The Telegraph — May 14, 2016: Oil-rich Venezuela has been rocked by two months of deadly protests, with at least 41 people killed since a wave of demonstrations against the leftist government of Nicolas Maduro broke out in early February. Hundreds of Venezuelans marched in Caracas for the ‘resurrection of democracy’ in a new day of protests against the government of Nicolas Maduro.
‘We want food!’: Venezuela crisis deepens
Opposition supporters clash with riot policemen during a rally to demand a referendum to remove President Nicolas Maduro in Caracas, Venezuela, on May 18, 2016.
Venezuelans in the US say their country is worse than 1960s Cuba
Globalpost — May 17th, 2016
“There’s no food, there’s no toothpaste, there’s no Pampers [in Venezuela],” Eduardo says. “It’s Cuba, 100 percent.”
These are some of the reports coming out of Venezuela in recent weeks. The amazing thing is that in the 1970’s Venezuela was the richest country in Latin America. However here we are in 2016 and protests are erupting throughout the country as the power crisis deepens and queues for food items get longer. Looting and violence is occurring throughout Venezuela as the government is forced to ration food and electricity. Crime figures are getting worse, a trend since 1998, but totally out of control in 2016.
Venezuela’s recent problems go back to 2014, when oil prices first began to plummet and the economy tanked. Oil exports are virtually Venezuela’s only revenue comprising of 95% of all export earnings and representing more than 50% of the country’s GDP. Today Venezuela is submerged in billions of dollars in debt with no relief in sight.
This crisis was long in the making. It really boils down to a concept in economics known as the Dutch Disease which is the relationship between the development of a specific sector — in most cases natural resources — and the decline in other sectors such as manufacturing and agriculture. Venezuela’s dependence on oil exports at the expense of other industries has caused poverty and inflation to increase, which in turn triggered shortages in food, malnutrition, increase in crime and corruption. As the price of oil plummeted these conditions became exacerbated to the point where today the economy is at the brink of collapse.
Another problem Venezuela has faced since its independence from Spain in the first half of the 1800’s has been the overabundance of Caudillos that have ruled the country.
In colonial Latin America a caudillo was a military-landowner that possessed political power and exercised it in a form considered authoritarian. A good English translation would be supreme leader, chief, dictator, strongman or perhaps even warlord. In modern times the word continues to be used in Hispanic America to refer to a charismatic populist leader that runs his country with an iron fist. Modern day examples of caudillos would be Pinochet of Chile, Juan Peron of Argentina, Francisco Franco of Spain, Fidel Castro of Cuba, and in Venezuela Hugo Chavez.
In the case of Venezuela caudillos dominated politics throughout the 19th century well into the mid-20th century. Since 1958 the country has had a series of democratically elected governments plagued by corruption, scandal and economic shocks. Eventually the political and economic crisis of the 1980s and 1990s led to the deadly Caracazo riots of 1989. In 1992 two attempted coups, followed by the impeachment of President Carlos Andrés Pérez for embezzlement of public funds created the political environment that shepherd Hugo Chavez to power.
One of the attempted coup d’etat of 1992 was led by Hugo Chavez who at the time was a career military person that had risen to the rank of lieutenant coronel. Chavez was imprisoned for two years after which he founded a political party known as the Fifth Republic Movement, and was elected president of Venezuela in 1998. He remained president of Venezuela until 2013 when he died of cancer.
Chavez rose to power by riding a wave of voter outrage and discontent at the traditional political elites responsible for corruption, economic failures and the plundering of the national treasury.
As the new head of Venezuela he described his presidency as a Bolivarian revolution, a type of socialist movement aimed at bringing equality through the nationalization of key industries, the creation of participatory democratic Communal Councils, and implementation of social programs known as the Bolivarian Missions to expand access to food , housing, healthcare, and education.
High oil prices aided Chavez to improve quality of life as it related to poverty, literacy, and income equality from 2003 to 2007. However mismanagement of the economy through overspending and price controls coupled by corruption proved destructive causing economic failure with poverty, shortages, and inflation to increase.
A great deal of the blame for Chavez’s economic failure can be attributed to the same corruption he came to power to eliminate. Corruption has become pervasive throughout Venezuela and government officials as well as high ranking members of the military are allowed to pilfer oil profits and the national treasury with impunity.
Further destruction of the economy came in 2010 when Chavez declared an “economic war” on all business sectors. The Bolivarian Government focused on expropriations, confiscations, and control of several private food companies as well as other business associations. In a speech he delivered in June of 2010 he stated: “I declare an economic war. Let’s see who is more powerful; you the shoddy bourgeois or those who love their homeland. They know where we are headed; we are going to take from the Venezuela bourgeoisie,”
During his presidency Chavez’s propensity for financing socialist regimes throughout Latin America and in Spain put unnecessary strain on his country’s oil profits. During the time he was president he provided aid to Cuba to the tune of $6 billion annually. He also donated more than $10 million to the socialist Podemos movement in Spain. In 2007 Chavez agreed to finance the production of 4,000 tons of coca in Bolivia. He financed a refinery for Nicaragua, he provided cut-rate fuel for Ecuador and continued bond purchases from Argentina. All of these are examples of the type of fiscal irresponsibility that has contributed to Venezuela’s near economic collapse today.
After Chavez’s death in 2013 Vice President Nicolas Maduro became president. Originally a bus driver, Maduro rose to power as a trade union leader, later elected to the National Assembly and eventually named Foreign Minister before becoming Vice President.
Having never graduated from high school Maduro has not proven to be an intelligent or effective leader. As a confirmed Marxist, Stalinist, Communist, Maduro has continued with Chavez’s attack on Venezuela’s business class enforcing unrealistic price controls, and creating a government controlled food distribution system that bypasses retail outlets.
Consequently now, Venezuela stands at the brink of political and economic collapse. A referendum signed by 1.8 million citizens has been put forward by the opposition to recall Maduro. In the meantime riot police continue to face anti-government demonstrators all throughout Caracas.
Let’s hope that any eventual transition in government is peaceful and that Venezuela can avoid another coup d’etat. Considering how the situation in Venezuela continues to spiral out of control, this could be wishful thinking.