Over the last five years, Venezuela has suffered a greater economic contraction than America experienced during the Great Depression. As the crisis has unfolded, Venezuelans have endured drastic shortages of basic foodstuffs, medicines and consumer goods – although petrol remains practically free – and the humiliating return of long absent diseases. Repeatedly, the country’s political leaders have exacerbated the crisis with ill-timed economic and political gambles. The resulting disaster is an object lesson in misrule. By the middle of last year the minimum wage was barely enough to purchase a tenth of the food needed for a single person to survive. In 2017 one study found that three quarters of the population had lost an average of 19 pounds in the previous year. It is important to remember that this unprecedented crisis took place while the government in question maintained monopoly control of revenues from one of the world’s largest oil reserves.
Venezuela’s road to ruin was arguably paved with good intentions. Like other petrocrats, President Chávez assumed that rising oil prices would indefinitely sustain his intrusions into the economy, not to mention his creeping authoritarianism. His egregious takeover of the state owned petroleum company, Petróleos de Venezuela (PDVSA), and his installation of cronies in place of technocrats throughout the petroleum sector set the stage for what now seems like an inevitable collapse, but for several years before Chavez’s autocracy became a matter of established fact rather than political interpretation, Venezuela was widely held up as a model of what could be done with oil.
In July 2012, for instance, the leftist historian Tariq Ali told an audience at the Bolivarian University of Venezuela that Chavez’s foreign critics ignored “the fact that he has had more elections, has won more elections than any other [elected leader].” Ali argued that Europe and the US always acted in bad faith and kept their seal of approval for “democracies that do what they say must be done” although true democracy – one that focused on the struggles of working people – could not be found in these places, nor in China, India or Russia. Instead, the “only real alternative available in today’s world is found here in South America.” Chávez’s Venezuela was “an alternative precisely because it questions all of the priorities of modern capitalism, using the state on behalf of the poor.” Despite his optimism, Ali warned his audience that “Venezuela must not be lost” wisely adding that “it would be total foolishness to think that the victories we’ve had in Venezuela, Ecuador, and Bolivia are somehow irreversible.”
In Venezuela, the erasure of those gains occurred with breathtaking speed. Massive corruption (up to US$300 billion appears to have been looted from state coffers), classic mismanagement, several grandly impractical development schemes and projects, and the post-Chávez PDVSA’s decision to forgo savings of more than US$230 billion (obligatory before the takeover) all contributed to the disaster. But warning signs, including criticisms of Chávez from the left, were almost entirely discounted while high oil prices allowed the government to conceal its lack of judgment and mistakes. Similarly humiliating crashes happened in Russia and Iran when tumbling oil prices upended their economies, but nothing quite as dire as the current crisis in Venezuela transpired in either country.
What might we learn from this? Guyanese hardly need to be warned about the perils of government incompetence or cronyism, nor about expensive development projects (hydroelectric schemes, glass factories) that don’t materialise. Nor, perhaps, with the recent faltering of Trinidad still in view do we need to be told that oil can spoil, rapidly. What we may underestimate, however, is the need for a public sphere that can criticise a leader or government without fear of retribution. Little attention was paid to the erosion of press freedom in Venezuela during the Chávez years, but with hindsight its decline clearly contributed to the perfect storm of bad decisions that ensued. While none of us can foresee the future of a volatile and unpredictable commodity like oil, nor can we know what the political transition to a petroleum based economy will entail, a free press is something that we can, collectively, protect – providing, of course, that we acknowledge its role in maintaining democratic transparency and accountability in the first place.