Scarcity and Inflation Will Worsen, Fueling the Opposition
Hugo Chávez was undoubtedly a smart and charismatic man, but he was also an extremely lucky man. During his 14-year rule over Venezuela, the price of oil increased by a factor of six, from less than US$15 per barrel in 1998 to over $100 per barrel in 2013.
The fact that — despite evident and proven electoral cheating, including padded electoral rolls, widespread voter intimidation, and total control over the electoral authorities — Chávez never obtained more than 54 percent of the official vote count belies this myth.
Chávez had the biggest revenue windfall in the history of the Americas. He increased government expenditures by a factor of eight in 10 years, and yet he had to cheat and cajole his way to electoral victory. That fact should be proof enough that, while it is undeniable that a sizable portion of Venezuelan society supported Chávez, his popularity and that of his movement were never as large or as dominant as his supporters have managed to sell internationally.
The opposition, even at the height of Chávez’s popularity could muster nearly 50 percent of the votes in honest elections, and they probably won the elections held in the later years of Chávez’s life. This is a key fact to be considered when analyzing the scenarios for the future of Venezuela.
Hugo Chávez died having completely depleted the coffers of the Venezuelan treasury. In a last gasp effort to sustain his popularity despite rampant inflation, corruption, and mismanagement, Chávez wasted the country’s last reserves in a populist orgy of expenditures such as the world has never seen. For instance, in a country of 30 million residents, 2 million households received free refrigerators from the government, while hundreds of thousands received other free electrical appliances prior to the October 2012 elections.
By the time Nicolás Maduro, Chávez’s chosen successor, was declared the winner in the most fraudulent elections held in Latin America in decades, Venezuela was almost bankrupt.
Corruption and mismanagement, coupled with 15 years of nationalizations and expropriations of the countries most productive enterprises had almost completely destroyed the country’s productive capacity — while the enormous costs of subsidizing Cuba and its satellite states in Bolivia and Nicaragua further aggravated the situation.
Facing this situation, Maduro has decided to paint himself into a corner. Turning always to his Cuban advisers, his government has embarked on a process that can be called the “Sovietization” of Venezuelan society.
During the past 12 months, laws have been passed that make it impossible for landlords to evict tenants from any rental property. The government has mandated price reductions in rental agreements for commercial property of up to 80 percent and has placed caps on how much mall owners can charge for their property. All prices for all goods have been frozen, and the penalties for breaking the controls established by the law of “Fair Prices” can amount to a dozen years in prison. Most private companies have been denied access to foreign exchange since last November, while food and pharmaceutical companies must obtain government approval for the distribution routes of their truck fleets. Firing any worker for any reason is prohibited, and starting this month the government will set not only prices but also profit margins for all companies nationwide, large and small.
These Soviet and Cuban style decrees have been enacted in a country with the worst crime statistics in the hemisphere and rapidly falling real incomes, with the world’s highest inflation rate.
Maduro claims to have won 51 percent of the votes in the elections held last April. No one in Venezuela, not even the Chavistas, believe that to be true. However even if it were, it is unfathomable that Maduro, a year after the Venezuelan economy has entered into a free fall due to his own policies, could garner the support of a majority of Venezuelans.
Some media outlets, like the New York Times, have for over a decade repeated the official line stating that the opposition is composed of a “sea of white faces,” a minority from the upper and middle classes. That line is being applied today to the protesters on the streets. This official line ignores the fact that, even if one were to accept the official election results, the opposition could not possibly reach the number of votes the regime says it has received without the support of a significant proportion of poor Venezuelans. It is simple statistics. If the government claims the opposition received 49 percent of the vote, then it is evident that to reach that number poor Venezuelans numbering millions must have voted for the opposition.
Now, a year after the last elections, with the country in shambles and private property almost completely abolished, the Venezuelan communists and their fellow travelers in the international media want us to believe that the protesters do not have the support of a great majority of Venezuelans.
The reality is that poor Venezuelans have already taken to the streets nationwide. The protests in cities like Valencia, Maracay, Puerto Ordaz, and Maturin have been enormous, and it is impossible to claim in those cities that the protesters are middle class.
The slums of Caracas have yet to rise up. The reason is simple: Hugo Chávez knew and Maduro now knows that if the slums of Caracas take to the streets, the regime will fall. Thus, for over a decade now, elaborate strategies have been put in place to avoid that situation.
Armed civilian militia — thugs called “colectivos” — roam the barrios ready to kill any opposition organizer who is brave enough to show himself out in the open. Any opposition event in the western part of Caracas, where the poor are concentrated, is forbidden and will be violently suppressed. No demonstrations or marches by anyone, other than the government party, are allowed west of the geographic center of the city, Plaza Venezuela.
Eventually, however, all these efforts will fail. The recent, soviet-style controls established over the economy are already producing the traditional dislocations these actions always produce. The shortages of basic goods will get much worse. Already a number of private hospitals, for example, have announced they are suspending elective surgeries as they do not have supplies to carry out procedures such as cardiovascular surgeries. Soon, within weeks, these shortages will get worse, as the economic czar named by Maduro, his vice president and Chávez’s son in-law, Jorge Arreaza, is completely clueless as to the real workings of markets.
It is only a question of time before Venezuela becomes even more of an economic basket case. The slums of Caracas will rise up, as those of the other cities already have. The only question is if the Cuban-engineered repression that will ensue will be enough to contain the wave of anger that will sweep Venezuela. I think not. We do not know what type of government Venezuela will have in a year’s time, but one thing is for sure: Nicolas Maduro will not be the president of Venezuela.
No comments:
Post a Comment