Venezuela’s big battle

Tuesday, 22 May 2018 00:00 -     - {{hitsCtrl.values.hits}}

Elections are important because they are the catalyst for meaningful change - but sometimes people visit the polls without achieving change. This was the result in Venezuela last weekend, where colossal mismanagement has dismantled an entire economy and chronic food shortages has driven a nation of 30 million people to desperation. It is a dire warning of what can happen when institutions are hollowed out by power-hungry elite who have no care for their constituents.   

Venezuela’s socialist leader Nicolas Maduro faced fresh international censure yesterday (21 May) after re-election in a vote that foes denounced as a farce, cementing autocracy in the crisis-stricken OPEC nation. The 55-year-old successor to former president Hugo Chavez hailed his win as a victory against “imperialism,” but his main rival refused to recognise the result, alleging irregularities.

According to international media, Presidential elections are traditionally held in December, but they were moved up this year by the country’s all-powerful and pro-government Constituent Assembly, catching the divided and weakened opposition off-guard.

The Democratic Unity Roundtable (MUD) opposition coalition has won support from the United States, the European Union and 14 countries of the Lima Group, who had called for the vote to be postponed. But they could put up little fight against Maduro. However, the people showed their disappointment with voter turnouts almost halving in the poll that has given Maduro a second six year term.  

Maduro is accused of undermining democracy, usurping the power of the opposition-dominated legislature by replacing it with his Constituent Assembly, and cracking down hard on the opposition. Protests in 2017, still fresh in the collective memory, left around 125 people dead.

Ahead of the election, the MUD’s most popular leaders have been side-lined or detained, the boycott their only remaining weapon. 

Despite holding the world’s largest oil reserves, the country faces ruin, with the IMF citing a drop of 45% in GDP since Maduro took over in 2013.The crippled oil industry lacks investment, and its assets are increasingly prey to debt settlements as the country defaults.

And worse, the US threatens an oil embargo on top of the sanctions that have hit Venezuela’s efforts to renegotiate its debt. The crisis is so severe that it could provoke either friction within the ruling civilian-military alliance, or social breakdown on a much greater scale. 

Maduro has refused to allow aid and other assistance, as it would reduce his power, but the country is barely holding on. Venezuela, once a welfare-state success story because of its oil reserves during the time of Hugo Chavez, is now only a shadow of its former self. Decades of economic mismanagement, which included repeated bouts of nationalisation, ridiculous levels of corruption, and institutional erosion, was hit by the mortal blow of reduced fuel prices. Chavez’s death did not help matters, and the country plunged into rampant inflation as its import-dependent economy failed. 

The lessons for other developing countries are many. Elected leaders cannot turn their backs on reality forever. Economies need to be well-managed, institutions need to be strengthened, and corruption must be wiped out. No country has an infinite number of opportunities for growth and if they keep missing the bus they may all collectively wake up to find there are no fresh chances left.