Humanitarian Aid

How the Earthquakes Reshape Venezuela’s Economic Future

Originally published in Spanish on Asdrúbal’s personal Substack

There are weeks that change a government. And there are weeks that change a country. This is one of them.

Until just a few days ago, the economic debate regarding Venezuela revolved around how much we would grow this year. Around whether the figure would be 4% or 6%, and at what point that growth would materialize in people’s daily lives: exchange rate stabilization, the reestablishment of relations with multilateral organizations, and the possibility of slowly beginning a recovery process.

On the morning of June 24th, a Financial Times scoop centered the discussion on the actual size of our foreign debt. That was the horizon. Today, the horizon no longer looks like that. The earthquakes that struck this week not only leave a human tragedy of dimensions still difficult to quantify; they also profoundly alter the country’s economic outlook. International evidence shows that a major earthquake can generate losses equivalent to between 3% and 10% of GDP, depending not only on physical damage but on the State’s capacity to respond.

Anyone who thinks the problem is limited to the cost of rebuilding highways, hospitals, or housing is seeing only a part of the picture. Earthquakes destroy infrastructure, but they also destroy productivity, employment, tax revenues, logistical chains, and confidence. Thousands of businesses interrupt operations, families postpone consumption and investment decisions, and economic activity loses momentum for months or even years. The expectations and decisions of economic agents are disrupted by a widespread sense of loss and uncertainty.

The economic literature is quite consistent on this point. Studies by the World Bank, the IMF, and numerous academic papers conclude that the impact of a natural disaster depends far less on the intensity of the phenomenon itself than on the institutional strength of the affected nation. Economies with solid States tend to absorb the initial shock and recover relatively quickly. Conversely, in fragile States, a natural disaster often mutates into a prolonged economic crisis because institutional weakness amplifies the damage and delays reconstruction.

The economic agenda will no longer be dominated exclusively by growth, but by reconstruction. We need to prevent the disaster from destroying a large part of Venezuela’s remaining physical and human capital.

That is precisely Venezuela’s primary challenge. Over the years, the country lost fiscal, technical, and operational capacity. This is not a political assessment, but an observable fact. The State’s capacity to design public policy has been significantly reduced. The prolonged economic crisis and hyperinflation led us to a state of “save yourself if you can.”

The difficulties in maintaining basic infrastructure, public utilities, or the hospital network were already evident before the earthquake. Rebuilding cities like La Guaira demands far more than financial resources: it requires planning, engineering, contracting capacity, technical supervision, and a public administration capable of coordinating thousands of projects simultaneously. Today, the Venezuelan State lacks a good portion of those capabilities.

Our recent history shows how society has demonstrated resilience where the State has lost capacity. The private sector, non-governmental organizations, churches, universities, and multiple civil society initiatives have, through years of crisis, developed a remarkable ability to organize, mobilize resources, and respond swiftly to emergencies. We saw it during the pandemic, during the landslides in Las Tejerías, and in so many other humanitarian crises. And we are seeing it now. This accumulated experience will be one of the most critical assets in confronting this tragedy, though on its own, it remains insufficient to undertake a reconstruction of this magnitude.

It would be a mistake to turn international aid into a battleground for confrontation. Venezuela doesn’t need speeches on sovereignty, but engineers, heavy machinery, hospitals, drinking water, electricity, and the capacity to rebuild.

That is why I maintain that this earthquake completely changes the economic conversation. Just a few weeks ago, we were discussing how to accelerate growth, attract investment, or deepen reforms. We argued that institutional reform was necessary for Venezuela to achieve sustained and inclusive growth. Today, the priority has shifted to preventing the disaster from destroying a large part of the country’s remaining physical and human capital. The economic agenda will no longer be dominated exclusively by growth, but by reconstruction.

An inevitable conclusion emerges from this: Venezuela cannot face this challenge alone. This is not merely a matter of securing financing. It will be indispensable to mobilize technical assistance, specialized teams, field hospitals, temporary infrastructure, fast-access credit, and international coordination mechanisms. International cooperation will cease to be a mere complement and will become a necessary condition for recovery.

There’s some good news, however: for the first time in many years, the conditions exist for such cooperation to be possible. The reestablishment of relations with international financial institutions opens a window that until a few months ago seemed firmly shut. It would be a mistake to turn this aid into a new battleground for political confrontation. Countries do not need speeches on sovereignty after an earthquake. They need engineers, heavy machinery, hospitals, drinking water, electricity, and the capacity to rebuild.

The country needs to design a roadmap to achieve broad political agreements, leading to a democratically elected government able to drive the necessary reforms.

Economic history demonstrates that major disasters can become turning points. Some countries seized these tragedies to modernize their infrastructure, strengthen their institutions, and build more resilient economies. Others remained trapped for decades in a cycle of destruction and precariousness. The difference was never solely the magnitude of the earthquake, but the quality of the collective response.

Beyond the immediate emergency, this tragedy also leaves a political lesson that is impossible to ignore. The reconstruction of Venezuela demands more than financial resources or international assistance. It requires leadership with democratic legitimacy and the capacity to build consensus. The country needs to design a roadmap to achieve broad political agreements, leading to a democratically elected government and providing it with the necessary backing to drive the economic and institutional reforms that recovery demands. No reconstruction program will be sustainable unless it rests upon legitimate institutions, clear rules, and a political pact that offers stability, generates trust, and allows for the mobilization of support from the international community and private investment.

That is why I believe this earthquake has not only moved the earth. It shifted Venezuela’s economic horizon. The projections we made just a week ago likely no longer describe the country we will have at the close of this year. The Venezuelan economy has just entered a new phase, and the speed with which we manage to combine the efforts of the State, the proven capacity of the private sector and civil society, and the decisive support of the international community will determine not only the economic performance of 2026, but the real possibilities for recovery over the next decade.

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A Shaken Country and an Exposed State

Venezuela woke up this morning to scenes of destruction and grief that not even three decades of political and economic collapse could have prepared us for. On June 24, two of the strongest earthquakes ever recorded in Venezuelan history struck the country’s northern coastline.

At the time of writing, over 39,000 people have been reported missing, and the interim government of Delcy Rodríguez has confirmed at least 164 deaths. Yet images of flattened residential buildings across Caracas and La Guaira suggest that this number will continue to rise in the days ahead.

The aftermath is even more devastating when one considers how profoundly unprepared Venezuela is to respond to a disaster of this magnitude. Natural disasters are catastrophic by definition, posing immense challenges even for wealthy countries with competent institutions. For the battered nation that is post-Maduro Venezuela, responding to a crisis of this scale may prove overwhelming.

Venezuela has faced what the United Nations defines as a complex humanitarian emergency, a prolonged and multidimensional collapse of the state’s ability to perform its core functions. This has been the status since at least 2016. Few sectors have suffered more than healthcare. Years of mismanagement, systemic corruption, and chronic underinvestment have devastated the country’s health system, compounding the deterioration of the electrical grid and other essential public services.

Since at least 2022, the Venezuelan state has increasingly adopted a hands-off approach to governance. This shift, shaped by a post-socialist form of laissez-faire economic policy, reduced state control over large parts of the economy and contributed to a modest but visible revival in business activity. In many ways, the tate appeared to retreat from major areas of public administration while preserving absolute control over others, particularly the security apparatus and the machinery of censorship and political repression.

The corruption and mismanagement that destroyed Venezuela’s health system, combined with the dangerous belief that the state could simply step aside, help explain why the country now lacks even minimally functional search-and-rescue capacity.

These dynamics, though somewhat altered, have largely persisted after January 3. Following Operation Absolute Resolve, which culminated in the arrest of Nicolás Maduro, the interim administration of Delcy Rodríguez (with the backing of the United States) introduced reforms aimed at attracting American investment in the oil and mining sectors, fueling cautious optimism about eventual economic recovery.

From a public health perspective, however, the economic liberalization first embraced under Maduro and now continued by Rodríguez marks the culmination of a much longer process: the gradual withdrawal of the state from its responsibility to protect the health and welfare of Venezuelans.

The liberalization of recent years also triggered a rapid expansion of private health insurance. For those able to afford plans, often costing thousands of dollars, private coverage has offered an attractive alternative to Venezuela’s chronically underfunded and dysfunctional public hospitals. This produced a deeply unequal arrangement: those with resources could secure healthcare privately, while most Venezuelans remained dependent on a system that had largely ceased to function.

But this model can only take a country so far.

The private sector (particularly one as small and fragile as Venezuela’s) cannot replace the functions of a public health system. Private clinics in Caracas, however modern, cannot conduct nationwide vaccination campaigns, build epidemiological surveillance networks, or address child malnutrition at scale.

Nor can private healthcare alone care for the thousands of victims created by disasters such as these earthquakes. It cannot train sufficient first responders, coordinate nationwide rescue efforts, or provide the ambulances, heavy equipment, and emergency infrastructure required in the immediate aftermath of a catastrophe.

This may become the clearest test yet of how committed the Trump administration truly is to supporting Venezuelans, not merely safeguarding its economic interests in the country.

The corruption and mismanagement that destroyed Venezuela’s health system, combined with the dangerous belief that the state could simply step aside, help explain why the country now lacks even minimally functional search-and-rescue capacity. They also explain its overwhelming dependence on foreign aid.

For that reason, many Venezuelans are watching statements from Marco Rubio as closely as those from Rodríguez. All signs suggest that meaningful large-scale assistance will need to come from Washington rather than Miraflores. Rubio has already promised a “big, fast, and effective whole-of-government response,” offering a measure of hope to an exhausted and grieving population.

This disaster may become the clearest test yet of how committed the Trump administration truly is to supporting Venezuelans, not merely safeguarding its economic interests in the country. Recovery without explicit and substantial American support appears highly unlikely.

Other countries across the globe and the ideological spectrum—including Mexico, El Salvador, Cuba, Iran, France, Germany, Italy, and Spain—have also offered assistance. All such support is welcome. In these first critical hours, every resource matters if lives are to be saved.

The images circulating on social media, people trapped beneath rubble in La Guaira, surrounded by exhausted neighbors refusing to abandon them, or volunteers searching debris with only the flashlights of their mobile phones, amount to a testimony of the solidarity of the Venezuelan people and an urgent plea for help, one that both Venezuelan authorities and the international community must answer.

They also serve as a painful reminder that public health and disaster preparedness are responsibilities that governments simply cannot outsource.

If you want to know more about ways to help, or need information on missing people, please visit the following link.

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