“Viva Venezuela!” was the slogan Hugo Chávez used when he won the 2012 presidential election.Six years later, Venezuela found itself suffering heavily from poverty, unemployment, hunger, violence, crime, desperation and an exodus of people escaping to other countries. Currently 5 million of Venezuela’s 32 million strong population have fled abroad with the flow of people to the neighboring Colombia continuing nonstop (The Economist, September 2018).
The economy of Venezuela has shrunk in half since 2014, which marked the worst economic decline among countries who are not affected by war. Ninety per cent of their exports are crude oil, but the external government debt has exceeded its exports fivefold. Their President of the National Assembly, who has now become the opposition, stated that hyperinflation started in 2017 and prices increased 1.2 million per cent within a year. Their government even stopped producing reports of currency depreciation.
As people have weaker purchasing power, the overall consumption level has fallen significantly, which led the private sector to cut its goods and services production. As a result, a lot of businesses went bankrupt. When it became cheaper to import the products that were used to be made in country before he become the president, Hugo Chávez stopped the domestic production altogether, creating a shortage of goods. Hospitals are left without medicine while people have been going hungry because the limited options for food items they can get are only provisioned via coupons. In 2015, Venezuelans lost 8.5 kilograms on average (The Economist, April 2017).
Venezuela was an exemplary democracy in Latin America and a wealthy country that led the world by its oil reserves. How did they manage to drive the country into this decline?
The beginning: Hugo Chávez’s Venezuelan socialism
Hugo Chávez, who finished a military college, took part in a failed coup in 1992 and was imprisoned as a result. Following his release, Hugo traveled around Latin America and befriended Fidel Castro when he was in Cuba. Shortly afterwards, he founded a political party named ‘The Fifth Republic Movement’ and was nominated for the 1998 presidential election. Venezuela’s poorer demographic had first noticed Hugo Chávez at the time of the failed coup and started supporting him because of the fiery speeches he gave on TV.
In the election, Hugo Chávez promised a broad socio-economic reform, and the way he expressed his ideas was seen as revolutionary and inspiring. It allowed him to gain support from the poor and the working class, in a country where the gap between the rich and the poor was huge. The election turnout stood at 63 per cent, and Hugo Chávez was elected President with 54 per cent of the vote.
After assuming his presidency, Chávez reshuffled the parliament and put his people in. At the time, the presidential term was set at five years by the constitutional law, and re-election was allowed only after two elections. But Chávez managed to have changes made, extending the presidential term to six years and removing the limits on re-election. He branded the Supreme Court as corrupt and replaced its members with his people, which enabled him to centralize the legislative, executive, and judicial powers under his authority.
During his presidency, the price of crude oil reached 100 dollars per barrel. It meant Venezuela, the most oil-rich country in the world, became extremely wealthy.
As promised, Chávez started his work to establish a Venezuelan socialism, building on Cuba’s experiences. He made social care free for all and started handing out food and cash to people. A total of 15,726 food distribution stations were set up across the country. Under the name of radicalization, which was claimed to be intended for diversifying the economy, Hugo Chávez went on to establish a large number of state-owned companies and made them assume control of private companies in oil, banking, cement, health, food, and other industries. This pushed international companies such as ExxonMobil and ConocoPhillips out of the country.
However, it didn’t take long before oil prices went down. Venezuela hadn’t accumulated enough capital to ride out the commodity cycle, so the government started issuing bonds abroad and raising loans, only to be able to avoid having to discontinue their free-for-all social care policy. They imposed a strict currency control and introduced fixed rates, which created a black market and devalued their national currency.
Chávez had his own TV program named ‘Aló Presidente’, where he spent hours expressing his opinion and scolding those who had different ideas. He even used to dismiss his cabinet ministers and officials during the program.
In 2013, Hugo Chávez died in Cuba, where he was being treated for cancer. As Chávez stated in his will, his close partner, Vice President Nicolás Maduro became the acting President.
The build-up: Economic and humanitarian crisis
Two months later, Maduro won a special election with an edge of 1 per cent of the vote over his opponent and was elected President. Maduro, who hasn’t completed high school and used to drive a bus, did not possess the same leadership skills as Hugo Chávez did. At the time, the price of oil was reduced to 40 dollars per barrel, which put the Venezuelan economy in a very difficult position. The government became eroded by corruption, and the private sector had no future because everything they possessed was being transferred to state ownership.
The government started printing money to be able to give government employees their salaries. As a result, the national currency heavily depreciated. As the extent of poverty expanded in 2014, people started protesting on a daily basis, opposing the government policy. Subsequently the protesters entered a heavy clash with the police and the military, which cost the lives of 43 people. The opposition gained control of the National Assembly after the 2015 election, and made a decision to hold a 2016 referendum on dismissing President Maduro from his office.
President Maduro reacted to this development by denouncing the National Assembly and suspending the salary of its members. Maduro was able to take such action only because Venezuela’s Supreme Court, the National Election Council, and the military have always been under the president’s control since Hugo Chávez’s time. To replace the National Assembly, President Maduro established the Constituent Assembly of Venezuela and held a new election in June 2017. The majority of the new assembly consisted of President Maduro’s people. In May 2018, President Maduro was re-elected as President in an election that had a turnout of 27 per cent.
These two elections were refused to be recognized by many countries internationally. Some countries even imposed a visa ban on President Maduro and some of his ministers and froze the assets that belonged to them.
At the same time, Venezuela has increasingly suffered from soaring crime rates. In 2012, 73 out of 100,000 people were murdered, and the number rose to 82 within two years as reported by the Venezuela Violence Observatory NGO. With a shortage of food, Venezuelans are suffering from hunger, which is forcing them to escape abroad. The number of Venezuelan refugees has now exceeded those from Syria. Venezuela has been going through both an economic and a humanitarian crisis at the same time. Meanwhile, President Maduro has been claiming that what is happening is not a crisis, but propaganda by the United States and other capitalists and an economic warfare waged against Venezuela.
A dictatorship that has the military under its full control has stopped caring about its people, whether they have become refugees, are going hungry, or losing their lives.
This is the story of “Viva Venezuela!” – A country that is dependent on one commodity and has non-transparent public governance, a nation that has sunk in corruption and allowed its government to get rid of the free market.
How much time is needed before the people become capable of holding the government accountable and providing oversight, in addition to voting to elect? This is an underlying principle of democracy.
2019.01.09
Trans. by B.Amar