Venezuela’s spiraling crisis reflects the convergence of a supreme failure of governance and an overflow of organized anger.
The seeds of the current governmental failure were planted long ago. They begin with the massive spending embraced by former Venezuelan president Hugo Chavez in the mid-2000s. Benefiting from high oil prices (Venezuela has the world’s largest proven oil reserves), Chavez massively increased spending on education, health, and patronage-based programs to strengthen his rule. And it must be said, for a short time, the investments in social services led to an improvement in the lives of Venezuela’s poor.
But his ambitions also required spending without limit or efficiency. Chavez also appropriated the most efficient private sectors of the economy and ran them into the ground. This socialist usurpation of the efficient had the same result that socialism always does. Under the continued leadership of Chavez’s successor, Nicolas Maduro, Venezuela’s oil output — its critical foreign capital generation source — has plummeted to levels not seen since an oil workers strike in 2002-2003.
The consequence has been Venezuela’s utter inability to provide the basic services that many of its citizens rely upon. Perversely, the failure has also encouraged Maduro to double down. Leading a regime that is built on patronage to the faithful, but beset by an ever-declining pool of resources, Maduro has had to move what little remains within his palace walls. The primary beneficiaries have been the top ranks of the Venezuelan military, who are showered with gifts in return for supporting Maduro’s continued power. Maduro has also transferred major sectors of the economy to the military to include control over food imports, medicines, and value-added products.
The data illustrate the consequences. The economy has been mired in a major depression for at least the last five years, with more than 16 percent economic retrenchment in 2018. Inflation over the 2018 period was an astounding 1.3 million percent, with the International Monetary Fund forecasting a 10 million percent hyperinflation rate in 2019. And with food supplies controlled by the military and those few who can pay on the black market, child mortality rates have skyrocketed. Venezuelans lack that which they need to survive. But if you want to understand what socialism has done to Venezuela’s children, look no further than the World Bank child mortality graph below.
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Unsurprisingly, many Venezuelans have decided that enough is enough. The last relatively free elections in December 2015 — relative being the operative term, in light of government intimidation — proved as much. The opposition bloc took control of the parliament, the National Assembly, with a collapse in support for the governing socialists. But since then, Maduro has stacked the deck against democracy, creating a separate governing chamber, the Constituent Assembly, that acts outside the National Assembly.
But while frequently violent street protests against the government have afflicted Venezuela since the 2015 election, the most recent protests have taken things to another level altogether. Under the new leadership of the charismatic primary opposition leader and U.S.-recognized interim president, Juan Guaido, the opposition has finally been able to match its anger to a sense of practical political purpose.
What’s also changed is the alignment of many Latin American states and the United States against Maduro. With Venezuela’s neighbor, Colombia, increasingly infuriated with refugee flows flooding across its borders, and with Brazil now-led by conservative capitalist Jair Bolsonaro, Maduro is isolated. Indeed, his only remaining allies of consequence are Cuba, China, Iran, and Russia. Added to a Trump administration that is far more skeptical of Maduro than the Obama administration was, Chavez’s successor has never been under more pressure.
Whatever happens next, remember that what’s happening now has been a long time coming.
