History is a cycle only if we refuse to learn from it.
Talk to almost any Venezuelan today and they will complain to you bitterly about the state of their country and the animosity they feel towards their current leader, Nicolas Maduro.
Who could blame them?
- Inflation is over 1 million percent.
- The average daily salary of a worker cannot purchase even two eggs.
- In the last 5 years GDP has contracted by 50%.
- The percentage of the population living in poverty is now over 90%.
- Hospitals are operating with less than half of the necessary resources and medications.
- Infant mortality is steadily increasing.
- Malaria, once eradicated in Venezuela, is back and hundreds of deaths have already been reported.
- Between 2015 and 2017, for children ages 3-24, the percentage enrolled in school dropped from 78% to 71%. (ENCOVI)
- The murder rate is one of the highest in the world at 81 per 100,000 (2018). That number was 89 in 2017.
- Thousands of people leave their home country everyday seeking refuge in neighbouring states.
This two-part post will look at Venezuelan society and the economy under the Puntofijismo system and the leadership of Carlos Andrés Pérez, Rafael Caldera and Hugo Chávez. Today’s segment will focus more on the controversial Chávez years.
Venezuela was once one of the wealthiest countries in the world. It sits atop one of the world’s largest proven oil reserves and for over a century, the South American nation has been able to live off of this black gold. In the post WWII period its wealth rivalled even that of the United States. In 1950, Venezuela was the world’s fourth largest economy and even in 1982 it was arguably the richest Latin American nation. So what happened?
Unsurprisingly the answer is chronic mismanagement and corruption from successive regimes. Added to that there is also spiralling foreign debt and the politicization of aid. Many would also blame Maduro’s predecessor, Hugo Chávez for the current state of the country. While there is almost unanimous castigation of Maduro, Chávez brings a more divided response. Let’s explore that for a bit.
In the early 2000s, just a few short years into his tenure as President, public opinion was already divided where Hugo Chávez was concerned. In those years I was a fresh faced university graduate and my first job was as an ESL teacher. Most of my students were from Venezuela. Lunch breaks often erupted into heated political debates between Chavistas and non-supporters of the regime. Yet, the opinion poll still swayed in favour of the enigmatic leader. Many students explained how much better off their families were under the (then) new administration. They talked about having access to tertiary education for the first time and being able to afford more than a subsistence living. Others, however, complained about how their family members had lost lucrative state enterprise jobs because they opposed the government. My small school was but a minuscule reflection of what was happening on the much larger Venezuelan political stage. This division would only worsen as the Chávez years progressed.
Let’s look at Hugo Chávez’s election in 1998. It was a free and fair democratic election that put him in power. Allegations of tampering would follow subsequent elections. That year, however, running on an anti-puntofijsmo, anti-poverty and anti-corruption platform, Chávez won 56% of the votes based on a 63% voter turnout. Both the margin of victory and turnout were high for Venezuelan politics of the time. Analyses of the election showed that Chávez’s support had come primarily from the country’s poor and “disenchanted middle class”, whose standard of living had decreased rapidly over the previous decade, while much of the middle and upper class vote went to Chavez’s closest opponent, Enrique Salas Römer (Hugo Chávez and the Bolivarian Revolution by Barry Cannon). In 2000 he won again with 59.7% of the vote and in 2004 with 59% of votes and 70% voter participation (Carter Center, 2004).
There were several factors that propelled Chavez into the presidency, including an implosion of the neoliberal economic model, but let’s first look at what Chavez promised:
- He portrayed himself as a saviour after 40 years of suffering under criminal politicians.
- Chávez promised a government of and for the people.
- He promised reforms to assist the poor, to enhance democracy, to share the oil wealth with the people, especially those who had never benefitted from it before.
Campaign rhetoric is one thing, what did Chávez actually deliver? We can look at some of the policies that were put in place during those first few years. The 1999 Constitution made clear the direction in which the government wanted to move. Included within the document were the following considerations:
- Civil rights: the freedom of expression, assembly, and political participation; and Social human rights: the right to employment, housing, and healthcare.
- Free and quality healthcare guaranteed to all Venezuelan citizens- at the expense of the State.
- State financing of political parties was eliminated.
- The government evaluated policies for discriminatory effects against women.
- Motherhood protected from the point of conception- guaranteeing pre-natal care. Family planning provided by the state but conversely abortion accessibility was made more difficult.
- Recognition of the indigenous population’s right to exist, to maintain their languages, cultures, and their territories. The state committed itself to help the indigenous communities demarcate their lands.
- System of Bolivarian Missions, Communal Councils and worker-managed cooperatives, as well as a program of land reform.
There were also more worrisome aspects to the constitution:
- Strengthen the role of the military and the President’s control over the military.
- The nationalization of several institutions in key industries: Oil, Gold, Steel, Agriculture and Finance.
Oil revenues afforded increased government funding in healthcare, food, infrastructure and education and made significant reductions in poverty. But there were no plans enacted to ensure the sustainability of this funding.
As you can see, some of the intentions were meant to address the needs of the poor, a significant percentage of the population, while others paved the way for a transition into a more authoritarian system of government. The social policies, however, did in fact have a remarkable impact on society. According to the UN ECLAC, Venezuela achieved the second highest rate of poverty reduction in the region where the percentage of the population living under the poverty line fell from 49.4% in 1999 to 27.8% in 2010. In 2012 that number fell again to 23.9%. On the negative side, inflation and violence increased.
This pictograph from The Guardian shows how many Human Development Indicators improved in Venezuela during the Chávez years. Even Chávez critics had to admit that his policies and programs had an overwhelmingly positive impact on the poor and gave opportunities to people who would never have had them otherwise.
Yet even before Maduro came into office, many of Chávez’s policies were having a detrimental effect of Venezuelan society and the economy:
- Venezuela became extremely dependent on oil. In 1998 oil represented 77 percent of Venezuela’s exports but by 2011 oil represented 96 percent of exports. No country should be so dependent on just one commodity. When oil prices were high, Venezuela was able to sustain economic deficiencies and stagnation in other areas but once the price of oil dropped there was no safety net to fall back on.
- More dependent on oil but the oil sector was less productive. In 2000 crude oil production was at 2.9 MM barrel/day; by 2012 production stood at 2.4 MM barrel/day. The number has been below 2.0 since 2017. (CSIS)
- Expropriations and nationalizations scared off foreign investors and crippled private businesses and industry. The number of private companies in industry had dropped from 14,000 in 1998 to 9,000 in 2011 to 3,800 by 2017 (ABC News, CSIS). Less businesses engaged in efficient and profitable production led to an increase in the import bill.
- The Venezuelan Bolivar Fuerte was not managed properly and inflation was spiralling even in the Chávez era. The currency was launched in 2008 and had lost nearly two-thirds of its value by 2012. Inflation in Venezuela averaged 23 percent during 1999-2011. Price controls further frustrated the daily lives of citizens and shortages resulted in the creation of a vibrant black market. Everyday items such as milk, cooking oil and sugar were difficult to obtain.
- Venezuela’s rate of violence skyrocketed. Homicide rates have been on an upward trend since 1999.
Additionally, while millions of previously disadvantaged citizens welcomed the new policies which resulted in a better quality of life for themselves, the government’s methods and policies were harshly criticised by sectors of society that found themselves out of favour.
Helping the poor came at the expense of Venezuela’s middle class. Chávez even labelled them as “los esqualidos“, the weak ones. The division of the classes and polarization of Venezuelan society was exacerbated tremendously.
**Society divided: Scores of thousands of people rallying behind their political parties of choice. (Chavistas usually wear red). **
The reason I wanted to point out some of the positives of the Chávez regime earlier, is not to be an apologist for it, there is, in fact, much to criticize. However, we must understand how his regime benefited a wide cross-section of Venezuelan people because these are the millions who voted for him again and again. And some of them continued their support even for a leader like Maduro simply because he was favoured by Chávez. Despite living daily hardships, some supporters of the Maduro administration continue to believe in their party and the aims of the Chávez inspired Bolivarian Revolution. Their numbers are dropping fast but they still show up at rallies. Read this article printed by The Guardian in February for more info.
Why do some remain loyal to the aspirations of the Bolivarian Revolution, even now when it is failing? We’ll discuss that in the next segment.