Author, Carlos J. Rangel

Translated from the original Spanish text by Magdalena Rangel and the author.

REMEMBERING WHAT MUST NOT BE FORGOTTEN

Venezuela has its heart on its chest and to the left. In a society with strong cultural collectivism the natural inclination is empathy for fellow countrymen’s suffering and to consider collective action as the way to resolve such suffering. Glancing at the pervasive levels of poverty in Venezuela, many Venezuelans have felt a moral obligation to be in solidarity with their peers of lesser means and searched for ways to relieve their social angst: community work, protest songs, sympathy to leftist ideologues, and a mask of disdain towards the achievements of capitalism while lending a sympathetic ear to the arguments of its failings. It is for these reasons that Venezuela has been such fertile ground for the sowing of its current socialist farce, an illusion that claims to offer to the dispossessed an ocean of happiness.

On December 17th,1982, under the historic “Samán de Güere” tree—the shade of which sheltered a young Simón Bolivar as he received lessons from his mentor Andrés Bello—a group of military conspirators, under the leadership of Hugo Chávez, took a secret oath to violate the Constitution, to overthrow the government, and to break their previous public oath as members of the Armed Forces, defenders of the Republic. The psychological rationalization behind this was a demagogic snare. The argument that the government had to be overthrown in order to save the Republic is a fallacy. It is the arrogant argument of anti-democrats against participatory democracy.

Without a doubt, Venezuela in the 1980’s was a boiling cauldron of political emotions: The Sierra Nevada Case; the inaugural speech of Luis Herrera Campins (“…and the debt’s elevators did not stop here!…”); the first ForEx controls: RECADI, reborn as CADIVI and now SICAD; the political rupture between Rafael Caldera and his political party COPEI (previously, Caldera was seen to be COPEI); the dropping of terrorism charges against Orlando Bosch with it’s consequent result of a diplomatic rupture with Cuba; the re-election of CAP (Carlos Andrés Pérez). It was also a time when Venezuela called itself “pretty,” with grandiose architectural projects, new urban developments, projects for new cities, large engineering accomplishments, new “toys” for the navy and the air force, and of course an endless stream of world class beauty queens, now displayed in full color on large new TVs.

The oil dynamics, public spending and unquenchable consumerism of these times created what at the time was presciently labeled by Moisés Naím and Ramon Piñango “An Illusion of Harmony”. It was the Saudi Venezuela to the umpteenth degree, with new millionaires, powerful “dauphins”and blatantly open corruption. The creation of the Misses industry is almost a metaphor of what that Venezuela was about. With makeup and cosmetic surgery the reality of what lay beneath was hidden: an artificial life style with a growing gap between the various social economic classes. But the illusion and the model to follow kept on strong: anyone can be a ‘Miss’ in the land of beauty, but beware, don’t you dare gain even half a pound and, please, do dye your hair for heaven’s sake, girl: The Pretty Venezuela.

We can’t fool ourselves with romantic notions of the past, longing for the good old days. The Venezuela of those days was corrupt, swarming with influence peddling and cronyism, long held traits of the Venezuelan, regularly trumping meritocracy with their most ubiquitous tool, the ‘lever’ (friend in high places) needed to help with personal goals or even basic needs. It was a Venezuela with a social pecking order that placed a great portion of the population, if not the majority of Venezuelans in the category of second or third class citizens. For the few who enjoyed the giveaways of this system, or who lived under the illusion that they soon would, this was a marvelous Venezuela. For the rest, …not so much.

Finally, the day of reckoning came. With the price of oil down, these Latin Pharaohs’ illusions broke the treasury. The economy-crowding state created a hard currency crisis with an impact that was felt all the way down to the store shelves, leading to scarcity and the harsh reality of economics. The answer to this problem from competent, politically naïve, and ultimately socially insensitive technocrats in CAP’s brand new second government was a shock to the system. Their solution was termed the ‘Paquetazo’ (a slang term for Hard Hitting Big Package), a set of well intentioned measures with the goal of rectifying the fiscal disaster. But they were applied too abruptly and with poor political tact. The idea was to create a structural change in the economy, to balance the accounts, and to create a solid base for a new path to more organic growth for the economy. A few weeks after the Presidential inauguration, the ‘Paquetazo’ was answered with the ‘Caracazo’ of February 1989. This was a massive popular uprising in the Venezuelan capital, Caracas, with its consequent toll of death and destruction. Ever since, economic measures of this kind became scornfully labeled ‘Savage Neoliberalism’. And now, the window of opportunity had opened for those conspirators from the Samán de Güere.

In such fertile terrain—the Venezuelan leftist leaning nature, the country deep in a pool of social discontent, and the ‘Caracazo’ hangover still lingering—in 1992 Hugo Chavez and his gang attempted two coups that created an even larger death toll than that from the ‘Caracazo’. The Uppsala Conflicts Data Program(UCDP), which keeps track of governmental or paramilitary violent acts all around the world estimates the death toll of the ‘Caracazo’ in the range of about 44 fatalities, reporting that there are also non confirmed numbers of up to 300 from this incident. In the coup d’états of February and November of 1992, 186 fatalities were confirmed and the estimates surpass 500.
(Headline of a newspaper of the day: “Girl Dies, hit by stray bullet from Coup while sleeping in her bed.”)

The ensuing and second government of Caldera (1994–1999) was characterized by a lack of real leadership and economic missteps of immense magnitude. The failure of the banking system accentuated the economic ills and brought about even more poverty and misery. The country was now tired of the model that had been presented by the old founders of the current democratic system, who wouldn’t allow new generations of leaders to come in with new blood and new ideas and which the country was not only clamoring but desperately needed.

Meanwhile Chávez maintained a presence with his “For Now” stance, a phrase for which he had become well known after using it on his way to jail for his Coup attempts. Once cleared in the name of pacification (all charges were dismissed and he and his fellow officers were reinstated in the armed forces by Caldera) he conspired once again to try to reach power by force. A rupture followed between Chávez and Francisco Arias Cárdenas (a fellow original conspirator), who did believe it was possible to reach the seats of power through popular elections. After Arias Cárdenas was elected Governor of the state of Zulia, and after some opinion polling, Chávez became convinced that he too could achieve his goals through the electoral process. CAP characterized that election cycle as a vote of popular revenge against the traditional parties and it did seal the final fate of those parties. Chavez, from his very first moment, initiated the antagonistic discourse of sectarian discord and contempt that would become the overall style and tone of his leadership, and set himself out to immediately reform the Constitution, his first and original goal from 1992.

Chávez is sworn into power on February 1999 (traditionally Inauguration had been Jan 23, in commemoration of the overthrow of the last Venezuela strongman, Marcos Pérez Jiménez on that date in 1958, but Chávez changes it to Feb 4th to commemorate his first coup attempt). In April he calls for a referendum to reform the constitution, which is approved with 88% of the votes. This result is indicative of the dissatisfaction the population has with the status quo and gives ‘carte blanche’ to Chávez, who in August, and with a majority to the tune of 95%, convokes a Constitutional Convention. This new body drafts a Constitution custom-tailored to his ideas, dissolving existing governmental bodies and ensuring the continuation of chavismo through open and hidden tools in this new document. By December 1999,Chavez has created the mechanisms with which he will be able to maintain and increase his power over Venezuelan society. And so begins the veil of deceit of Chávez and his chavismo.

THE FAILURES OF CHAVISMO

But chavismo has been a failure. Chavismo has not built a better country. The country is not better off now than when it was left by the mismanagement of Caldera. The results are visible and palpable, even when official numbers may be presented to try and contradict that reality. And one of the worse results of chavismo is is the total loss of trust in any official pronouncements about the condition of the country and the intentions of the government.

Social Leadership

Defining Social Leadership as that which seeks to improve the quality of life of the average citizen, it is possible to say that the results of chavismo are mixed. In matters of health, infant mortality—a common indicator of social welfare, and which is relentlessly propagandized by the government—has gone down. Another indicator less followed and touted is the post-natal maternal mortality, a possible indicator of the levels of quality of general medical care. Here, the results are less rosy.

Illiteracy has also gone down. The achievements of the country in this respect have been impressive. But it is difficult to argue that it has been singly the result of chavismo, because illiteracy was already on its way down even before, as can be easily verified from different indicators and sources.

Other indicators have not been so positive and are a reflection of the regime’s political agenda and its economic consequences. It is enough to look for now at the inflation adjusted Salary Index, which has fallen 41% from 1992, the time when the chavista impulse actually began, to 2012. Even arguing some stabilization in this index over the last few years, two points still stand out:1) From the moment the regime hardened its policies after the coup attempt against it in 2002, the index fell further, and 2) The promise of the regime was to improve the economic situation, not just maintain it where it was.

Regarding reduction of poverty and unemployment, this in actual fact has occurred in Venezuela, and somehow one can say that chavismo can be given credit for this. The main thing to be noted in this arena, however, is that its biggest achievement was to not reverse the trend already taking place in the region. In economies as diverse as Chile and Colombia, the results during the same period are comparable: between 2005 and 2011 poverty in Venezuela dropped by 22%, in Colombia it fell 33% and in Chile 21%. Unemployment has also gone down in equal measure in those countries.

Political Leadership

The political leadership of chavismo has amounted to a big failure because it has fractured the Venezuelan identity and weakened the social contract.

Without a doubt the most important function of politics is to help arrive at a consensus of goals and of the path to achieve those goals. In this sense, sound political leadership achieves solutions that satisfy some or most of the needs of its constituents and stakeholders, but does not satisfy any of them completely. That, at least, is what is expected of a representative democratic system in which the power resides in those being represented. By its own nature, democracy can always be improved and there are mechanisms such as proportional representation, primary elections and run off elections, which can allow for a better sense of the popular will. To protect against abuse of power, its division into various branches of regulation, action, and arbitration produce a certain amount of transparency that allows for public control through oversight of governmental activities: checks and balances.

Chávez’ case from Day One seeks autocratic power concentrated in the executive branch. His first actions were characterized by sowing divisions and the annulment of the opposition through demagoguery and the dismantling of democratic institutions.

In addition, Chávez’ public confrontational approach, his denigrating attitude and disdainful stance against those with opposing views created a sectarian environment both in the political arena and the social realm which has been poisoning the country ever since. Every person that lives in a country has a right to be respected as a valued member of society, and chavismo it seems, does not share this view on the matter.

This point is not to be taken lightly. The sectarian mentality inspired by chavismo is behind some of the more serious problems currently being faced, such as corruption and insecurity. When respect does not exist, and disrespectful action against others is constantly incited, when what belongs to the other is not perceived to be as valuable as that which is one’s own, the social contract crumbles.

Additionally, the chavista political discourse, in its enthusiastic populist zealotry, has created unachievable expectations which, once frustrated by harsh reality, engendered an even greater discontent and have become a seed for rebellion. There is no satisfactory transition possible at the moment—be it by a reversal of chavismo or any other governmental alternative—that is capable of satisfying the expectations created by the chavista discourse, expectations that will not go away overnight. But therein lies the task of the capable politician.

Economic Leadership

Venezuela’s economy is not prosperous. The chavismo process has squandered the historic opportunities arisen from the discoveries and extraction of the largest oil reserves in the Western Hemisphere and its unprecedented high prices. In spite of these favorable conditions, chavismo’s economic achievements are negligible, few, insufficient, and invisible. In other words: squalid.

There are some individuals that have prospered. Those playing the eternal Venezuelan game of “Move Over, it’s My Turn” have changed their economic situation to personal advantage. Some made their fortunes “fishing in troubled waters” and others have made it at the expense of public treasury. Documented cases of fortunes generated underchavismo include Aristóbulo Istúriz, with his bank account in Banque Paribas in the amount of US$9 million, Victor Vargas Irausquín, who recently bought a house in Palm Beach with a price tag of US$70 million, and Ricardo Fernández Berruecos, accumulating a fortune of US$1.6 billion since the year 2000. These socialist millionaires/government supporters may sometimes appear as if they are in some trouble or other, as part of their public image, as quick populist scapegoats, or perhaps because of actual financial differences with their contacts and influences.

But the biggest agent of economic disaster the country has been facing has been its very own government and its politics. The government has broken PDVSA (Petroleum of Venezuela), independent and private industries, and even other countries following its misguided ideological trail. The debt that the government holds with international airlines surpasses US$3 billion. Venezuelans buy their airline tickets in local currency, ‘bolivars’, and the Government is then supposed to reimburse the airlines in restricted dollars, but the government chronically defaults on these payments. Maduro’s recent decision to break relations with Panama takes on a different tone when it is revealed that Venezuela’s debt with Panama and Panamanian businesses nears US$2 billion.

It’s true that the government really has a scarcity of resources to repay these large debts. Its international reserves have been experiencing an alarming dwindling trend. Considering the prices of oil, and the current export levels it would appear to be hard to understand how this could be the case. But when one examines the drastic increase and high level of imports of all kinds, including foods and basic staples, one can easily see the balance of payments is in great disequilibrium. And the fault for this can be placed squarely at the foot of the government. In its eagerness to make all activities revolve around the State, production has been constantly diminishing, both in the agricultural and industrial sectors. The structural inefficiencies that now exist in these sectors combined with continued government decrees have destroyed the levels of industrial production needed to meet the expectations the very regime has created.

But the hard currency bloodletting does not end or exist solely because of the refurbishing of basic goods for the population. By far the largest currency generator the country has is its petroleum sector. It is here where state intervention has been most destructive.

The financial statements of PDVSA (Petroleum of Venezuela), point to the government as its biggest debtor. The Government of the Bolivarian Republic of Venezuela owed Petroleum of Venezuela the sum of US$22 billion at the close of 2012 (consolidated PDVSA fiscal figures for 2010, 2011, 2012, pg. 89), of which US$20.57 billion were for direct sales by the government to other countries with whom it has various cooperation and exchange agreements (ibid, pg 90, notes 7-cy, 7-d). In other words, the government is in the hole with PDVSA because of its eagerness to offer to other countries oil in exchange for ‘in kind’ services. The net earnings of PDVSA for the year 2012 were US$4.215 billion, which includes uncollected sales to the Venezuelan government for over US$22 billion. That, after paying royalties and taxes to the same government to the tune of another US$19.9billion.

To put this last fact in other words: PDVSA payed the government taxes it owed (almost 20 billion US$), and after this it stated earnings of a bit over US$4 billion. But that accounting number is not liquid currency because sales of more than US$22 billion are still uncollected. Therefore, PDVSA had a negative flow of at least US$18 billion in 2012. This is how you kill the goose that lays the golden eggs.

The economic impact of this is universal and impoverishes the entire country. It is distribution of poverty by the government. It is reflected in high rates of inflation, the natural market adjustment mechanism that occurs in unbalanced economies. When you combine the cost of goods with the currency exchange rate adjustments to figure out what the real rate of inflation is, the economic reality of Venezuela becomes clear, and the figures are staggering.

The entity that is mostly responsible for the state of economic ruin the country is facing, the largest currency embezzler of them all, has been in large measure the government itself.

Its economic policies have led the country to the edge of the abysmal financial edge of hyperinflation. And they want to move onward with these policies.

THE FUTURE: LEARNING FROM CHAVEZ

Venezuelan citizens have a weary heart and a patriotic pain. The current uprisings in the streets had their origins in frustrations created by chavismo itself, and as a consequence of its misguided policies. There is no doubt that inequalities in wealth and opportunity existed and need to be resolved. It is not an option to return to a Venezuela where one economic group designates another group to be its servant class, with no opportunities to improve their situation, and where it would even be considered quaint that they could entertain such dreams. It is not an option to return to a Venezuela that ignores the potential of its own people and with a leading class that simply seeks to rotate access to Ali-Baba’s loot, while a mountain of inequities blocks merit, talent and hard work.

Chávez pretended to listen to this clamor of inequality, and began his erratic journey through the land of totalitarian authoritarianism, masking it with a visage of modernity, calling it XXIst Century Socialism. He used a ‘clenched fist with a silk glove’ approach to alleviate Juan Bimba (Venezuelan colloquial equivalent to Joe Everyman) and the results are now clear for all to see: a sectarian country, a destroyed economy, and serious social malaise. There is no official number to appease hardships felt in every kitchen of every home. The chavismo hangover can be felt through all the cities, urban communities, barrios, and pueblos (provincial towns), in the country. So Jaimito (colloquial every boy) goes out to the streets to throwstones. And the blood shed is the blood of every Venezuelan: those who defend their bread muzzles, and those who demand their very future.

But I reiterate that those who think the solution is a return to the “Pretty Venezuela” they believed existed once upon a time are mistaken. It is possible that these current rebellions could help steer the country towards a better future. The Venezuelan is hard working and creative, when given a chance to be so. The civic works of the last era of progress are proof positive of that, not to mention the successful eradication of polio and malaria as well as cultural achievements recognized world over. And without a doubt, the Venezuelan is anxious to have a better future, especially young Venezuela. But this future is only possible when those who were and still are chavistas get a chance to talk about their own point of view, of the reasons that led them to become so attracted to the message of chavismo. And when it is understood why chavismo was so attractive to those masses of people who were dispossessed, and why they responded to the message of chavismo. Just as it is equally important that those who reject chavismo be given a chance to be heard and participate.

There is a possible future. A future of inclusive participation that rejects and sheds paternalist Caudillismo and grants to each of its citizens their quota of responsibility inside a democratic framework. A future that is prepared to invest in the country, in its infrastructure, in its people; not on some political misadventure. A future that looks to unite, instead of divide. Because we All Are Venezuela. This may be a time to remember why it is so important not to forget that old saying: “Those who do not know and learn from their past are condemned to repeat it.”

Carlos J. Rangel March 9th , 2014

Translated from the original Spanish text by Magdalena Rangel and the author.

(Previously posted in Spanish, on March 9th, 2014 – https://www.facebook.com/notes/carlos-j-rangel/con-el-coraz%C3%B3n-en-la-mano-ante-el-fracaso-del-chavismo/10153875578270417)