Opinion Editorials, March 2014

Creative Destruction:

Venezuela, Ukraine, and the Superpowers

By Henry D' Souza

Is Venezuela, Ukraine?

Superficially, events in Venezuela look like they resemble those in Ukraine.  At the 2014 Hollywood Oscars, actors Jared Leto and Kevin Spacey mentioned the need for freedom of expression in both countries.  By nominating 12 Years a Slave, Brakhad Abdi, and Lupita Nyong’o for awards, Hollywood claimed they were using soft power in international politics. Other writers suggested that there were similarities between Venezuela and Ukraine.  Protests in both countries led to many deaths.  In Venezuela, for instance, two weeks of protests led to 18 dead and 200 injured.1   In Ukraine, the human toll was much higher.  Both countries are ostensibly fighting for peace and democracy.  Both countries are rich but split along ideological lines, one group favouring the West and the other a Stalinist dictatorship.

        But the differences between these two countries are enormous.  Ukraine is sandwiched between two Superpowers, Russia and the European Union.  On the other hand, Superpower intervention in Venezuela is indirect, the US intervening on behalf of free enterprise, and leftist Russian influences coming mainly from Cuba.  The US also uses Panama, Colombia and regional organisations like the Union of South American Nations (UNASUR) to influence Venezuela.  Venezuela therefore expelled 3 American diplomats for espionage and the US reciprocated in kind.2   

The anti-government protests in Venezuela are racial, while in Ukraine the protests involve whites only.  Before Hugo Chavez came to power the ruling class, of whites mainly, gained most from the wealth of the country; after the Chavismo Revolution the beneficiaries were mainly the poor and “coloured.”  Wilpert writes that, “The correspondence between skin color and class membership in Venezuela is quite stunning at times.”  There are upper class neighborhoods and barrios.  The anti-government protesters are usually light-skinned and the pro-Chavez defenders are dark-skinned.3     Some, who argue that there is no racism in Venezuela, state that most are mestizos, but no racism reinforces racism, say the opponents of this view.  

The diplomatic and economic developments in Venezuela proceeded on a different path than that of Ukraine.  In Ukraine, the Russians in East Ukraine did not try to impose their culture on the rest of the country.  In re-shaping the whole of Venezuela by his Twenty-first Century Socialism, Hugo Chavez did more than project his charisma.

Chavez saw himself as a modern day Bolivar, El Libertador, trying to liberate his country and neighbors from Imperialism.  Bolivar (1783-1830) opposed the King of Spain Joseph Bonaparte and favoured the creation of New Granada that included Venezuela, Colombia, Panama and Ecuador.  In 1824, Bolivar tried to extend his rule to Peru (1824) and Bolivia (1825).4   Similarly, Chavez tried to extend his Socialist ideology to these territories too, using his petro-bolivars. 

Chavez showed that he was capable of a managerial revolution.  Through the military of which he was a member, he formed a secret group, the Bolivarian Revolutionary Movement, MBR-200.  His first attempt to take over the government failed in 1992 and he spent two years in jail.  He then formed the Movement of the Fifth Republic which eventually brought him to power in 1999.

His next move was to control the organs of power: parliament, judiciary, and police.  He went further and armed 120,000 civilian groups to defend the Revolution.  Spanish reporter David Berian describes the leftist propaganda that was painted on the walls of a village, 23 de Enero: pictures of Manuel Velez, the founder of FARC rebels in Colombia, ETA of Spain, Jesus Christ with a Kalashnikov, Last Supper with Bolivar, Che Guevara, and Fidel Castro. Similar country-wide rural groups, like La Piedrita, and Los Carapaicas, were formed.5

Professor Charles Muntaner6 and his colleagues have a long list of Chavez’s accomplishments.  After nationalising the oil industry, Chavez increased the expenditure on social services by 60.6% and the total expenditure amounted to $772 billion.  He reduced poverty from 70.8% of the population in 1996 to 21% in 2010.  About 20 million benefitted from his missiones program.  He increased expenditure on education to 6% of GDP: he virtually eliminated illiteracy; 72% of the age-group is in day care; 85% attend secondary school; ten new universities were built; and education is free from daycare to university.  Free food is offered in schools and food kitchens.  Fresh water is available to 96% of the population.  In 13 years of power, Chavez built 13,721 clinics from 5,081 he inherited. He also improved industrial and agricultural infrastructure. 

Muntaner feels that this Bolivarian Revolution will outlive Venezuela’s Socialist Leader.  Indeed it would, since a large segment of the poor and middle class benefitted from this anti-oligarchic policy.

But Chavez sowed the seeds of destruction.  By installing a command economy, which is being followed by his successor, Chavez left little room for adjustment to economic changes.  The private sector was virtually dismantled.  Scarcity of goods, reached 28% in January 2014.  Inflation for the previous year was 56%.7     The exchange rate was fixed at 6.30 bolivars to a dollar but the black market rate was 87 bolivars to a dollar.  In 2013, there were two devaluations in six months.8   People who had to stand in long lines were frustrated.

Chavez’s successor, Nicholás Maduro, although hand-picked and approved by Cuba, seems weak and unable to deal with the economic slide. 

Maduro cannot even live in the Presidential palace, La Casona or The Large House. The palace was built with public funds in the sixties during Raúl Leoni’s rule. Leoni kept an inventory of the antique furniture and priceless art it contained, but under Chavez inventories were not kept.  The Vice President Jorge Arreaza is married to Chavez’s daughter Rosa Virginia and they don’t seem to be leaving the palace.  Chavez’s other children, too, live there. Maduro is apparently living in a smaller house meant for the Vice President.9

Maduro’s career as a bus drive seems to be influencing his politics: he notes that Chavez has chalked out his route and he is just driving along it.  In regions that Maduro does not have control, he set up parallel officials who can overrule decisions he does not want.10

Maduro’s speech is steeped in ideological jargon:  he is conducting a “parasitic war” against the bourgeoisie who are allegedly hoarding goods.  Striking students are “golpistas” or “coup-mongers.”  His “colectivos” need to suppress them.  His opposition are “fascists.” 

Three independent political leaders, Leopoldo López, M.P. Maria Corina Machado, and Caracas Mayor Antonia Ledazma, therefore created an organisation, “Le Mesa de la Unidad (MUD).  Their proposal is called “La Salida” meaning “The Exit”: they want one of three scenarios, Maduro’s resignation, or a call for constitutional reform, or a Constitutional Assembly to write a new constitution.11

They are disgusted, as anyone would, that Venezuela had become the murder capital of the world.  In 2013, Venezuela had 24 thousand murders, including the death of Monica Spear, a popular soap-opera actress.12    During Chavez’s rule in 2009 there were 16,000 murders and 50,000 shootings.13   The wealthy have to live in gated communities or in houses with enormous security fences.

In foreign policy, Chavez and Maduro supported left- leaning countries.   Chavez had arranged a trade-off, oil for Cuban doctors.  Venezuela received 30,000 doctors in return for 115,000 barrels per day, which was equivalent to 40% of Cuban trade, and in money terms $2.7 billion per year to Havana.14   For the anniversary of Chavez’s death, the chief dignitaries were leftists, Cuba’s Raul Castro, Bolivia’s Evo Morales, and Nicaragua’s Daniel Ortega.

Chavez’s ideology led him to donate free heating oil to victims of Hurricane Katrina and Hurricane Rita, which destroyed vital fuel facilities.  This noble gesture was part of Chavez’s apparent eccentricity.

Chavez and his disciple Maduro changed Venezuela in five ways, notes Helman15: from being dependent on oil, it became extremely dependent on oil; a command economy meant expropriation and nationalisation of private businesses; the currency is in a mess; hyper-inflation; Venezuela has become the most violent country in the world.

Since Venezuela has 500 billion barrels of oil reserves it is not likely to declare bankruptcy, unlike Ukraine which has.  The latter has obtained $1 billion from the US, a promissory note of a $20 billion loan from Russia and financial assurances from the EU.

Moreover, foreign companies and China have worked out a way of doing business with Venezuela; they want payments in oil.

So, the major problem in Venezuela is financial management and observation of western values in government. Maduro would do well to heed Bolivar who said, “Flee the country where a lone man holds all the power. It is a nation of slaves,” and “if (human) nature is against us we shall fight nature.”  Those who had money or skills fled the Bolivarian Revolution, if they could.  Norway which has managed its oil wealth well should be a model for Venezuela.  Oil wealth should liberate a country, not turn its citizens to slaves.   

Bibliography 

1.      Laura Tillman & Nick Miroff, “In Chavez’s big shoes, Maduro stumbles,” ap.com, March 3, 2014.

2.      Editorial, “Unrest in Venezuela,” khaleejtimes.com, March 5, 2014.

3.      Gregory Wilpert, “Racism and Racial Divides in Venezuela.” venezuealaanalysis.com, January 21, 2014.

4.      “Simon Bolivar: biography” biography.com, no date, no author.

5.      Paula Delgado-Kling, “Chavez’s 120,000 Armed Civilian Guards,” talkingaboutcolombia.com, March 3, 2014.

6.      Charles Muntaner et al, “The Achievements of Hugo Chavez: an update on the Social Determinism of health in Venezuela,” venezuelaanalysis.com, December 20, 2012.

7.      Rubens Yanes, “What’s going on in Venezuela? Talkingaboutcolombia.com, February 21, 2014.

8.      Francisco Toro, “How Venezuela turns butter vendors into currency manipulators,” newrepublic.com, March 4, 2014.

9.      Wikipedia.org

10.   Yanes, op. cit.

11.   Ibid.

12.   12. Ibid.

13.   Paula-Delgado, op. cit.

14.   John Paul Rathbone et al, “Venezuela: In search of a solution,” ft.com, March 2, 2014.

15.   Christopher Helman, “Cheap gasoline: Why Venezuela is doomed to collapse,” forbes.com, February 20, 2014.

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