The fiasco in Venezuela


This New York Times photo is of an emergency operating room in a Venezuelan hospital.

It’s a symbol of the country’s reckless mismanagement, rampant corruption and crime.

Despite having the world’s largest oil reserves, Venezuela’s socialist government has allowed it to disintegrate into a basket case.

In a long but revealing article in the New Yorker, William Finnegan describes the shambles that a government desperate to cling to power has created.

Some excerpts from the article:

  • Venezuela has, by various measures, the world’s highest violent-crime rate. Less than two per cent of reported crimes are prosecuted.
  • In 1961, Venezuela was the first country declared free of malaria. Now its robust malaria-­prevention program has collapsed, and there are more than a hundred thousand cases of malaria yearly. Other diseases and ailments long vanquished have also returned—malnutrition, diphtheria, plague. The government releases few statistics, but it is estimated that one out of every three patients admitted to a public hospital today dies there. State mental hospitals, lacking both food and medications, have been reduced to putting emaciated, untreated patients out on the streets.
  • [Hugo] Chávez was a telegenic populist with a gift for electioneering. He mesmerized the country with his Sunday TV show, “Hello, President!,” on which he railed for hours on end against his opponents, particularly the country’s traditional business élites and imperialist Washington, told jokes and stories, sang, extolled the achievements of his Bolivarian Revolution, and issued decrees, some of them consequential—the expropriation of a factory, the consignment of ten military battalions to the Colombian border. He even took to TV to order the jailing of a judge who had released a hated enemy. (In the case of the judge, the enemy was a banker who had been in jail awaiting trial for three years, which was longer than the law allowed, and the judge herself then spent three and a half years in jail—where her lawyer says she was raped—and under house arrest. Although she has never been tried, she is still forbidden to speak to the press or leave Venezuela.)
  • Cops and soldiers, militares, were notoriously underpaid. There was money to be made here. We talked to other families camped on the walkway, and on concrete benches under an awning closer to the hospital buildings. Some people were surprisingly outspoken. They denounced the prices charged for examinations (in a system of supposedly free health care), the corruption, the intimidation, the outrageous prices for sterile gauze, saline, food (when there was food), and medications. Some militares had the nerve to accuse the families of profiteering, and to seize their hard-won supplies when they tried to enter the hospital. These were items that, often, they had bought from other militares, who had looted them from pharmacies, or from shipments meant for hospitals. The worst actors were the colectivos, gangs of barrio toughs armed by the government and deputized as “defenders of the revolution.” Their main activity, as runaway inflation and food rationing gripped the country, was shaking down and monitoring their neighborhoods, but they found opportunities around hospitals and seemingly answered to no one. (Some colectivos could trace their descent to urban guerrillas from the sixties who had never disarmed.)
  • The mayor of El Hatillo, David Smolansky, said that violent crime—what everyone in Venezuela calls la inseguridad—is deliberate policy…  The government was jailing opposition leaders in advance of a planned protest march, and Smolansky had calculated, probably rightly, that he might be next. He is a hulking thirty-one-year-old, with a full beard and watchful eyes. Impunity, he said, made it difficult to fight crime even on the local level. In the first seven months of the year, he said, his municipal police had arrested a hundred and eleven suspects. Eighty-eight of them had been released without charges by corrupt judges. “The government knows it’s probably going to need those gangs to maintain power.” He had fired dozens of cops for corruption and misbehavior. A house robbery had been caught on video surveillance. They were able to positively identify six robbers. All six were cops, and not one of them was in jail today.
  • It’s understandable that angry Venezuelans talk about “the dictatorship.” Their rights are under siege. But real dictatorships impose order. Hugo Chávez worshipped at the feet of Fidel, who would not tolerate one-tenth of the disorder, street crime, and gun violence that plague Venezuela. To be fair, crime was already rampant when Chávez came to power, and people hoped that, as a military man, he would be able to rein in the malandros. But Chávez showed little interest in law enforcement. He even objected to the idea of a professional police force. That would be a “police of the bourgeois state.” Crime was a result of poverty, inequality, and capitalism. Today, researchers estimate that the annual number of homicides is as high as ninety per hundred thousand people. The government says it is only fifty-eight per hundred thousand. Whatever. In 1984, the number was between eight and ten.
  • Venezuela has, by some measures, the world’s worst-performing economy. It suffers from the world’s highest inflation rate—nearly a hundred and eighty per cent last year, with projections for this year as high as seven hundred per cent, according to the International Monetary Fund. Meanwhile, the economy as a whole shrank by nearly six per cent last year, and is expected to shrink by between eight and ten per cent this year. Price controls on staple goods, meant to keep those goods affordable and constrain inflation, have instead helped cause critical shortages. Currency controls—established by Chávez in 2003, in an effort to stop capital flight—fix the exchange rate of the bolivar, which is accepted nowhere outside Venezuela, and create a roaring black market for dollars. A dollar is worth about sixteen hundred bolivares at the moment. The official exchange rate for importing essential goods is ten. Between those two figures, the space for financial mischief is effectively immeasurable. The government just keeps printing money, with no relationship to production, helping to fuel ruinous inflation.
  • In the late nineteen-seventies, Venezuela was the richest country per capita in South America. The Concorde was flying weekly from Paris to Caracas.
  • Chávez promised to stop the looting, and he did eventually direct a much higher percentage of oil rents to housing, education, and health care for the poor. He cut the poverty rate, which was spiking before he took office, nearly in half. Like many of his predecessors, Chávez understood the need for reducing the country’s dependence on oil, and yet the opposite occurred. He deepened the state’s control of the oil industry and seized private businesses, factories, and large commercial farms. The new management of these enterprises was rarely able to keep them alive. Overgrown fields, shuttered factories, empty warehouses, and abandoned infrastructure projects litter the landscape today. Non-oil exports fell steadily as the productive economy hollowed out.
  • Repression increased markedly after the death of Chávez, an escalation often attributed to a consolidation of power by hard-liners in the government. The circus-tent populism of Chávez gave way to an even less accountable, charmless tropical Leninism. And yet ideology seems increasingly irrelevant to a true description of power in Venezuela. The regime seems to be in survival mode. In late October, Maduro and his allies on the election commission, recognizing that elections have become unwinnable, suspended the recall process indefinitely. The opposition staged angry protests throughout the country, and called for a general strike. The government threatened to expropriate businesses and factories that closed in support of the strike, and underlined the threat by surrounding Polar’s headquarters in Caracas and the home of Lorenzo Mendoza and his family with heavily armed SEBIN agents. The strike fizzled.