By Damien Dean
The untimely death of Hugo Chavez in 2013, who grabbed the political power with a popular support in 1998, did prove in such a short time that his appointed president Nicolas Maduro is not sharp enough problem-solver for the massive problems bequeathed by his predecessor. Since then, the Venezuelan economy simply went out of control: inflation hit record high whereas GDP growth a record low. In such a dysfunctional economy, basic services such as healthcare and food provision came very close to total halt, homicide rates skyrocketed, which in turn led some Venezuelans flee from the country. For many in Venezuela, life has become short, nasty, and brutish. And Maduro’s populist tactics help little to solve such problems.
When the Bolivarian Revolution (so-named by Hugo Chavez after Simon Bolivar, a military and political leader who fought against Spain’s colonial rule in South America) began in 1998, Chavez had one thing in mind: elevating ordinary Venezuelans from poverty by tearing apart the established political parties that were unresponsive to the demands of people that governed the country from 1958 to 1998. Indeed, Accion Democratica (AD) and the Comite de Organizacion Politica Electral Indipendiente (COPEI), parties that dominated the political field in the 1980s and 1990s, excluded various segments of society from political participation. And their unpopular neo-liberal economic reforms were little help in reducing poverty.
During Chavez’s presidency, the country underwent massive transformation with improvements in various areas such as literacy rate, life expectancy, child mortality just to name a few. Statistics are abundant on that. However, to achieve Venezuela’s great leap forward, an overhaul of political and economic system, which would turn a sound democracy into a hybrid regime with devastating impacts later, was needed. Politically, a less assertive opposition and economically more statist recipe provided the regime with the terrain on which the Revolution has thrived.
Hugo Chavez achieved to create a less assertive opposition by abolishing the puntofijista system written on the Punto Fijo Pact, a pact that sets the rules of democratic competition between political parties in Venezuela and by introducing a novel idea of National Constituent Assembly. The idea was supported by a popular referendum on April 25, 1999 with 87% of voters approving the initiative. From that moment on, the Assembly, instead of the Congress, has been invoked to reform or draft the Venezuelan constitution. The members of National Constituent Assembly would be elected directly by the citizens, and certain number of seats would be reserved for different social sectors such as business, farmers, workers, and indigenous people. Though, such mechanism definitely increased the direct representation of people from all walks of life, it, at the same time, botched the balance between legislative and executive powers. With this referendum, the president is granted with the power to call for any kind of referendum without an approval from the legislature. The seeds of the hybrid regime were sown thus in Venezuela.
Economically, Chavez’s policies were rather a continuation of the old economic policies at the outset of his first tenure. From 1999 to 2003, the year the price of oil reached unprecedented levels, a tight fiscal control and a foreign investment-friendly policy were prioritized. But this changed quickly. Even before the oil boom, Chavez politically re-designed Petroleos de Venezuela S.A. (PDVSA), state-owned oil and natural gas company, whose workers went for a strike in 2002, demanding a new presidential election. The response was rather expected: 60% of PDVSA staff were fired. Combined with the redesign of PDVSA, the dramatic increase in oil prices allowed the regime to sustain expansive fiscal policies until 2009. By way of funneling the revenues from oil to people, various social programs were implemented during this interval, which had a concrete impact on the well-being of the ordinary Venezuelan. However well-intentioned notwithstanding, the most important sector in Venezuela has become an instrument for the regime to keep its voter base loyal to Chavismo. Yet, it did not take long for Venezuela to show typical signs of the Dutch disease.
Such an overhaul in politics and economics served the rise of hybrid regime in Venezuela. In hybrid regimes, autocratic practices are prevalent without abolishing democratic institutions altogether. The legitimacy of policies enacted by the ruling party solely comes from its victory in elections—whether the elections are fair or not. Via legal or illegal channels, the ruling party dishevels check and balances on the executive branch. While all these happening, the opposition is suffocated by the ruling party who accuse them of being traitors, disloyal, oligarchic etc… whereas the supporters are enlivened with social programs or lucrative business contracts. Deprived of any kind of means and platforms to express itself, the opposition succumbs into vegetarian life, as if it is a body still alive yet dysfunctional.
Though the command economy in Venezuela has started giving serious alerts long ago, Maduro has just worsened the problems. Instead of having a tight fiscal policy that could have save the foreign reserve of the country a bit longer, the Maduro administration instead printed money to curb the effects of the dwindling access to international capital that was coming from excessive oil exports. It then caused hyperinflation nearing 800% in 2017. Adding to that, the government also fixated the Venezuelan bolivars to the US dollar, giving an incentive to the black market to manipulate the exchange rate. Therefore, shelves in the country have become empty as private sector cannot sell their imported products with the fixed exchange rate. The result is a tattering economy on the verge of total collapse.
The free-fall of the country’s economy and soaring crime rates that came with it forced citizens to protest the government’s economic policies. To “restore the peace” and bring stability back to the country, Maduro suggested the re-writing of the constitution by the National Constituent Assembly without specifying how long the process will last and what will happen to the legislative power. Unlike Hugo Chavez who used to ignite the process for the National Constituent Assembly by holding a popular referendum, Maduro decided for this move by decree.
Branding the organizers of unofficial plebiscite against this move as “terrorist who are working against the will of people” and accusing the US and other right-wing business circles, some of which are funded by the US, of sabotaging the economy in Venezuela, Maduro plays the simple trick of populism: find scapegoats for the structural problems both in economy and politics. However, populist tactics are useful for only short-term gains, and Venezuela’s recovery necessitates long-term revisions working with the opposition.
Countries are stable either because they have the rule of law with transparent institutions or authoritarian rules that repress opposition. Hybrid regimes are destined for chaos and instability. Therefore, to restore peace and stability, Maduro has two excruciating options: he will either turn the country into a one man’s rule or into a functioning democracy. Given his record-low level approval hovering around 20%, if Maduro wavers between the options, citizens’ trust in justice might entirely shatter. And only a civil war will be looming in a society where citizens lose their trust in justice.