Venezuela In Crisis: What Does The Future Hold?

Kodi Dolson

Kodi Dolson

Student at the New School for Social Research, Manhattan, NY.
27 years old.

Social Justice.
Class Struggle.
Kodi Dolson

What we are witnessing in Venezuela right now is the slow and agonizing death of Bolivarian socialism. This is a sad fact because it brings an end the great social progress that has been brought in the past 17 years. Nicolas Maduro has, in an attempt to strengthen his own power, begun to use repression on a massive scale. A social revolution cannot be made when there is a dictator trying to hold the grip of power. The time is now right for Maduro to step down and allow the people to move forward.

To understand the roots of this failure, we must return to the 20th of October, 2012. This is the date of Hugo Chavez’s last national speech. This wasn’t a self-praising speech, talking about how great he had run the country.

On the contrary, it was a public grilling of the ministers on why many of the more important social reforms had yet to come into being. What the prime subject was was the state of the communes. The national commune system was intended for the people to take power on the grassroots level. Democratic practices within these communes would determine production and development.

It was the hope that through this sort of development that it would be these democratic communes leading the way for future advancement. Achieving a grassroots democracy, and giving the power directly to the people was Chavez’s goal. Creating a localized, democratic socialism. Democratic planning would thus replace the centralized state, top down planning that has traditionally been the practice of socialist states. (Strike at the Helm. 2012.) In the speech, Chavez is recognizing his failure of providing this to his people and trying to give an explanation as to why.

But Chavez isn’t without blame in this catastrophe. Many of the current issues can be linked to his failures as a leader. In the years that followed him coming to power, the rising price of oil allowed him to increasingly provide large funding towards social programs. From 2004 onwards, the price sees drastic increases. 2004 the price was 36.05 (US Dollars), by the next year it has gone up to 50.59$ and continued to rise until 2008 when it topped out at 94.10$. Then it saw a one year drop, but following this, it kept climbing to new heights. Finally hitting a high point of 109.45$ in 2012. (OPEC Oil Prices. 2017.)

Now, it is not a stable market to base the economy on, and the best thing that Chavez could have done was to use the oil revenue to build more sustainable and profitable industries that would ensure a diversified economy in the future. This wasn’t done, and thus social welfare was only insured for the short term, as long as oil prices stayed high. Many of the problems now being faced in Venezuela could have been minimized or avoided had a different path been taken.

But let’s not overlook the incredible progress that Chavez brought about for the Venezuelan people. At the time that Chavez was elected President in 1999, the poverty rate stood at 50%, and by 2012 it had dropped to just 31.9%. In the same period, extreme poverty dropped from 20% to 8.6%. Enrollment in secondary education jumped from 44.8% of the eligible population, all the way to 73.3% in 2012. Between 1999 and 2012, the number of university graduates jumped from 750,000 to 2.3 million. Child malnutrition during this period dropped during this period from 7.7% to just 2.9%. (Venezuelan Economic and Social Performance Under Hugo Chavez. 2013.)

By the end of Chavez life, 96% of the country’s residents had access to clean water, and UNESCO has attested to the fact that illiteracy had been eliminated. (Achievements of Hugo Chavez. 2012.) As was pointed out by Al Jazeera in June of 2012, “The government also introduced universal healthcare in 1999, increasing the number of doctors twelvefold while constructing several thousand additional health centres. Infant mortality has dropped and life expectancy has increased.” (Are Venezuelans better off under Chavez? 2012.)

Chavez and Maduro with Bolivar looking on.

These great social advancements were made in an international environment hostile to Chavez’s plans. Prior to Chavez election, the neoliberal variety of global capitalism was wreaking havoc on the working classes of Latin America. An embrace of free-markets, privatizations, and severe cuts to social spending left the people without anything to fall back upon.

It was in response to these realities that Hugo Chavez was elected President. He was the champion of those who were hit the hardest by neoliberal reforms and promised to take steps to help them achieve economic security. The anti neoliberal policies he was putting into effect (social insurance, universal healthcare, etc) made him the scourge of the capitalist world. An attempted coup in 2002 intended to rid the country of Chavez was later proven to have involved western planners. (Venezuela Coup Linked to Bush Team. 2002.)

The threat was that the model Venezuela was putting into practice would spread throughout the region, and that the global markets would begin shrinking. Because Chavez was so threatening to the world economic order, he had to demonized as a dictator, a tyrant, a totalitarian, and a madman.

By the time that Chavez passed away, the oil price was dropping and foreign debt was mounting up. This should never be forgotten in thinking about the current state of the nation. However, the governance of Nicolas Maduro has not helped the situation. Currency printing has been one of the remedies that Maduro has employed but with little success. This has been happening since coming to the Presidency, but this year it has been accelerated.

The reason for increased currency is to get more economic activity flowing, but the drawback is that it leads to hyperinflation. Inflation can most easily be described as too much money and not enough goods to spend it on. Money devalues itself and goods rise in price. Between 2016 and 2017, the amount of currency increased by 200% and this is the biggest increase ever recorded. (Venezuela money supply up 200 percent in year, fastest rise on record. 2017.)

As was reported in Foreign Policy Magazine, “Venezuela already is dealing with massive shortages as a result of its controlled prices, because the government can no longer afford its own subsidies. But it will get worse from here. Maduro seems intent on printing money like crazy, so the next step will be hyperinflation. Inflation is already believed to have reached 700 percent a year, and it is heading toward official hyperinflation, that is, an inflation rate of at least 50 percent a month.” (Venezuela Is Heading for a Soviet-Style Collapse. 2017.) All of this has created an increasingly harder existence for the population of Venezuela, who are now finding store shelves empty and an increasingly brutal level of state repression.

Maduro’s response to these deep economic problems has been to grab more power for himself. He has become the dictator that the West once claimed Chavez was. Consolidation of power into his own hands has not helped stabilize the situation. But there is another side of this story, the elites have been engaging in both hoarding goods in factories and stores boycotting necessities to create shortages.

While this is an important angle of the story that seems to be left out of most accounts, (well highlighted in Pasqualina Curcio Curcio’s The Visible Hand of the Market: Economic Warfare in Venezuela) but regardless, the truth is that the country is in a dire economic situation and Maduro’s power grabs are not helping the people. The time has come to realize that he cannot last through this crisis, and the only possibility for the left at this point is handing it over to the masses. The longer that Maduro stays in power, the worst the situation for the Venezuelan left has of even staying legitimate. He is standing in the way of progress and thus must step aside. The sooner, the better.

Facebook Comments

Write a Comment