What is happening in Venezuela?
In recent years, Venezuela has appeared many times in international newscasts as an example of a ruined and impoverished country, as a failed state, as the umpteenth example that socialism is always doomed to failure. However, only a few decades ago, Venezuela was a model to follow in Latin America, an oasis of prosperity and democracy. Before, it was Colombians, Chileans, and Peruvians who tried to reach Venezuela at any price, and not the other way around. What happened? How did a rich and prosperous country become what it is now? Before telling that story, we must clarify something important: in Venezuela THERE ISN´T bourgeoisie similar to those of other Latin American countries. Almost all the income of the country comes from the oil rent, which is administered directly by the Venezuelan State.
In Venezuela, the majority of businessmen owe their wealth and power to their friends within the government, and not to their own merits. Venezuela was a classic example of crony capitalism. In Venezuela, the liberal right never governed.
It all started in 1974, when the Social Democrat Carlos Andrés Pérez, of the Democratic Action (AD) party, came to power. Pérez undertook an ambitious program of construction and social assistance, and nationalized oil, creating PDVSA. However, even so, Perez indebted to the country to pay their plans. His successors, the Christian Democrat Luis Herrera Campins and the Social Democrat Jaime Lusinchi, paid dearly when oil prices fell in 1982. The government had to devalue the currency and introduce a system of exchange control.
CAP returned to power in 1989, with the votes of a country that believed that the boom of the 70 would return. But that was impossible because Venezuela was on the verge of default and there was no money. CAP had to go the IMF to ask for help and had to adopt an adjustment plan, which provoked a popular revolt, the Caracazo. The State had to take the army to the streets to quell the uprising, with hundreds of deaths. That massacre took away much legitimacy from the reforms of Perez’s new government.
Worse still, there were soldiers in the army who had been conspiring against democracy for decades, as the group of Lieutenant Colonel Hugo Chávez. The two coup d’état of 1992 (both led by Chávez) further weakened the democratic government, even though both were militarily defeated, and Chávez became a popular figure in a country disenchanted with democracy, which had proven to be corrupt and ineffective. Perez was impeached by Congress in 1993, and after a brief provisional government, the Social Christian Rafael Caldera was elected in the elections of that year.
Caldera tried to return to the old paternalistic system, but he also failed and was also forced to go to the IMF, losing the popular support he had. The bases were set for the arrival to power of Hugo Chávez.
We will never know if Chávez was really a socialist from the first minute of his government or he became one with the years. In any case, Chávez did not declare himself a socialist until 2005. However, he quickly took control of all the public powers, summoning a national constituent assembly in 1999 that dismissed the old Supreme Court and appointed a new Supreme Court faithful to him.
The oil boom of the 2000s allowed Chávez to consolidate his position in power, but even so, Chávez further indebted Venezuela to pay for its large social programs. Worse, Chavismo was a thousand times more corrupt than the Old Republic, and that’s why almost all the money ended up in the pockets of the Chavez leaders and their friends.
The premature death of Chávez in 2013 weakened the regime since his subordinates’ weren´t anywhere near as popular as he was. Only then is it possible to understand how Nicolas Maduro almost lost the presidential elections of April 2013 against the opposition center-left candidate Henrique Capriles. It is more according to several studies of international institutions, it is very likely that the real winner was Capriles.
In 2013, despite the fact that the oil barrel was still at 100$, there was already a shortage of food, electric rationing, shortage of medical supplies, high insecurity, and inflation reached 60% per year. Popular outrage provoked the youth rebellion of 2014. Maduro had to pay a high price to stifle it: to repress the protesters with blood and fire, with 44 dead.
During the period 1999-2014, more than one million Venezuelans emigrated to other countries, seeking a better future and fleeing from high crime. The economy is so sick that the government came to prohibit the buying and selling of foreign currencies. But everything can get worse: in 2015 oil prices plummeted. Annual inflation reached 180%. The minimum wage was barely equivalent to 30$ (at the black market rate). That is why the opposition managed to win the parliamentary elections of 2015 with a two-thirds majority.
However, Chavismo was not going to give up power so easily. The Chavez Supreme Court declared unconstitutional the laws promulgated by the opposition Parliament and then proclaimed “in contempt” (a figure that doesn´t exist in the constitution) to the assembly. Already in 2017, another big wave of protests began. Maduro’s response was the unilateral convocation of a national constituent assembly, even though the law established that a referendum should be called first to approve or reject the ANC. The opposition assembly convened a referendum on its own in July 2017, where 7.6 million Venezuelans rejected the announcement of the ANC.
However, the regime went ahead, repressing the protesters with a balance of 157 dead and thousands of wounded. On July 30, 2017, despite the protests, the election of the constituent assembly took place, without opposition participation. The regime claimed that 8 million people voted, but the company in charge of the electoral software, Smartmatic, proves that the government made fraud.
From then on, the economic collapse of the country continued. In 2016, annual inflation had been 550%, and in 2017 it reached 2616% annually. To make matters worse, in November of 2017 Venezuela had a monthly rise of 57%, entering into hyperinflation. Unemployment reached 33.3% at the beginning of 2018. Youth unemployment figures are even worse, and the majority of Venezuelan youths have left their homes, including marching on foot from the border.
The minimum wage today is equivalent to only 6$ at the black market rate. That means that right now the poor are much worse off than before Chávez came to power. Today 87% of Venezuelans are in poverty, and they depend on remittances from emigrated relatives or the miserable aid of the regime. School dropout exceeded 50%.
Venezuela was even original in hyperinflationary experiences: the shortage of cash. Already in January of 2017, the government had to take a new monetary cone to circulation, but in a matter of months, its highest bill, of 20,000 bolivars, was worth only 1.5$. The cash crisis worsened during the first months of 2018, reaching up to 500% commission to informal cash vendors.
The government implemented a new monetary reconversion in August 2018, removing five zeros from the currency. But by February 2018, the maximum bill of 500 “sovereign” bolivars is equivalent to 20 cents of a dollar. Hyperinflation reached 1,698,488% annually in 2018.
The energy crisis also worsened, and in border states such as Zulia or Táchira, blackouts of 15-20 hours were experienced during particularly critical phases of the electricity service.
It is true, as Chavismo affirms that the economic collapse of Venezuela was accelerated by the United States sanctions, but what Telesur will not tell you is that those sanctions began only in August of 2017, when the country was already sunk in the abyss.
The Chavez constituent assembly convened illegally presidential elections in May 2018, so the opposition did not participate, except for the socialist Henri Falcón, former governor of Lara state. Maduro “won” those elections thanks, once again, to fraud and extortion, with a supposed 67% of the vote. Juan Guaidó, the new president of the National Assembly, relied on the absence of legal presidential elections to assume the provisional presidency of Venezuela due to the “power vacuum” generated, based on what is stipulated in the current Constitution. According to Guaidó, Maduro is a usurper who clings illegally to power. The Western powers, including the United States and the European Union, have recognized the government of Guaidó, which also has the backing of two-thirds of the deputies of the AN, among which several Chavez deputies stopped supporting Maduro.
Today Venezuela fights, once again, for freedom and dignity, for being able to live without needing to beg the State, for a free and democratic society. Socialism has proven once again its past failure, and right now any hope for Venezuela goes through capitalism and the equal opportunities that Chavismo denied its own people.