Venezuela, the latest failure of socialism

Robert Nesimi
Political analyst

For most people the crisis in Venezuela entered their radar only during the past few weeks, but in reality the country has been in a state of perpetual crisis for the better part of this decade. The catalyst event was the declaration of the Speaker of Parliament Juan Guaido, who acting within his constitutional rights temporarily assumed the role of acting President until free and fair elections could be held. It came days before current President Maduro could be sworn in for a second time after elections which were boycotted by the opposition, many of whose candidates were imprisoned or simply barred from running.

Guaido was quickly recognized as legitimate President by almost all neighbours and entire Western Hemisphere, bar some leftist governments such as Cuba, Mexico or Bolivia. They were soon followed by most European countries, including Macedonia. It is precisely this list of countries, most notably the presence of the United States of America, that gave rise to conspiracy theories of an attempted foreign-backed coup willing to bend the will of the people of Venezuela and the legitimacy of Maduro. It draws parallels to interventions in places such as Iraq and Libya, ostensibly since Venezuela is rich in oil. However these theories conveniently ignore the much simpler reality that Venezuela under Chaves and Maduro slowly but surely turned into a failed state, a true dictatorship causing untold misery to its population, to the point of forcing large numbers to flee to neighbouring countries and further abroad. Conveniently such theories are primarily espoused by anti-western propaganda, and even more so by various leftist movements in the West, which thus hope to mask the harsh reality of what a truly socialist government really looks like.

Venezuela is one of the most resource-rich countries in Latin America, most notably in oil. It has the world’s largest proven oil reserves and is the only Latin American country member of OPEC. Largely due to this oil wealth it was the most prosperous country on the continent during the 60s and 70s, but took a turn for the worse when oil prices fell. In 1998 it elected Hugo Chavez as President (who six years earlier had led a failed military coup), largely on a populist socialist platform. Chavez moved quickly to consolidate power, rewriting the constitution, allowing him to stay in power till his death in 2013. Taking advantage of high global oil prices and its financial windfall Chavez embarked in a populist and largely fiscally reckless campaign, designed to tackle poor conditions in healthcare, education and housing for the lower classes. For the better part of the first decade of the 21^st century he became the poster boy of the global left, a shining example of a “socialism that works”, earning the praise of such western intellectuals and politicians such as Krugman, Chomsky, Stiglitz, Corbyn etc.

The other side of the coin however was that Chavez and his “New Socialist” regime were truly laying waste to Venezuela’s economic foundation. As his socialist doctrine dictated, Chavez moved to expropriate, nationalize and put under direct state control whole industries, farmland, dramatically expand public spending, put in place price and capital controls and various other measures from the Marxist textbook. Maduro who succeeded him after his death continued the same policies, that by the end of the last decade were already proving to be devastating.

The end result of this massive socialist campaign was that Venezuela managed to actually become the poorest country in the continent, and by any definition a failed state. The nationalization of various industries meant the departure of many foreign companies who had brought much needed know-how to the country, as well as a huge number of local professionals who were replaced by government cronies. By some estimations the whole private sector was halved in a decade. When oil prices fell, and now having nothing else to export, the country faced various kinds of shortages, such as lack of food, medicine, even basic hygienic materials such as soap. As economic freedom fell (Venezuela is currently ranked 188^th in the world), key economic indicators followed. GDP fell by 6% in 2016, 14% in 2017 and more than 16% in 2018. Meanwhile inflation soared from 70% in 2014 to 4000% in 2017, to eventually reach an astounding 2.500.000% in January 2019. The poverty rate, the much trumped success story of the Chavez regime, topped 80% in 2018, leading to record high levels of malnutrition. By then 3 million Venezuelans had fled the country looking for better opportunities in neighbouring countries such as Colombia or Brazil.

Given this unfolding of events it is not surprising that the majority of people of Venezuela want change, and that Maduro has had to resort to more and more repression to stay in power. In light of the decade-long crisis, the recognition of Guaido by almost all of Latin America, USA, Canada and Europe is to be commended, not condemned.

It is thus all the more unfortunate that large chunks of the global left continues to justify Maduro’s regime and try to put the blame on foreign powers and meddling from abroad for Venezuela’s woes. No doubt it has much to do with the previous praise lavished on the Bolivarian regime, which was trumpeted as a model of a successful socialist country. The current silence of these leftist intellectuals speaks volumes of their denial to face reality and accept that the socialist model never works. As history has shown time and again, it always ends in large-scale economic decline, hyperinflation, poverty, and eventually long lines for food and medicines, just as it did here in former Yugoslavia.

The harsh reality that Venezuelans face now once again shows that the socialist model was and is a failed concept. It should serve as a warning against all kinds of politicians who espouse left-wing economic populism, here and abroad.