Year LX, 2018, Single Issue
A NATION’S AGONY
Venezuela’s ongoing political and economic decline, which started five years ago, is dragging the country towards catastrophe. Despite being among the ten countries with the biggest oil reserves in the world, Venezuela has been brought to its knees by senseless policies, and its starving population forced to start fleeing to neighbouring states. It is estimated that in the course of 2017 and the first part of 2018 over two million Venezuelans left their homeland, often illegally, thereby extending to this part of South America the sad phenomenon of emigration that is already known elsewhere in Latin America.[1] Considering that Venezuela has a population of 31 million people, the scale of the exodus is clearly huge. We are talking about numbers that make the migratory flows we are seeing in Europe pale into insignificance,[2] also because, in Venezuela’s case, the phenomenon has been concentrated in a period of little more than a year. Venezuela is emptying of people; what is more, those that have left the country, mainly for Ecuador or Peru, are becoming virtually ghettoised and obliged to do the most humble jobs despite, in many cases, having a high level of education. Ironically, the Ecuadorian and Peruvian populations are tending to subject the Venezuelan newcomers to the same humiliations inflicted on their own compatriots living in Europe or the USA.
Although the election of Chávez as president of Venezuela was greeted with optimism across Latin America, and also welcomed by many Western political forces, which saw him as the prototypical friend-of-the-people, anti-capitalist, anti-American president, Venezuela’s crisis can actually be traced back to the early years of his mandate. Chávez’s rise to government, together with that of Morales in Bolivia, seemed to offer a new road to socialism in a subcontinent that had previously seen socialism evolve into dictatorship, first in Cuba and then in Nicaragua. After embarking on a policy of nationalisation and introducing a strongly anti-US foreign policy, Venezuela under Chávez lost little time in entering into trade agreements with Cuba, Nicaragua, Russia, China and Iran, leading the country to be classed as a “rogue state” by American president George W. Bush. The most important aspect to note is that Venezuela’s economic and trade policy was linked to crude oil extraction and oil prices on the international markets. In the early years of Chávez’s rule, the price of oil per barrel was high, making it easy for the president to dispense largesse to the population as a whole, by applying merely “political” prices to many primary goods. The cost of a litre of petrol in Venezuela during Chávez’s time in office was 0.01 euro and even today, with the crisis in full swing, it still costs only a few cents, although the problem nowadays is finding fuel stations that have any available to sell. Indeed, having seen many wells forced to close due to a lack of spare parts, Venezuela is now in the paradoxical position of having to import oil. The entire Venezuelan economy has been based on oil for many years, but the rich revenues generated, instead of being at least partly reinvested in infrastructure or new economic activities, have been used to pay for the purchase of goods and services from abroad, particularly from countries hostile to the USA. Cuba, for example, provided doctors and drugs, which Venezuela paid for in barrels of oil in a sort of barter arrangement that did not involve the movement of capital, while arms were purchased from Russia and Iran. Chávez’s charisma and popularity, his carefully crafted man-of-the-people persona, and his obsessive use of propaganda to exalt his “achievements” all helped to conceal the country’s authoritarian drift, which quickly led to the birth of a regime. However, the true nature of the situation did not become clear until the time of Chávez’s death in March 2013, and the sharp drop in oil prices a few months later.[3] After fourteen years with Chávez at the helm, the presidency was taken over by his anointed successor Maduro, another so-called man of the people,[4] who, however, lacks the charisma that had allowed his mentor to rule unchallenged.
Maduro’s assumption of the presidency and the simultaneous collapse of oil prices exposed the flaws of a policy that was leading the nation towards social chaos and economic default. Maduro responded to the first signs of the crisis by tightening police powers, closing down newspapers that challenged him, and imprisoning opponents. The lack of primary goods, the country’s astonishing need to import refined oil, and the central bank’s lack of foreign exchange reserves were not allowed to be seen as signs that his policy was failing; instead the crisis was attributed to various other alleged causes: the middle and upper classes’ exportation of their wealth abroad; a US-led conspiracy to starve the people of Venezuela and oppose the government’s socialist policies; and attempts, by opponents, to slander the government. Maduro’s populist approach, like that of Chávez before him, simply rejected the very clear evidence of what amounted to a demagogic economic policy. Ultimately, Maduro’s desire to conceal the true causes of the crisis prompted him to hold a constitutional referendum that effectively marked the definitive transformation of his government into a formal dictatorship, sanctioned by a popular vote. Maduro won his referendum amidst accusations of fraud and protests from the entire international community, with the sole exception of Russia and China (the latter refraining from comment). The first consequence of the referendum result was Venezuela’s indefinite suspension from Mercosur, under the terms of the organisation’s commitment to the democracy rule set out in its Protocolo sobre compromiso democrático:[5] the other full members of Mercosur — Argentina, Brazil, Uruguay and Paraguay — voted unanimously to suspend Venezuela, accusing Maduro of violating fundamental democratic rights.[6] This political act by Mercosur sent out a hugely significant message: those that do not respect the fundamental rules of democracy cannot be part of a community and deserve to be isolated. It is a message that we in Europe would do well to heed, given the attacks on the foundations of democracy seen, for example, in Hungary and Poland.
With Venezuela now lacking the support of this continental brotherhood, the regime has stepped up its insistence that the country’s national sovereignty is under threat from treacherous neighbours and foreign powers that, it argues, are determined to subdue a people’s government — the very same government that, notwithstanding the financial aid received from Moscow in early 2018, has been forced to relinquish its national currency (the bolivar) because the country’s economy is in default. Since the end of 2017, the rate of inflation in Venezuela has remained at absurd levels (four-digit percentage rates and even higher), with the result that the price of goods, of any kind, can change completely within the space of a single day. This lack of currency has resulted in a freeze both on domestic purchases and on foreign imports. Many commentators have likened Venezuela’s financial situation to that of the Weimar Republic in the last century. But unlike Weimar Germany, which had just come through a disastrous war and was burdened with exorbitant claims for compensation from the powers that had emerged victorious from World War I, Venezuela has brought its social instability and chaos on itself, in the name of an ultra-sovereignist agenda. In 2017 the rate of inflation in the country was estimated to stand at 1,000 per cent, before rising to 1,000,000 per cent in July 2018, while its GDP was 50 per cent down on the value for 2013.[7] These are figures that are clearly spinning out of control. What is more, the crisis has also had dramatic repercussions beyond the country’s own borders. Venezuela is indeed one of the world’s main oil-producing countries, it is a member of the Mercosur regional agreement (albeit currently suspended from this), and it enjoys financial support from China and Russia, a fact that clearly sets the country in opposition to the USA. Russia is the only nation in the world to have accepted the petro, i.e. the cryptocurrency imposed by Maduro in place of the bolivar. The value of the petro is determined by the price per barrel of oil. Maduro calls it a cryptocurrency, but this is a misnomer: what Venezuela is actually doing is selling Russia its oil production for the coming years in exchange for immediate financial aid. But the point is, not even Russia can indefinitely sustain a nation of 30 million people that is in economic agony.
The most serious aspect of all this, however, is Venezuela’s isolation from the rest of its continent, which, among other things, is opening up a deep divide within Mercosur. On September 4th 2018, the foreign ministers of 13 Latin American countries met in Quito, the capital of Ecuador, to discuss the Venezuelan migration crisis. One city particularly hard hit by the daily flight of thousands of people from Venezuela is Cucuta in Colombia, which, in just over a year, has been transited by more than 600,000 refugees. Meanwhile, in the northern Brazilian province of Roraima, which lies on the border with Venezuela, the army has been deployed in an attempt to contain the migratory flow. Peru, Ecuador and Chile are now demanding that all Venezuelans entering their territory, both refugees and those simply passing through, have an entry visa and passport; until July 2018, under the terms of a South American Schengen-type agreement (now suspended), all they had needed was an ID card. The news agency Pressenza has dismissed the Quito summit as pointless, claiming that it was intended to damage Venezuela’s image.[8] Meanwhile, the Venezuelan government is suffering from the “siege syndrome” that typically afflicts populist governments (whether in the American continent or Europe) that, finding themselves to be incapable of governing effectively, see everyone around them as the enemy: international institutions, banks and neighbouring countries, as well as the forces that they loosely call “the elite”, being unable to define them any more precisely than that. Because the point is, they feel they have to indicate an enemy in the name of the sovereign people for whom they claim to speak.
Maduro has rejected as fake news reports of Venezuela as a nation in disarray with a fleeing population, while at the same time he has asked the UN to contribute half a million dollars to the Venezuelan government’s efforts to help departed citizens return home (under its “Return to the Homeland Plan”), claiming that they fled “…because they had been cheated and misled… only to find themselves robbed of their belongings”.[9] These claims show a complete loss of contact with reality. However, with the opposition to Maduro incapable of acting in unison, and with some of its leaders in prison, there is a risk that the army will ultimately become the arbiter of this situation. This would certainly be a sad outcome for a country that has already experienced military dictatorship in the past, and a sad return to the past for the whole of Latin America, which, from the 1980s onwards, has seen the collapse of all its military regimes and the advent of democracy. The wind of Venezuelan populism, with its pursuit of easy consensus, is also being felt beyond the country’s borders. The recently elected president of Brazil, the largest Latin American country and a founder member of Mercosur, is a populist with an army background who, on more than one occasion, has eulogised the years of military dictatorship and harshly criticised Mercosur’s trade policy.[10] The whole Venezuelan situation and the wind of populism that is now also blowing from Brazil threaten to undermine not only the role of Mercosur, but also the democratic advances that began with the fall of Latin America’s military regimes in the 1980s.
Stefano Spoltore
[1] Agencia Brasil, 24 August 2018.
[2] Avvenire, 15th September 2018. Between January 2018 and the time of writing (October 2018), around 74,000 refugees landed on EU shores after crossing the Mediterranean.
[3] At the time of Chávez’s death in March 2013, a barrel of oil cost an average of 109,18 dollars. In August 2018 the price was 72.69 dollars (and the previous March it had dropped to 66,27 dollars). https://www.clal.it/mini_index.php?section=petrolio.
[4] Maduro, before becoming Chávez’s devoted supporter and right hand man, was a bus driver and trade union leader.
[5] The Protocolo de Usuhuaia sobre compromiso democrático en el Mercosur was signed in July 1998 and amended in December 2011. Venezuela’s suspension is the third time it has been used against a member state; on two previous occasions it was implemented against Paraguay.
[6] See: Venezuela e Mercosur: la difficile via verso la democrazia, Il Federalista, 59 (2017), n. 2, p. 169.
[7] See: Business Insider, 26 July 2017 and InvestireOggi, 24 July 2018.
[8] Rosi Baró, Making up a migration crisis to create a “casus belli” against Venezuela?, Pressenza International Press Agency.
[9] Avvenire, 22nd September 2018.
[10] See: El Observador, 21st October 2018; La Nación, 29th October 2018.
