has come to rely

on this economic cycle of boom and bust

that's inherent in oil.

And it's created a society in which, um,

there's very little planning for the future,

corruption is kind of...

at least to a large extent, tolerated.

By the late 1970s,

oil had made Venezuela the richest country in South America.

But over the coming decades, persistent corruption

funneled the nation's wealth into the hands of the elite.

The result was profound income inequality

that set the stage for a socialist revolution

led by Hugo Chávez.

Chavez was a larger-than-life figure,

messianic, a figure who was loved,

not just as a politician, but revered as a saint

by millions of people in Venezuela.

Chavez made government a spectacle.

Every Sunday, he staged marathon TV broadcasts

that sometimes ran up to eight hours,

on his show, Aló Presidente.

On top of announcing government business,

such as nationalizing agriculture

and telecom industries,

the show featured special guests,

dance numbers, and prize giveaways.

But while he was giving away appliances,

the economy, and specifically

the oil industry, was crumbling.

The problem is that, the economic underpinnings of what he was about,

um, were not really viable.

The legacy of Chavez's disastrous economic strategy

is the heart of today's crisis.

We flew to Lake Maracaibo,

epicenter of the country's boom-and-bust economy.

This is one of the largest oil basins in the world.

Over 30 billion barrels of oil

have been pulled out of this lake

and the estimates range that there are still

somewhere between 19 and another 40 billion barrels of oil

still left down there.

Ulises Albornoz worked for the state-run oil company,

Petroleum of Venezuela, or PDVSA,

and experienced the effect of Chavez's policies firsthand.

One of Chavez's first moves to change the oil industry

was replacing the PDVSA board of directors

with political allies.

Much of the PDVSA workforce was outraged

and took to the streets.

In response, Chavez fired seven

of the company's top executives live on TV.

In the end, Chavez fired 18,000 PDVSA employees

and replaced them with more politically loyal workers

who knew next to nothing about oil production.

So, basically, Chavez fired half of the...

almost half of the 40,000 employees

of the state oil company.

18,000 people. And you were one of them?

Yeah.

Got it.

In addition to the incompetence

of the Chavez loyalists who run PDVSA,

corruption has been a major factor

in the decline of the oil industry.

Billions have been stolen in recent years,

creating a new and very rich socialist elite.

With oil production at all-time lows,

Venezuela's economy is now much more vulnerable

to the ups and downs of the global market.

Venezuela is acutely vulnerable

to a fall in the price of oil,

which, as we know, tends to be cyclical,

and it tends to be severe when it happens.

And essentially,

what Venezuela's living on now

is less than half of the oil price

that it had a few years back.

The oil money ran out more or less at the same time as Chavez died.

So, simultaneously, they lost a large amount of income,