Venezuela Is Falling off the Map

Venezuela Is Falling off the Map

Phil Gunson

Senior Analyst, Andes

International Crisis Group

Incoming U.S. President Donald Trump’s first foreign-policy surprise could pop up just a few hours’ flying time south of Miami. A tense political standoff between an increasingly desperate population and a dictatorial regime in Venezuela worsened in early January after the opposition-led parliament withdrew recognition from President Nicolás Maduro, who is ruling by decree. Talks between the government and opposition have broken down, and the regime is throwing yet more opposition leaders in jail and threatening to close down the legislature.

This week, the government began issuing bigger bank notes in response to hyperinflation – however even the largest of these, the 20,000-bolívar note, is worth only about US$5.30 on the black market. Many Venezuelans have to carry around stacks of cash for basic transactions.

People have been shouting about disaster in Venezuela for so long, it is difficult to know when the sky is actually falling. However, if the country continues to degenerate into a failed state, it will have serious implications for the region – including the spread of organised crime, uncontrolled epidemics and mass migration.

The crisis has been years in the making. Yet as recently as 2011, Venezuela had the second-highest per-capita GDP in Latin America. A decade-long oil boom, which ended in 2014, saw around US$1 trillion pass through the hands of its avowedly socialist government. As much as a quarter of that may simply have been stolen. Most of the rest was either given away to allied regimes or squandered on white elephants, populist programs and handouts with, at best, short-term impact.

Today, Venezuela is one the poorest countries in the region. Its economy may have shrunk by as much as 18 per cent in 2016 alone. Annual inflation, which the government has not even reported for the past year, is heading for four figures.

The consequences are stark. As many as one in twelve of its citizens admits to searching for food in the garbage. Public services, including hospitals, are collapsing and even basic antibiotics and blood-pressure pills are unavailable. As if that were not enough, violent crime kills over 20,000 people a year in this country of 30 million, and whole swathes of the countryside are effectively under the control of organised crime, often with the complicity of security forces.

I have been living in, and reporting on, Venezuela since Hugo Chávez came to power in 1999 and set about dismantling representative democracy, for which he had a deep disdain. A two-party system established after the end of the last dictatorship in 1958 had already crumbled. Poverty, inequality and corruption were rife. The former army officer, who had attempted a coup in 1992, went on to win election after election on a promise to put things right through “participatory democracy”. But today they are immeasurably worse for most Venezuelans. Many friends, especially young professionals, have left. A diaspora, estimated at a million-and-a-half people, is scattered across the globe. Almost everyone I know has been a victim of violent crime. Some friends and acquaintances have been kidnapped or murdered. Few people go out at night. Daily life is plagued by blackouts, water-shortages, bread queues and the nagging fear of being unable to get treatment if a family member falls ill.

Venezuela is falling off the map. Seven international airlines have pulled out altogether because of exchange controls, others have slashed flights and most tickets must now be paid in dollars. It’s virtually impossible to make an overseas call, except by internet. And the internet is among the slowest in the world. Just to pay its foreign debt the government is having to sell off or pawn state assets, and has cut imports by more than two-thirds.

Maduro blames the country’s woes on an “economic war” waged by his opponents, in collusion with the U.S. But independent economists have warned for years of the consequences of government profligacy, corruption and rigid price and exchange controls. A year ago, a disillusioned electorate handed control of the National Assembly – the country’s legislature – to the opposition Democratic Unity (MUD) alliance. But the Maduro government used its control of the Supreme Court to simply annul parliament’s constitutional powers. The electoral authority, also in the hands of the ruling United Socialist Party of Venezuela (PSUV), has blocked an opposition attempt to trigger a recall referendum against Maduro – which would have been a democratic, constitutional solution.

Vatican-led talks, initiated in late October, broke down almost at once after the government reneged on commitments to free political prisoners, agree an electoral timetable, restore the powers of parliament and allow in humanitarian aid. When Vatican secretary-of-state Pietro Parolin demanded that Maduro keep his word, the government accused him of overstepping the terms of the Pope’s facilitation mission.

Venezuelans know they have to fix their own problems. But the region – and that includes the U.S. – needs to hold the Maduro government to its international commitments on democracy and human rights. Without a transition back to the rule of law, mediated by outsiders, the country is headed for collapse. Venezuela’s neighbours must provide greater support, as well as serious pressure, to find a solution to the crisis. The government shows no sign of being interested in genuine negotiations, but the region can no longer afford to look the other way.

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