Rough Seas for Venezuela
At the University of Havana in 1999, President Hugo Chávez assailed those who would “ask Cuba to follow the path of false democracy” and declared that Venezuela was “moving toward the same ocean as the Cuban people, an ocean of happiness, of true social justice, of peace.” But the recent steep plunge in oil prices has thrown both Cuba and the Venezuela that supplies its oil into a much more turbulent ocean than Mr. Chávez ever imagined.
To emulate Cuba politically was an inexcusable choice, but Mr. Chávez began carefully to do so. In order to distance Venezuela from “false democracy,” he accumulated control over the organs of government and over much of the information media: radio, television and the press. His successor, Nicolás Maduro, has remained on that road but much more crudely —with little attention to nuance or pragmatic pressures. He took over the rest of Venezuelan television, confronted protesting students with arrests and gunfire (many were killed), and suppressed demonstrations by the opposition while imprisoning the militant leader Leopoldo López.
On the other hand, it did make sense at the time to emulate Cuba’s successful record of social justice. And so starting in 2003, with the approval of Fidel Castro, Mr. Chávez instituted the Missions, staffed with Cuban personnel who —through medical care, education and home construction— bettered the lives of many Venezuelans. But the cost of the program was exorbitant.
Venezuela absorbs 45 percent of Cuba’s trade deficit. Chávez-era economic agreements with Cuba were all highly favorable to the island nation. The expenses for the Missions (consisting of 40,000 Cubans, especially doctors and nurses) involved Venezuelan payments of about $5.5 billion annually, of which the Cuban regime retained 95 percent, the rest going toward paying the doctors (though thousands have defected to other countries in recent years). Oil was supplied at such low prices that Cuba could turn around and refine and export some of it at a profit.
Economic ties with Cuba were only one element in Venezuela’s care-free use of oil profits for political purposes. But in early 2008 the price of a barrel of oil stood at $145 (and the Venezuelan government believed that it could rise as high as $250). Venezuelan aid to Cuba seemed merely one large drop within the projected “ocean of happiness.” In a display of economic machismo, Mr. Chávez accelerated his policy of expropriations and nationalizations, without apparently taking stock of the fact that Raúl Castro had begun market reforms that were lessening the direct role of the state and opening some space for the free market. This was completely contrary to the statist model that Mr. Chávez was expanding in his country.
But now, just as Venezuela limps through the crisis of a shortage of basic supplies, the price of oil has fallen to less than $50 a barrel. The average Venezuelan is mainly worried about being able to buy food and medicine. Supermarket shelves are nearly empty; lines of shoppers wind around corners. The army has been instructed to arrest anyone who breaks ranks or obtains even so much as a chicken more than his formal allotment, and they are legally permitted to fire on demonstrators.
Mr. Maduro’s government insists that the crisis is an “economic war” conducted by the right and refuses to alter the nation’s currency controls, which favor a black market with its traders who purchase price-controlled products at low prices and resell them at a big profit.
After a worldwide trip to Russia, China, Iran and some Arab states seeking economic aid, Mr. Maduro simply announced to all: “God will provide.” The humorist Laureano Márquez (who belongs to the Venezuelan opposition) produced a widely read public letter purportedly from “God” in which He says: “I already provided you with fertile farmland, plains for the raising of cattle, forest tracts where you can grow cacao and coffee, major navigable rivers, beaches for tourism. ... Underground I gave you the largest oil reserves in the planet and ... gold, aluminum, bauxite, diamonds ... 15 years of the greatest oil bonanza in the history of humanity ... ”
Further, Mr. Márquez’s “God” cannot comprehend how the Chavistas have managed to ruin Venezuela’s economy. Such is the divine personage’s concern that He ends the letter with: “I’m sorry, my child. I have to tell you that your request for heavenly financing has also failed.”
Since the early years of Cuba’s revolutionary regime, Fidel Castro hungered for access to Venezuela’s oil, which President Rómulo Betancourt denied to him in early 1959 after an acrimonious meeting in Caracas. The Cubans responded by sponsoring unsuccessful guerrilla incursions into Venezuela, and diplomatic ties were severed for years. Then, in 1998, Hugo Chávez —a great admirer of Fidel and the Cuban system— was elected president. The new leader in Caracas moved quickly to help the Cubans, whose economy had fallen into dire straits after Russian subsidies had come to an end by 1992. Beginning in 2003, Venezuela flooded Cuba with oil at bargain prices.
Today, however, the crash in oil prices has devastated Venezuela’s troubled economy, which was already deeply undermined by a hugely corrupt and spendthrift administration. Caracas cannot continue liberally dispensing oil to Cuba and other Latin American countries favored by Chavismo. And Mr. Maduro lacks the charisma and political agility of his predecessor.
The two countries are now caught in an ocean not of “happiness” but of contrary currents and dangerous waves. Parliamentary elections due at the end of this year will probably be the turning point for Venezuela. Polls show the Maduro government has only a 22 percent approval rating; that figure is unlikely to go up between now and the vote.
If control of Congress were to shift from the Chavistas to the opposition, Venezuela could begin a process of national reconciliation, open up to the free market and establish democratic normality. This would be the best possible medicine for the country’s battered economy and damaged social institutions. But if such changes don’t come peacefully, then the outlook for Venezuela may well be even grimmer.
This article was translated by Hank Heifetz from the Spanish.
The International New York Times