The revolution that was not
Thursday، June 09، 2016
Venezuela is heading inevitably towards the precipice. Its economy is on the brink of collapse, and the country's governance is increasingly precarious. The recovery seems distant and, in any case, it will take time. The situation will only get worse before it starts to get better. Primarily, the crisis must be overcome. The question will be whether achieving this would be possible within the institutional channels and without an outbreak of violence that would aggravate the situation even more.
How is it possible that in less than twenty years, this happened in one of the richest and most stable countries in Latin America? What responsibility does the "Chavismo" and the "socialism of the 21st century" bear to reach this state? How and when can the current critical situation be left behind?
The first thing one should notice is the historical origin of this mess. The Chávez phenomenon did not occur in spontaneous generation. On the contrary, it responds to a process of critical deterioration of the political regime throughout the 1980s. The country was eaten away by corruption, social inequality and great poverty that severely contrasted with the wealth of a ruling class forged around oil revenues. The prosperity of the previous years, the social, and political development soon vanished. The social conflict arose along with the growing disenchantment with the traditional parties, Democratic Action (AD) and Social Christian (COPEI), and with politicians in general, prepared a fertile ground for the emergence of an alternative formula. Anything seemed better than what the situation reached.
This formula suddenly had a name: Hugo Chávez. Under the usual speech and forms of discrediting politicians and traditional politics, he was able to channel popular anger and disappointment from various sectors of the nation. Through a deep social discourse, cautious at first and quite close to that of European socialism, Chávez managed to be identified as the reliable alternative, as the necessary leader for that moment of unease. One should not forget, that in 1992 Lieutenant Colonel Chávez led a failed coup, an action for which he was convicted, imprisoned and finally pardoned.
Chávez was elected in 1998 by an overwhelming majority that saw in his leadership the hope for a country that could seize the possibilities of oil power. People trusted his alternative figure as the illusion of a regime distanced from corruption; which was attributed to his progressive discourse to enable overcoming the country’s deep social fractures.
With this clamor ended the twentieth century in Venezuela. Almost twenty years after, the “Chavismo” remains in power, and the situation is, paradoxically, worse. A peculiar metamorphosis, sometimes overlooked, took place within the process. The socialist discourse slowly developed into radical populism, leading to so-called "Socialism of the 21st century". At the same time, autocratic tendencies were revealed under the disguise of democracy. However, one election after another the government renewed its majority of seats and consolidated its hegemonic domination. The attempt of a coup in 2002 and the 2004 recall referendum only contributed further to strengthen the government’s power.
Thus, despite allegations of democratic setbacks, and threats of economic policy risks, the governmental stability was not compromised. Meanwhile, in this context a silent betrayal was taking place: that of the promise of political renewal and social development.
Several factors explain this situation. First of all, it should be noted that for one decade, until 2014, oil and other abundant natural resources in Venezuela remained at fairly high price levels. These substantial and recurring revenues, together with international reserves of more than US$40 billion, and an expansionary monetary policy, funded redistributive social welfare policies that, were politically very rewarding. However, despite having a laudable purpose, the economic viability of such policies were, to say the least, doubtful.
Hence, government social programs articulated around subsidies and grants that used to reach the poor and marginalized sectors. Millions of people felt that for the first time the state took care of their needs, and gave them a voice. Macroeconomic concerns about the sustainability of this effort were not part of the political sentiment that the government initiatives had awakened and nurtured. The disenchantment of a shrinking middle class was not enough to counterbalance the fervor of the popular sectors, who believed that they were better off than before Chávez and considered that, finally, one of their own ruled: a man of the people.
Venezuela's economic strength also served to underpin its international political influence, especially in Latin America and the Caribbean. Its popularity increased in a very favorable ideological context, marked by the rise of leftist parties and leaders in Brazil, Argentina, Chile, Bolivia, Ecuador, and Nicaragua, among other countries in the region. Despite its potential differences and discrepancies, these countries articulated a regional political tendency alternative to the traditional American influence. Also, at the global level, strategic alliances with actors like China and Russia, and even Iran, around energy investments and common political messages, were useful to Chávez. All this gave the government an appropriate scenario to strengthen its internal leadership and gather significant international support.
Domestically the government's strength for years was faced with a weak and fragmented opposition, identified as the remains of traditional parties. This situation was expressive in the legislative elections of 2005, when opposition parties and movements decided to withdraw from the race, leaving the way clear for the government to reinforce its control over all areas of the state. The internal debate was then conditioned by the inability of the opposition to articulate a collective effort aimed at channeling a widespread discontent and provide an alternative to the government.
Furthermore, until a couple of years ago an apparent stability served as a masquerade for the precariousness of the Venezuelan economy and democracy. The use of international reserves, the irresponsible issuance of currency, and an artificial price and exchange controls served as factors to give the impression that the situation was not so dire and reinforce the government's message that accused the opposition of wanting to spread chaos.
Suddenly everything began to change in 2014. The government's effort served only to postpone the inevitable collapse of the economy. The situation laid bare the magnitude of the crisis and exposed the government to an unstoppable deterioration. The grim consequences of economic policies, expressed in years of waste and degradation of the production structure, began to become evident, and thus the basis for government policies began to erode.
Food and medicines began to be increasingly scarce and long queues to buy essential items –toilet paper, toothpaste, milk, oil, sugar– were suddenly impossible to deny. Informality and black markets, and crime of all kinds found ideal conditions for expansion. Power outages were common, and Caracas became one of the most violent cities in the world. It is worth noting that such power outages took place in a country that is supposedly an energy superpower and has the largest oil reserves in the world.
Key economic and social indicators reflect the significance of the situation. According to the International Monetary Fund (IMF) the economy will suffer from a ten per cent decline this year; while inflation, already the highest in the world, will exceed 700 per cent, which is the prelude to an announced severe hyperinflation. The real devaluation was around 100 per cent in the last two years; unemployment, poverty, and foreign debt continue to increase; and international reserves are at a minimum level in a decade. All this has produced a vicious circle to the point that “it can be said that the Venezuelan growth collapse has led to more inequality and poverty and redistributive efforts have by some means affected economic growth”.
As a consequence of blatant political manipulation, the production capacity of the state oil company, PDVSA has been reduced by about 25 per cent since 1999. In return, the share of oil exports has increased to over 90 per cent, increasing the economic dependence of the country solely on oil. The production infrastructure has deteriorated significantly as a result of the exchange rate policy used as a political tool, continuous expropriations, and a notorious legal uncertainty. All in the midst of an international economic situation that is not very encouraging. The debt default seems, then, inevitable.
Only now, when Venezuelans of all social classes have felt the severity of the crisis in their pockets, when “it is probably too late to avoid a Venezuelan catastrophe altogether,” political change has begun to take shape. Without palliative social programs, the government is floundering. President Maduro is in dire straits: “he cannot disavow Chávez’s economic policies without risking a backlash from hard-core supporters of the late president, and he continue with those policies without destroying the economy. As things stand, then, Maduro is stuck between a coup within his own party and a potential explosion of anger among the public”.
At this juncture, the opposition has managed to discard their differences and make a joint effort through the Democratic Unity Roundtable movement (MUD). The recent results of the election of 2015, where the opposition won an overwhelming majority in the National Assembly, are an initial expression of the change that looms. It remains to be seen the extent and cohesion of the movement in the long run. However, it is noteworthy that in the first months of legislative work, the movement has managed to maintain unity, and to project an enduring political action. It also remains to determine if its leadership is strong enough to eventually seize power.
Perhaps the most significant change to the political process is the increasing loss of support for the government. While it is true that there are still about three years for the presidential elections which is a long time, especially in the current Venezuelan scenario, it is increasingly clear that political trends reveal a substantial change in the correlation of forces. The outcome of the legislative elections would be, in this sense, the first step of a global rearrangement of the political map with an uncertain prognosis.
Besides, the regional context has also changed significantly. International support of the Venezuelan government is currently uncommon, and its ability to maneuver has reduced to a minimum, without neither the political alliances of the past nor the resources and influence to renew them. Its former allies have lost power, as in the significant case of Argentina, or have weakened amid its own crisis, as in Brazil. Neither on the external front is there a favorable outlook for Venezuela.
It is difficult to predict what could happen in the near future, but it is very likely that in the course of 2016 the economy will collapse. This could precipitate the fall of the government and bring about substantial political changes. The opposition could then find the right scenario to seize power. Overtaking the presidential term or a recall referendum are possible institutional solutions already outlined that could materialize. The essential question is whether is this possible without a degraded social conflict that ends in a violent confrontation.
The question of who would lead this process in opposition must also be addressed. There are three basic choices: Henrique Capriles, governor of Miranda State who narrowly lost the 2013 presidential election; Leopoldo López, currently imprisoned for alleged public incitement to violence; and Henry Ramos, current president of the National Assembly and has broad political experience. Perhaps López is the one with greater influence within the opposition, but it is also possible that his candidacy would generate more resistance in the government sectors. Capriles is perceived by such bases as too soft. Ramos could then be an intermediate, transitional figure to lead the opposition on this journey.
Venezuela faces a major crisis, and its future marked by uncertainty. After almost twenty years of “Chavismo,” it is evident that the promised revolution failed. Poverty, corruption and other structural gaps of Venezuela are not, an exclusive product of “Chavismo”. What is reprehensible is that Chávez and his regime squandered the opportunity and breached their promises. Instead of improving, the situation has worsened, the social conflict has deepened, and the country is worse off than 18 years ago.
The country must be rebuilt once again. One of the few positive legacies of this period is the certainty that, whatever the orientation of the government, it must acknowledge the millions of poor Venezuelans who are not willing be left out of the political process. The solution must, therefore, be inclusive, collective, and respectful of democratic channels.
 Samuel Freije (2014), “Income Distribution and Redistribution in Venezuela”, in Ricardo Hausmann and Francisco Rodríguez, eds. Venezuela Before Chávez: Anatomy of an Economic Collapse. Pennsylvania State University Press.