[Hac-announce] Fwd: Venezuela’s Suicide
Manny Sholem Ratafia
manny at ratafias.com
Mon Nov 10 12:09:23 EST 2025
The item from Foreign Affairs magazine recently came in. At the end of
this e-mail, I have pasted in the article on Venezuela's collapse
referred to in the Foreign Affairs e-mail. It's not a short article, but
you may want to skim it, and some of you may want to read the whole
article.
I look forward to seeing some of you next Monday at the HAC Monthly
Meeting/Timely Topics/pot luck dinner meeting:
*Monthly Meeting & Timely Topics - Venezuela and the curse of its oil
*(https://www.meetup.com/cthumanist/events/311754193/?eventOrigin=group_upcoming_events
)
Manny
-------- Forwarded Message --------
Subject: Venezuela’s Suicide
Date: Sat, 8 Nov 2025 07:01:01 -0500 (EST)
From: Dan Kurtz-Phelan <news at foreignaffairs.com>
To: manny at ratafias.com
Foreign Affairs Editor’s Spotlight
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cDovL2ZvcmVpZ25hZmZhaXJzLmNvbT91dG1fbWVkaXVtPW5ld3NsZXR0ZXJzJnV0bV9zb3VyY2U9ZWRpdG9yc19zcG90bGlnaHQmdXRtX2NhbXBhaWduPSZ1dG1fY29udGVudD0yMDI1MTEwOCZ1dG1fdGVybT1O/5d6fa6f3bf00812b9f4a470eBe6da38cf>
Foreign Affairs Editor's Picks
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eB7e4d6b8a>
November 8, 2025 *| *View in Browser
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Sponsored by Oxford University Press
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eB3212737e>
Good morning,
What drives a country to the point where many of its citizens “fantasize
about a Trump-led military intervention”? That’s the question Moisés
Naím and Francisco Toro took on in a sweeping 2018 essay
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eC7e4d6b8a>
that I’ve returned to again and again over the years. Naím and Toro
trace Venezuela’s descent from a prosperous, democratic, U.S.-aligned
country in the 1970s to an impoverished dictatorship a few decades
later—and conclude with a warning that is newly pertinent as the United
States builds up its military forces in the Caribbean. A potential U.S.
invasion, they write, “amounts to an ill-advised revenge fantasy, not a
serious strategy.”
Until next week,
*Dan Kurtz-Phelan*
Editor, /Foreign Affairs/
*Dan Kurtz-Phelan*
Editor, /Foreign Affairs/
Venezuela’s Suicide
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eD7e4d6b8a>
Lessons From a Failed State
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eE7e4d6b8a>
By Moisés Naím and Francisco Toro
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eF7e4d6b8a>
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eG7e4d6b8a>
Venezuela’s Suicide
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eH7e4d6b8a>
Lessons From a Failed State
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eI7e4d6b8a>
By Moisés Naím and Francisco Toro
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly93d3cuZm9yZWlnbmFmZmFpcnMuY29tL3NvdXRoLWFtZXJpY2EvdmVuZXp1ZWxhcy1zdWljaWRlP3V0bV9tZWRpdW09bmV3c2xldHRlcnMmdXRtX3NvdXJjZT1lZGl0b3JzX3Nwb3RsaWdodCZ1dG1fY2FtcGFpZ249JnV0bV9jb250ZW50PTIwMjUxMTA4JnV0bV90ZXJtPU4/5d6fa6f3bf00812b9f4a470eJ7e4d6b8a>
*El Generalisimo: A Biography of Francisco Franco by Giles Tremlett*
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eC3212737e>
The first full biography to examine both Francisco Franco’s life and the
enduring legacy of Francoism. Drawing on new research and uncensored
sources, Giles Tremlett offers a penetrating study of how Franco seized
power, sustained authoritarian rule, and shaped Spain’s modern political
identity.
Learn More →
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eD3212737e>
Cover of
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eF3212737e>
*El Generalisimo: A Biography of Francisco Franco by Giles Tremlett*
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eG3212737e>
Cover of
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eH3212737e>
The first full biography to examine both Francisco Franco’s life and the
enduring legacy of Francoism. Drawing on new research and uncensored
sources, Giles Tremlett offers a penetrating study of how Franco seized
power, sustained authoritarian rule, and shaped Spain’s modern political
identity.
Learn More →
<https://link.foreignaffairs.com/click/42421142.117501/aHR0cHM6Ly9nbG9iYWwub3VwLmNvbS9hY2FkZW1pYy9wcm9kdWN0L2VsLWdlbmVyYWxpc2ltby05NzgwMTk3ODMyMzE4P3V0bV9jYW1wYWlnbj04Njk5eXg2dTEtODY5OXl4NzQ3LVRuLUdmLUZkLUNyLUFlJnV0bV9zb3VyY2U9dGhpcmQlMjBwYXJ0eSZ1dG1fbWVkaXVtPXJlZmVycmFsJnV0bV9jb250ZW50PXdlYiUyMGJhbm5lciUyMGxpbmsmdXRtX3Rlcm09Zm9yZWlnbiUyMGFmZmFpcnM/5d6fa6f3bf00812b9f4a470eI3212737e>
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https://www.foreignaffairs.com/south-america/venezuelas-suicide?utm_medium=newsletters&utm_source=editors_spotlight&utm_campaign=&utm_content=20251108&utm_term=N
Venezuela’s Suicide
Lessons From a Failed State
Moisés Naím <https://www.foreignaffairs.com/authors/mois-s-na-m>
and Francisco Toro
<https://www.foreignaffairs.com/authors/francisco-toro>
November/December 2018 <https://www.foreignaffairs.com/issues/2018/97/6>
Published on October 15, 2018
MOISÉS NAÍM is a Distinguished Fellow at the Carnegie Endowment for
International Peace, Chief International Columnist for El País, and a
Contributing Editor at The Atlantic.
FRANCISCO TORO is Chief Content Officer at the Group of Fifty, Founder
of Caracas Chronicles, and a Global Opinion Columnist at The Washington
Post.
Consider two Latin American countries. The first is one of the region’s
oldest and strongest democracies. It boasts a stronger social safety net
than any of its neighbors and is making progress on its promise to
deliver free health care and higher education to all its citizens. It is
a model of social mobility and a magnet for immigrants from across Latin
America and Europe. The press is free, and the political system is open;
opposing parties compete fiercely in elections and regularly alternate
power peacefully. It sidestepped the wave of military juntas that mired
some Latin American countries in dictatorship. Thanks to a long
political alliance and deep trade and investment ties with the United
States, it serves as the Latin American headquarters for a slew of
multinational corporations. It has the best infrastructure in South
America. It is still unmistakably a developing country, with its share
of corruption, injustice, and dysfunction, but it is well ahead of other
poor countries by almost any measure.
The second country is one of Latin America’s most impoverished nations
and its newest dictatorship
<https://www.foreignaffairs.com/articles/venezuela/2016-11-01/final-blow-venezuelas-democracy>.
Its schools lie half deserted. The health system has been devastated by
decades of underinvestment, corruption, and neglect; long-vanquished
diseases, such as malaria and measles, have returned. Only a tiny elite
can afford enough to eat. An epidemic of violence has made it one of the
most murderous countries in the world. It is the source of Latin
America’s largest refugee migration in a generation
<https://www.washingtonpost.com/world/2018/08/23/venezuelas-refugee-exodus-is-biggest-crisis-hemisphere/?utm_term=.37c26252e50a>,
with millions of citizens fleeing in the last few years alone. Hardly
anyone (aside from other autocratic governments) recognizes its sham
elections, and the small portion of the media not under direct state
control still follows the official line for fear of reprisals. By the
end of 2018, its economy will have shrunk by about half in the last five
years. It is a major cocaine-trafficking hub
<https://www.insightcrime.org/investigations/drug-trafficking-venezuelan-regime-cartel-of-the-sun/>,
and key power brokers in its political elite have been indicted in the
United States on drug charges. Prices double every 25 days. The main
airport is largely deserted, used by just a handful of holdout airlines
bringing few passengers to and from the outside world.
These two countries are in fact the same country, Venezuela, at two
different times: the early 1970s and today. The transformation Venezuela
has undergone is so radical, so complete, and so total that it is hard
to believe it took place without a war. What happened to Venezuela? How
did things go so wrong?
The short answer is Chavismo. Under the leadership of Hugo Chávez and
his successor, Nicolás Maduro, the country has experienced a toxic mix
of wantonly destructive policy, escalating authoritarianism, and
kleptocracy, all under a level of Cuban influence that often resembles
an occupation. Any one of these features would have created huge
problems on its own. All of them together hatched a catastrophe. Today,
Venezuela is a poor country and a failed and criminalized state run by
an autocrat beholden to a foreign power. The remaining options for
reversing this situation are slim; the risk now is that hopelessness
will push Venezuelans to consider supporting dangerous measures, such as
a U.S.-led military invasion, that could make a bad situation worse.
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chavismo rising
To many observers, the explanation for Venezuela’s predicament is
simple: under Chávez, the country caught a strong case of socialism, and
all its subsequent disasters stem from that original sin. But Argentina,
Brazil, Chile, Ecuador, Nicaragua, and Uruguay have also elected
socialist governments in the last 20 years. Although each has struggled
politically and economically, none—aside from Nicaragua—has imploded.
Instead, several have prospered.
If socialism cannot be blamed for Venezuela’s demise, perhaps oil is the
culprit. The most calamitous stage of Venezuela’s crisis has coincided
neatly with the sharp fall in international oil prices that started in
2014. But this explanation is also insufficient. Venezuela’s decline
began four decades ago, not four years ago. By 2003, Venezuela’s GDP per
worker had already declined by a disastrous 37 percent from its 1978
peak—precisely the decline that first propelled Chávez into office.
Moreover, all of the world’s petrostates suffered a serious income shock
in 2014 as a result of plummeting oil prices. Only Venezuela could not
withstand the pressure.
The drivers of Venezuela’s failure run deeper. Decades of gradual
economic decline opened the way for Chávez, a charismatic demagogue
wedded to an outdated ideology, to take power and establish a corrupt
autocracy modeled on and beholden to Cuba’s dictatorship. Although the
crisis preceded Chávez’s rise to power, his legacy and Cuba’s influence
must be at the center of any attempt to explain it.
Chávez was born in 1954 into a lower-middle-class family in a rural
town. He became a career military officer on a baseball scholarship and
was soon secretly recruited into a small leftist movement that spent
over a decade plotting to overthrow the democratic regime. He exploded
into Venezuela’s national consciousness on February 4, 1992, when he led
an unsuccessful coup attempt. This misadventure landed him in jail but
turned him into an improbable folk hero who embodied growing frustration
with a decade of economic stagnation. After receiving a pardon, he
launched an outsider bid for the presidency in 1998 and won in a
landslide, upending the two-party system that had anchored Venezuelan
democracy for 40 years.
Chávez was brilliant at mining discontent.
What drove the explosion of populist anger that brought Chávez to power?
In a word, disappointment. The stellar economic performance Venezuela
had experienced for five decades leading up to the 1970s had run out of
steam, and the path to the middle class had begun to narrow. As the
economists Ricardo Hausmann and Francisco Rodríguez noted, “By 1970
Venezuela had become the richest country in Latin America and one of the
twenty richest countries in the world, with a per capita GDP higher than
Spain, Greece, and Israel and only 13 percent lower than that of the
United Kingdom.” But by the early 1980s, a weakened oil market had
brought the era of fast growth to an end. Lower oil revenue meant cuts
in public spending, scaled-down social programs, currency devaluation,
runaway inflation, a banking crisis, and mounting unemployment and
hardship for the poor. Even so, Venezuela’s head start was such that
when Chávez was elected, it had a per capita income in the region that
was second only to Argentina’s.
Another common explanation for Chávez’s rise holds that it was driven by
voters’ reaction against economic inequality, which was driven in turn
by pervasive corruption. But when Chávez came to power, income was more
evenly distributed in Venezuela than in any neighboring country. If
inequality determined electoral outcomes, then a Chávez-like candidate
would have been more probable in Brazil, Chile, or Colombia, where the
gap between the well-off and everyone else was larger.
Venezuela may not have been collapsing in 1998, but it had been
stagnating and, in some respects, backsliding, as oil prices slumped to
just $11 per barrel, leading to a new round of austerity. Chávez was
brilliant at mining the resulting discontent. His eloquent denunciations
of inequality, exclusion, poverty, corruption, and the entrenched
political elite struck a chord with struggling voters, who felt
nostalgic for an earlier, more prosperous period. The inept and
complacent traditional political and business elite who opposed Chávez
never came close to matching his popular touch.
Venezuelans gambled on Chávez. What they got was not just an outsider
bent on upending the status quo but also a Latin American leftist icon
who soon had followers all around the world. Chávez became both a
spoiler and the star attraction at global summits, as well as a leader
of the burgeoning global wave of anti-American sentiment sparked by U.S.
President George W. Bush’s invasion of Iraq. At home, shaped by his
career in the military, Chávez had a penchant for centralizing power and
a profound intolerance of dissent. He set out to neuter not just
opposition politicians but also political allies who dared question his
policies. His collaborators quickly saw which way the wind was blowing:
policy debates disappeared, and the government pursued a radical agenda
with little forethought and no real scrutiny.
A 2001 presidential decree on land reform, which Chávez handed down with
no consultation or debate, was a taste of things to come. It broke up
large commercial farms and turned them over to peasant cooperatives that
lacked the technical know-how, management skills, or access to capital
to produce at scale. Food production collapsed. And in sector after
sector, the Chávez government enacted similarly self-defeating policies.
It expropriated foreign-owned oil ventures without compensation and gave
them to political appointees who lacked the technical expertise to run
them. It nationalized utilities and the main telecommunications
operator, leaving Venezuela with chronic water and electricity shortages
<https://www.washingtonpost.com/news/democracy-post/wp/2018/04/10/in-venezuela-a-daily-struggle-for-the-basic-necessities-of-life/>
and some of the slowest Internet connection speeds in the world
<http://nomadcapitalist.com/2017/06/04/countries-slowest-internet-speeds/>.
It seized steel companies, causing production to fall from 480,000
metric tons per month before nationalization, in 2008, to effectively
nothing <https://tradingeconomics.com/venezuela/steel-production> today.
Similar results followed the seizure of aluminum companies, mining
firms, hotels, and airlines.
The relationship between Cuba and Venezuela became more than an
alliance.
In one expropriated company
<http://www.iesa.edu.ve/publicaciones/ediciones-iesa/2014-julio-14/2006=gestion-en-rojo>
after another, state administrators stripped assets and loaded payrolls
with Chávez cronies. When they inevitably ran into financial problems,
they appealed to the government, which was able to bail them out. By
2004, oil prices had spiked again, filling government coffers with
petrodollars, which Chávez spent without constraints, controls, or
accountability. On top of that were the easy loans from China
<https://foreignpolicy.com/2017/06/06/venezuelas-road-to-disaster-is-littered-with-chinese-cash/>,
which was happy to extend credit to Venezuela in exchange for a
guaranteed supply of crude oil. By importing whatever the hollowed-out
Venezuelan economy failed to produce and borrowing to finance a
consumption boom, Chávez was able to temporarily shield the public from
the impact of his disastrous policies and to retain substantial popularity.
But not everyone was convinced. Oil industry workers were among the
first to sound the alarm about Chávez’s authoritarian tendencies. They
went on strike in 2002 and 2003, demanding a new presidential election.
In response to the protests, Chávez fired almost half of the work force
in the state-run oil company and imposed an arcane
currency-exchange-control regime. The system morphed into a cesspool of
corruption, as regime cronies realized that arbitraging between the
state-authorized exchange rate and the black market could yield fortunes
overnight. This arbitrage racket created an extraordinarily wealthy
elite of government-connected kleptocrats. As this budding kleptocracy
perfected the art of siphoning off oil proceeds into its own pockets,
Venezuelan store shelves grew bare.
It was all painfully predictable—and widely predicted. But the louder
local and international experts sounded the alarm, the more the
government clung to its agenda. To Chávez, dire warnings from
technocrats were a sign that the revolution was on the right track
<http://todochavez.gob.ve/todochavez/1976-intervencion-del-comandante-presidente-hugo-chavez-en-la-conmemoracion-del-72-aniversario-de-la-guardia-nacional-bolivariana>.
PASSING THE TORCH
In 2011, Chávez was diagnosed with cancer. Top oncologists in Brazil and
the United States offered to treat him. But he opted instead to search
for a cure in Cuba, the country he trusted not only to treat him but
also to be discreet about his condition. As his illness progressed, his
dependence on Havana deepened, and the mystery about the real state of
his health grew. On December 8, 2012, an ailing Chávez made one final
television appearance to ask Venezuelans to make Maduro, then vice
president, his successor. For the next three months, Venezuela was
governed spectrally and by remote control: decrees emanated from Havana
bearing Chávez’s signature, but no one saw him, and speculation was rife
that he had already died. When Chávez’s death
<https://www.foreignaffairs.com/articles/brazil/2013-03-05/so-long-ch-vez>
was finally announced, on March 5, 2013, the only thing that was clear
amid the atmosphere of secrecy and concealment was that Venezuela’s next
leader would carry on the tradition of Cuban influence.
Chávez had long looked to Cuba as a blueprint for revolution, and he
turned to Cuban President Fidel Castro for advice at critical junctures.
In return, Venezuela sent oil: energy aid to Cuba (in the form of
115,000 barrels a day sold at a deep discount) was worth nearly $1
billion a year to Havana. The relationship between Cuba and Venezuela
became more than an alliance. It has been, as Chávez himself once put
it, “a merger of two revolutions.” (Unusually, the senior partner in the
alliance is poorer and smaller than the junior partner—but so much more
competent that it dominates the relationship.) Cuba is careful to keep
its footprint light: it conducts most of its consultations in Havana
rather than Caracas.
It did not escape anyone’s attention that the leader Chávez annointed to
succeed him had devoted his life to the cause of Cuban communism. As a
teenager, Maduro joined a fringe pro-Cuban Marxist party in Caracas. In
his 20s, instead of going to university, he sought training in Havana’s
school for international cadres to become a professional revolutionary.
As Chávez’s foreign minister from 2006 to 2013, he had seldom called
attention to himself: only his unfailing loyalty to Chávez, and to Cuba,
propelled his ascent to the top. Under his leadership, Cuba’s influence
in Venezuela has become pervasive. He has stacked key government posts
with activists trained in Cuban organizations, and Cubans have come to
occupy sensitive roles within the Venezuelan regime. The daily
intelligence briefs Maduro consumes, for instance, are produced not by
Venezuelans but by Cuban intelligence officers.
With Cuban guidance, Maduro has deeply curtailed economic freedoms and
erased all remaining traces of liberalism from the country’s politics
and institutions. He has continued and expanded Chávez’s practice of
jailing, exiling, or banning from political life opposition leaders who
became too popular or hard to co-opt. Julio Borges, a key opposition
leader, fled into exile to avoid being jailed, and Leopoldo López, the
opposition’s most charismatic leader, has been moved back and forth
between a military prison and house arrest. Over 100 political prisoners
linger in jails, and reports of torture are common. Periodic elections
have become farcical, and the government has stripped the
opposition-controlled National Assembly
<https://www.foreignaffairs.com/articles/venezuela/2017-08-01/venezuela-after-constituent-assembly>of
all powers. Maduro has deepened Venezuela’s alliances with a number of
anti-American and anti-Western regimes, turning to Russia for weapons,
cybersecurity, and expertise in oil production; to China for financing
and infrastructure; to Belarus for homebuilding; and to Iran for car
production.
As Maduro broke the last remaining links in Venezuela’s traditional
alliances with Washington and other Latin American democracies, he lost
access to sound economic advice. He dismissed the consensus of
economists from across the political spectrum: although they warned
about inflation, Maduro chose to rely on the advice of Cuba and fringe
Marxist policy advisers who assured him that there would be no
consequences to making up budget shortfalls with freshly minted money.
Inevitably, a devastating bout of hyperinflation ensued.
A toxic combination of Cuban influence, runaway corruption, the
dismantling of democratic checks and balances, and sheer incompetence
has kept Venezuela locked into catastrophic economic policies. As
monthly inflation rates top three digits, the government improvises
policy responses that are bound to make the situation even worse.
ANATOMY OF A COLLAPSE
Nearly all oil-producing liberal democracies, such as Norway, the United
Kingdom, and the United States, were democracies before they became oil
producers. Autocracies that have found oil, such as Angola, Brunei,
Iran, and Russia, have been unable to make the leap to liberal
democracy. For four decades, Venezuela seemed to have miraculously beat
these odds—it democratized and liberalized in 1958, decades after
finding oil.
But the roots of Venezuelan liberal democracy turned out to be shallow.
Two decades of bad economics decimated the popularity of the traditional
political parties, and a charismatic demagogue, riding the wave of an
oil boom, stepped into the breach. Under these unusual conditions, he
was able to sweep away the whole structure of democratic checks and
balances in just a few years.
When the decadelong oil price boom ended in 2014, Venezuela lost not
just the oil revenue on which Chávez’s popularity and international
influence had depended but also access to foreign credit markets. This
left the country with a massive debt overhang: the loans taken out
during the oil boom still had to be serviced, although from a
much-reduced income stream. Venezuela ended up with politics that are
typical of autocracies that discover oil: a predatory, extractive
oligarchy that ignores regular people as long they stay quiet and that
violently suppresses them when they protest.
The resulting crisis is morphing into the worst humanitarian disaster in
memory in the Western Hemisphere. Exact figures for Venezuela’s GDP
collapse are notoriously difficult to come by, but economists estimate
that it is comparable to the 40 percent contraction of Syria’s GDP since
2012, following the outbreak of its devastating civil war.
Hyperinflation has reached one million percent per year, pushing 61
percent of Venezuelans to live in extreme poverty, with 89 percent of
those surveyed saying they do not have the money to buy enough food for
their families and 64 percent reporting they have lost an average of 11
kilograms (about 24 pounds) in body weight due to hunger. About ten
percent of the population—2.6 million Venezuelans—have fled to
neighboring countries.
The Venezuelan state has mostly given up on providing public services
such as health care, education, and even policing; heavy-handed,
repressive violence is the final thing left that Venezuelans can rely on
the public sector to consistently deliver. In the face of mass protests
in 2014 and 2017, the government responded with thousands of arrests,
brutal beatings and torture, and the killing of over 130 protesters.
Meanwhile, criminal business is increasingly conducted not in defiance
of the state, or even simply in cahoots with the state, but directly
through it. Drug trafficking has emerged alongside oil production and
currency arbitrage as a key source of profits to those close to the
ruling elite, with high-ranking officials and members of the president’s
family facing narcotics charges in the United States. A small connected
elite has also stolen national assets to a unprecedented degree. In
August, a series of regime-connected businessmen were indicted in U.S.
federal courts for attempting to launder over $1.2 billion in illegally
obtained funds—just one of a dizzying array of illegal scams that are
part of the looting of Venezuela. The entire southeastern quadrant of
the country has become an exploitative illegal mining camp, where
desperate people displaced from cities by hunger try their luck in
unsafe mines run by criminal gangs under military protection. All over
the country, prison gangs, working in partnership with government
security forces, run lucrative extortion rackets that make them the de
facto civil -authority. The offices of the Treasury, the central bank,
and the national oil company have become laboratories where complicated
financial crimes are hatched. As Venezuela’s economy has collapsed, the
lines separating the state from criminal enterprises have all but
disappeared.
THE VENEZUELAN DILEMMA
Whenever U.S. President Donald Trump meets with a Latin American leader,
he insists that the region do something about the Venezuelan crisis.
Trump has prodded his own national security team for “strong”
alternatives, at one point stating that there are “many options” for
Venezuela and that he is “not going to rule out the military option.”
Republican Senator Marco Rubio of Florida has similarly flirted with a
military response. Secretary of Defense James Mattis, however, has
echoed a common sentiment of the U.S. security apparatus by publicly
stating, “The Venezuelan crisis is not a military matter.” All of
Venezuela’s neighboring countries have also voiced their opposition to
an armed attack on Venezuela.
And rightly so. Trump’s fantasies of military invasion are deeply
misguided and extremely dangerous. Although a U.S.-led military assault
would likely have no problem overthrowing Maduro in short order, what
comes next could be far worse, as the Iraqis and the Libyans know only
too well: when outside powers overthrow autocrats sitting atop failing
states, open-ended chaos is much more likely to follow than
stability—let alone democracy.
Nonetheless, the United States will continue to face pressure to find
some way of arresting Venezuela’s collapse. Each initiative undertaken
so far has served only to highlight that there is, in reality, little
the United States can do. During the Obama administration, U.S.
diplomats attempted to engage the regime directly. But negotiations
proved futile. Maduro used internationally mediated talks to neutralize
massive street protests: protest leaders would call off demonstrations
during the talks, but Chavista negotiators would only stonewall,
parceling out minor concessions designed to divide their opponents while
they themselves prepared for the next wave of repression. The United
States and Venezuela’s neighbors seem to have finally grasped that, as
things stand, negotiations only play into Maduro’s hands.
The other Latin American countries are finally grasping that
Venezuela’s instability will inevitably spill across their borders.
Some have suggested using harsh economic sanctions to pressure Maduro to
step down. The United States has tried this. It passed several rounds of
sanctions, under both the Obama and Trump administrations, to prevent
the regime from issuing new debt and to hamper the financial operation
of the state-owned oil company. Together with Canada and the EU,
Washington has also put in place sanctions against specific regime
officials, freezing their assets abroad and imposing travel
restrictions. But such measures are redundant: if the task is to destroy
the Venezuelan economy, no set of sanctions will be as effective as the
regime itself. The same is true for an oil blockade: oil production is
already in a free fall.
Washington can sharpen its policy on the margins. For one thing, it
needs to put more emphasis on a Cuban track: little can be achieved
without Havana’s help, meaning that Venezuela needs to be front and
center in every contact Washington and its allies have with Havana. The
United States can cast a wider net in countering corruption, preventing
not just crooked officials but also their frontmen and families from
enjoying the fruits of corruption, drug trafficking, and embezzlement.
It could also work to turn the existing U.S. arms embargo into a global
one. The Maduro regime must be constrained in its authoritarian intent
with policies that communicate clearly to its cronies that continuing to
aid the regime will leave them isolated in Venezuela and that turning on
the regime is, therefore, the only way out. Yet the prospects of such a
strategy succeeding are dim.
After a long period of dithering, the other Latin American countries are
finally grasping that Venezuela’s instability will inevitably spill
across their borders. As the center-left “pink wave” of the early years
of this century recedes, a new cohort of more conservative leaders in
Argentina, Brazil, Chile, Colombia, and Peru has tipped the regional
balance against Venezuela’s dictatorship, but the lack of actionable
options bedevils them, as well. Traditional diplomacy hasn’t worked and
has even backfired. But so has pressure. For example, in 2017, Latin
American countries threatened to suspend Venezuela’s membership in the
Organization of American States. The regime responded by withdrawing
from the organization unilaterally
<https://www.foreignaffairs.com/articles/venezuela/2017-05-05/venezuelas-bad-neighbor-policy>,
displaying just how little it cares about traditional diplomatic pressure.
Venezuela’s exasperated neighbors are increasingly seeing the crisis
through the prism of the refugee problem it has created; they are
anxious to stem the flow of malnourished people fleeing Venezuela and
placing new strains on their social programs. As a populist backlash
builds against the influx of Venezuelan refugees, some Latin American
countries appear tempted to slam the door shut—a temptation they must
resist, as it would be a historic mistake that would only worsen the
crisis. The reality is that Latin American countries have no idea what
to do about Venezuela. There may be nothing they can do, save accepting
refugees, which will at least help alleviate the suffering of the
Venezuelan people.
POWER TO THE PEOPLE
Today, the regime is so solidly entrenched that a change of faces is
much more likely than a change of system. Perhaps Maduro will be pushed
out by a slightly less incompetent leader who is able to render Cuban
hegemony in Venezuela more sustainable. Such an outcome would merely
mean a more stable foreign-dominated petro-kleptocracy, not a return to
democracy. And even if opposition forces
<https://www.foreignaffairs.com/articles/south-america/2018-08-22/take-back-venezuela-votes-not-violence>—or
a U.S.-led armed attack—somehow managed to replace Maduro with an
entirely new government, the agenda would be daunting. A successor
regime would need to reduce the enormous role the military plays in all
areas of the public sector. It would have to start from scratch in
restoring basic services in health care, education, and law enforcement.
It would have to rebuild the oil industry and stimulate growth in other
economic sectors. It would need to get rid of the drug dealers, prison
racketeers, predatory miners, wealthy criminal financiers, and
extortionists who have latched on to every part of the state. And it
would have to make all these changes in the context of a toxic, anarchic
political environment and a grave economic crisis.
Given the scale of these obstacles, Venezuela is likely to remain
unstable for a long time to come. The immediate challenge for its
citizens and their leaders, as well as for the international community,
is to contain the impact of the nation’s decline. For all the misery
they have experienced, the Venezuelan people have never stopped
struggling against misrule. As of this summer, Venezuelans were still
staging hundreds of protests each month. Most of them are local,
grass-roots affairs with little political leadership, but they show a
people with the will to fight for themselves.
Is that enough to nudge the country away from its current, grim path?
Probably not. Hopelessness is driving more and more Venezuelans to
fantasize about a Trump-led military intervention, which would offer a
fervently desired deus ex machina for a long-suffering people. But this
amounts to an ill-advised revenge fantasy
<https://www.foreignaffairs.com/articles/venezuela/2017-11-08/what-would-us-intervention-venezuela-look>,
not a serious strategy.
Rather than a military invasion, Venezuelans’ best hope is to ensure
that the flickering embers of protest and social dissent are not
extinguished and that resistance to dictatorship is sustained. Desperate
though the prospect may seem, this tradition of protest could one day
lay the foundations for the recovery of civic institutions and
democratic practices. It won’t be simple, and it won’t be quick.
Bringing a state back from the brink of failure never is.
<#DAB4FAD8-2DD7-40BB-A1B8-4E2AA1F9FDF2>
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