The world press, suddenly aware of the deepening crisis in Venezuela, is relishing in the Bolivarian Revolution’s woes. But its coverage rarely goes deeper than images of poor people clamoring for food. The photos index the situation’s seriousness, but they do not capture its complexity.
The crisis is economic and political, and sits on the edge of social confrontation. At stake is not only the economic future of Venezuela, but also the future of the country’s mass movements.
The crisis’s most visible form is the scarcity of basic goods and medicines, which worsens the further one gets from Caracas. Venezuelans hoping to buy products like coffee and rice or toilet paper and diapers begin lining up early each morning. But supermarket shelves are virtually empty, and essential drugs and medicines are unavailable.
The government regularly publishes official prices for key products, but this is little more than propaganda. Occasionally, some goods are sold at those fair prices. But, like all the rest, they then enter black market, called the bachaqueo, where they are resold at up to one hundred times their official price.
The government occasionally undertakes measures against the parallel economy, but they are no more than token gestures.
There are now two economies in Venezuela. In the official economy, which is based on the bolivar, the basket of essential goods and services currently costs almost ten times as much as the minimum wage provides workers. The only place Venezuelans can multiply their wages’ value is on the parallel market, where an estimated 50 percent of the workforce now operates.
Prices keep rising. Last year’s inflation rate was officially 250 percent, but in reality it was much higher. Projections put the 2016 rate at least 700 percent by year’s end.
Of course, some sections of the population are protected from the worst effects of this economic disaster. Military and government employees have higher wages and access to well-stocked special supermarkets. Until recently, the state also provided some protection to the poor urban barrios — the traditional support base for Chavismo — but that is failing too.
Next to the official economy, where most Venezuelans struggle to survive, is the US dollar economy. Those with access to foreign currency fill Caracas’s expensive restaurants and ostentatiously drive their massive four-by-four vehicles around the cities. For them, the crisis is a matter of law and order, not survival.
The crisis, as well as the increasing economic inequality, is the result not only of global economic forces — especially falling oil prices — but also of years of corruption that began during Chávez’s presidency.
In 2006, after winning the presidential election with 63 percent of the vote, Chávez announced the creation of the United Socialist Party of Venezuela (PSUV) to drive Venezuela’s transformation through new social programs, economic diversification, and popular democracy. His promise persuaded six million people to join the party in a matter of weeks.
But the PSUV almost immediately became an instrument of control from above — the political expression of a centralized state — rather than an expression of mass popular democracy. As a result, the very corruption Chávez promised to stamp out flourished.
Much has been written about corruption, but individual greed and the opportunities for profit provided by scarcity only offer a partial explanation. There must also be a lack of popular oversight in government affairs. Chávez’s conception of “twenty-first century socialism,” a grassroots-led process that would hold leaders permanently accountable to their mass social base, might have been able to rein in corruption.
But that level of popular control never developed, allowing corruption to continue. This is the key issue in the political crisis that has pushed Venezuela to the brink of collapse.
The income from the oil industry, which enjoyed a decade of historically high prices, both paid for the social programs at the heart of Chávez’s political project and enabled the corruption that would sink it. Major projects — the rail system, highways, aluminum and steel plants — stand half-finished, waiting for necessary raw materials.
Efforts to diversify the economy, like the Barinas sugar refinery, failed or never began, and the state’s major investments disappeared. Social projects, like the new Barrio Adentro health system, began to deteriorate.
The Chavista bureaucracy at all levels engaged in currency speculation. Through a bewildering succession of curiously named agencies, applicants were sold dollars at special low rates purportedly to import food and medicine.
The majority of goods either never arrived or entered the black market at vastly inflated prices. You could buy a dollar for ten bolivars and sell it (or goods of that value) for one thousand.
In October 2015, a group of dissident Chavista figures issued a public letter denouncing the corruption spreading uncontrolled through the state’s upper echelons. They estimated that a minimum of $460 billion in oil profits had “disappeared” during the boom years.
Whatever the exact figure, Venezuelans had clear evidence that elements of the PSUV government had laundered money and participated in capital flight on a massive scale.
Last December’s parliamentary elections revealed how dissatisfied Venezuelan citizens are with the party. Hugo Chávez regularly garnered around 60 percent of the popular vote; his successor Nicolas Maduro won the presidency with just over 50 percent in 2013. But a coalition of right-wing parties (the Democratic Unity Roundtable) captured a two-thirds parliamentary majority in December.
The result does not indicate a popular move rightward, but rather the PSUV’s dramatic loss of support. The Right gained relatively few votes (around three hundred thousand), but Chavismo lost around two million as the result of spoiled votes and abstentions. It was a clear signal to the heirs of Hugo Chávez — but they have ignored it.
Today, the PSUV has around a million nominal members, most of whom are state employees or functionaries and local political leaders. The PSUV has become, in other words, an instrument for maintaining political power and distributing money and influence. Internal criticism is immediately stamped out, and expulsions are routine.
The creation of the PSUV ironically ushered in a new state bureaucracy that would abandon democracy.
Power is now administered, particularly under Maduro, through patronage and corruption. The new ruling class skimmed off the fat of the oil-rich economy, and spent or banked abroad. Now the price of oil has collapsed, the public coffers are empty, and the state has nothing to offer.
What is most remarkable about the current crisis is that neither the Right nor government forces have any solutions to the crisis.
Since the election the Right has presented plans to privatize state enterprises, to roll back PSUV social programs (as Mauricio Macri is doing in Argentina, for example, and Temer plans to do in Brazil) and to remove Maduro from power so that they can carry those plans forward.
So far they have focused on the Maduro recall referendum, and not put forward any coherent economic program. They seem to be willing to allow the situation to deteriorate until it becomes unbearable — though not of course for the constituency they represent.
The Chavista state under Maduro, by contrast, has announced a series of measures, unlikely to do much do stop the crisis, that are like funhouse-mirror reflections of Chávez’s original platform.
New programs with new ministries and new vice-presidencies are dedicated to creating a “productive economy” separate from the oil industry. There is even talk of creating a new tourist industry. But without oil profits, the state is virtually bankrupt (though still paying off its foreign debt), and the productive economy effectively collapsed long ago.
Maduro calls on Venezuelans to grow their own vegetables, but has done nothing to prop up the collapsing agricultural sector. There are no real exchange or price controls, no expropriations, no visible attempts to take hold of the economy at all.
Increasing popular repression seems to be the only thing the government can accomplish. National guards watch supermarkets, but they are there to control the victims of the crisis, not to punish its perpetrators. (And in many cases to participate in corruption and theft themselves.)
Maduro’s recent declaration of a state of emergency is a confession of his failure to respond effectively to the crisis. But it may have a more cynical motivation as well.
The state of emergency effectively suspends constitutional guarantees, which may include the right to recall elected officials. While staving off the Right’s attempt to get him out of office, Maduro is betraying one of the central democratic pledges in Chávez’s manifesto.
Defenders of Chavismo, especially outside the country, stress that no one is allowed to starve in Venezuela today. But to suggest that this is any kind of achievement in a revolutionary country with an oil-rich economy is cynical in the extreme. Whether or not anyone is starving, the poverty that Chávez systematically reduced is rising again.
The government claims it is embroiled in an “economic war” and needs to mobilize in the face of an imminent invasion. Maduro draws parallels with Chile, where the right wing hoarded goods as part of its assault on Salvador Allende’s government between 1971 and 1973.
There is no doubt that Venezuelan capitalists are hoarding goods, which disappear and reappear without explanation and with ever-increasing prices. It is also true that capital taken out of Venezuela has only ever returned to nourish speculation, never as much-needed domestic investment.
But both sides of the political divide have profited from it. And while politicians call out their opponents, they are increasingly hard to tell apart. For example, one of Maduro’s current vice presidents for the economy, Perez Abad, is a businessman and a market-economy advocate.
The Maduro government’s most recent decision is the final betrayal of the promises of the Bolivarian Revolution. In mid-May he signed 150 concessions to as-yet-unnamed foreign oil and mining companies allowing the exploitation of the mineral wealth of Venezuela’s Amazon region, the “Arco Minero.”
The mining operation’s impact can be seen throughout the Amazon basin in water contamination, the expulsion of indigenous peoples, and systematic and permanent environmental destruction.
For those reasons Chávez himself rejected developing the region, where mining had been limited to small-scale artisanal operations. Maduro’s decision is an environmental catastrophe and a disaster for the indigenous peoples whose rights and territories are specifically protected under the Bolivarian Constitution.
Mining companies already represent 14 percent of the world economy today. Now they are invited back into a country that fought to expel them a decade ago.
The revolution remains in the hearts and minds of hundreds of thousands of people for whom Chavismo represented a deep commitment to change and social justice, to the redistribution of wealth and resistance to the predations of neoliberal globalization. That was the hope that Chávez offered, and the promise that Maduro betrayed.
Who Can Save Venezuela?
So why haven’t the people risen up against an economic crisis that so brutally affects the poor and the lower middle classes? When Venezuela has faced similar impositions from the global economy and its institutions in the past — as it did during the 1989 Caracazo — mass protests erupted.
The relative peace is not because the masses are unaware of the scale of corruption, the devastating mismanagement of the economy, or the increasing militarization of society. The catastrophic equilibrium still holds — although it’s impossible to say for how long — because of the residual loyalty of ordinary people to the idea and the legacy of the Bolivarian Revolution.
There is no confusion about what the Right wants and represents — a return to the worst of the old order. But the PSUV and the Chavista state have effectively disarmed and demobilized the force that beat back the 2002 attempted coup against Chávez and the bosses’ strike that followed — that is, the mass movement itself.
In 2002 the people were the subject of their own history, but today that role has been appropriated by a corrupt and cynical bureaucratic class, now interwoven with elements of the military, who uses its position for its own benefit and at the expense of the Venezuelan Revolution.
The future will begin when that mass movement, which had taken form so quickly in the past, once again occupies history’s stage once again. When it does it will address the lessons of these years, positive and negative, to help to shape the continuing struggle against capital.