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Following the EU’s call to help Venezuelan refugees, the use of blockchain technology could ensure transparency

May 18, 2020

Venezuela is a South American country that has been considered the richest in the region due to having the largest proven oil reserves in the world and reserves of valuable materials.

With the socialist government that Hugo Chávez founded and that Nicolás Maduro continues, the country’s production apparatus has deteriorated to such an extent that the country’s production activity almost no longer exists. Venezuela has been a reindeer country for decades, which means that it depends 90% of its budget on oil exports. It is no secret to anyone that production quantities can hardly be announced. Information censorship is an obstacle to obtaining reliable data. However, it is known that around 10 years ago 3.5 million barrels were produced per day. Today it is estimated that not a million are produced in the whole country.

The decline of the oil industry led to a lack of state liquidity. This led to an indiscriminate appropriation of private companies that also stopped working over time. Corruption from the organizational bases to the president himself caused the destruction of the gross domestic product and thus the country’s per capita index. Unemployment, crime and bottlenecks have been triggered in all areas of the production and consumption chain.

Following the EU’s call to help Venezuelan refugees, the use of blockchain technology could ensure transparency
Following the EU’s call to help Venezuelan refugees, the use of blockchain technology could ensure transparency

As a result, Venezuelans began their migration careers; At the beginning of 2002 there were only a few migrants who went unnoticed. As of 2012, the migration flow was larger, but was controlled if you want. For more than five years, the migratory flow has been larger and hundreds of thousands of Venezuelans are literally fleeing the economic and humanitarian crisis that is afflicting this country. In this context, it is already estimated that Venezuelan migrants reach more than 5 million people. They have spread throughout the South American region, and this obviously has economic and social impacts mainly in the Latin American countries.

In this context, Josep Borrel, a representative of the European Union for foreign policy, announced that the EU and Spain would jointly organize a donor conference for the refugees from Venezuela.

“The conference will support neighboring countries that receive unprecedented numbers of refugees, around 5.5 million people. The crisis has been exacerbated by the international situation, so this appointment is very punctual, ”said Borrel when announcing the call at a press conference.

This announcement is sponsored by the pandemic that is plaguing the world, as it is known that Venezuela has no medication, the information it provides is not true, and therefore this initiative to help migrants in this crisis is emerging.

Blockchain in response to this challenge

This initiative is not the first to be launched to help the cause of Venezuelan migrants. Therefore, certain aspects need to be taken into account in order to implement them, in particular government corruption, which is in power in managing resources.

Blockchain technology can solve this problem. The immutability of the blockchain and the transparency in the blockchain are crucial to ensure the proper management of the funds raised. In February 2019, an event was privately organized that benefited Venezuelan migrants. It brought together more than 32 artists and raised about $ 2.4 million. Much speculation has been made about those who do not yet know how they have been distributed. Others even say that the money raised was not enough to pay for operating costs when the money collected was wasted.

What is certain is that on this occasion there was talk of billions of dollars of humanitarian aid that would reach the borders of Venezuela, and today, more than a year after the event, it is still unknown who managed the funds, supplies and resources of others Elements of humanitarian aid.

The implementation of a blockchain network enables transparent, efficient and fast money management. Venezuela’s economic axis is based on a dollar market that is far from the official government change. The data shows that Venezuela has a high volume of Bitcoin transactions, and in a way, the price of Bitcoin is one of the benchmarks for transactions in the Caribbean country.

The ability to have a distributed data network enables efficient and transparent management. This is fundamental as other nonprofits have implemented blockchain networks to use transparency in their favor and promote donations, as participants always know where the donated money is, where it was spent, or invested.

Blockchain technology tends to democratize the use of information and resources. The ability to have data and money in a distributed network prevents manipulation of corrupt people and thus embezzlement.

Creating or using a blockchain network for these types of projects to ensure that resources are well protected to their final destination and to prevent government fraud is one of the pillars on which this new humanitarian aid should be built.

Because of its technology, each block of information is immutable when a block is added to the network with the information that remains intact in the distributed network replicas.

When the help to be managed is delivery, platforms such as IBM enable real-time traceability of products to ensure that they are delivered without tampering or inappropriate political intervention.

This European Union initiative was launched in October 2019 at a conference in Brussels to discuss the humanitarian crisis in Venezuela and Syria. Nowadays, applications of blockchain technology are widespread, from voting systems to health systems.

The acceptance and implementation of this technology is increasing in all parts of the world. It is no longer the technology used to create digital currencies.It is one of the most important technological advances of this century.

Using blockchain technology on this occasion could guarantee the European Union full transparency of resources and prevent it from happening again, the loss of billions of dollars donated without control or surveillance.