Comment: Venezuela: Hope lies in both sides working together

With plunging oil prices leaving Venezuela on the brink of default, what hope is there for a political settlement?

The untimely death of Hugo Chavez deprived the Bolivarian revolution not only of its leader, but also of its future. Always closer to a cult of personality than a political revolution, the Bolivarian project lacked a coherent ideology or clear goals to drive it forward in a post-Chavez era.

But it is with the recent collapse of oil prices that the Bolivarian revolution truly comes to an end.

A fact often forgotten about Chavez’s popularity is that it was always closely linked to the price of oil. Despite being astronomically popular in the aftermath of his election in 1998, his popularity had fallen to 29 per cent by early 2002 – a year in which the price of oil averaged just $29 per barrel. But this decline was reversed as oil prices started to rise and in 2011, when prices had almost quadrupled to $111 per barrel, Chavez’s popularity had soared to above 50 per cent.

In crude terms, high oil prices allowed Chavez to spend generously, and this helped make him popular.

But commodity booms do not last forever, and the revolution made little provision for the future, putting no money aside to ensure social programs remained funded in a post-boom era. As oil prices continue to slide, government spending on social programs (and everything else) will have to decrease too. This will further erode the popularity of Chavez’s successor Nicolás Maduro.

The fact is that Venezuela’s finances were in serious trouble even before the recent drop in oil prices. For years the government relied on debt to finance its spending, but creditors were already becoming unwilling to lend as the debt burden skyrocketed. Now, by automatically reducing the value of Venezuelan oil exports, the drop in oil prices has raised the spectre of a default. And with that, the revolution is essentially over.

There is little that Maduro can do to reverse the downward spiral now engulfing Venezuela. His only hope was that oil prices remained high; it is now clear that sooner or later he will run out of money. Without the charisma and popular appeal that allowed Chavez to charm his way out of political trouble, it is difficult to see how the Maduro government can survive.

The transition to a new government will be difficult as a result of one of Chavez’s most pernicious legacies: the destruction of the country’s state institutions and political organisations. This allowed Chavez to concentrate all of the power of the state in his hands, and few dared to make decisions that went against his wishes.

This was true even of the central bank and the judiciary, which were supposedly independent of the executive. The case of the judge Maria Lourdes Afiuni, who was incarcerated after issuing a court ruling that angered Chavez, shows the price that was paid by those who challenged his authority.

Consequently, a solution to Venezuela’s current problems will have to be found outside of the framework usually provided by state institutions and political organisations. This will require a consensus between both sides of the political divide.

The opposition supporters who wish for a complete break with the Maduro government must realise that entirely removing the regime runs the risk of creating a power vacuum, the consequences of which could be catastrophic. On the other hand, those on the government’s side who oppose a compromise with the opposition must accept that it is the only option to stop the country’s collapse.

The first step is for the government and the opposition to realise that Venezuela needs a national unity government that represents both sides of the political divide. While polarisation can be a successful political strategy – it worked for Chavez – as a governing strategy it is doomed to failure.

Polarisation creates instability, and an unstable government cannot reconstruct the state institutions or deal with the imminent economic disaster facing Venezuela. Hope lies only in both sides agreeing to work together.

Gabriel Leon is a political economist and lecturer at King’s College London. Follow him on Twitter

26 Responses to “Comment: Venezuela: Hope lies in both sides working together”

  1. richardhering

    “The first step is for the government and opposition to realise that Venezuela needs a national unity government….” And when do you think this “first step” should be taken? Within the ample provisions of the democratic constitution, or outside of it? After a 2016 referendum on the Presidency, if it happens, and if it is won by the opposition, and then an election which the opposition wins, or by an undemocratic sidelining of the constitution before that date? Please clarify, so we know exactly where you’re coming from.

  2. richardhering

    “The first step is for the government and opposition to realise that Venezuela needs a national unity government….” And when do you think this “first step” should be taken? Within the ample provisions of the democratic constitution, or outside of it? After a 2016 referendum on the Presidency, if it happens, and if it is won by the opposition, and then an election which the opposition wins, or by an undemocratic sidelining of the constitution before that date? Please clarify, so we know exactly where you’re coming from.

  3. franknowzad

    How do you write a piece about the collapse of socialist Venezuela without mentioning the oppression and torture of it’s own people? Something to hide commies?

  4. Johnnydub

    So will the plight of the Venezuela people and the disaster of their economy finally be the evidence that convinces the left that socialism will never work?

    Or is it just another “it was never PROPER socialism”?

  5. Phantomsby

    Don’t they have to try killing millions of people next? That’s the normal socialist m.o.

  6. Leftyliesrefuted

    Nah, it was all the BANKSTERS’ fault, not to mention those nasty evil neoliberal [glad you managed to get that word in, Lefty – btw, what does it actually mean? Ed.) Americans!

    😉

  7. richardhering

    I don’t think I really understood the main point of your article: are you suggesting that a national unity government should somehow be convened now, before the local elections at the end of the year, before a possible recall referendum vote next year, and before a potential recall presidential election? Please clarify.

  8. Leftyliesrefuted

    Oooops! Now, where’s that damn memory-hole when you need it? 😉

  9. Ringstone

    Oh, it was most certainly proper Socialism.
    Economy tanks after economically illiterate Govt spends money like a drunken sailor to buy votes from it’s client base – who magically end up worse off in the end. Check.
    Potentially wealthy economy driven into the ground through interference and gross mismanagement. Check.
    Institutions of civil society subverted. Check.
    Producers victimised and their assets expropriated to keep the show on the road for another few weeks. Check.
    It’s always someone else’s fault. Check

    Yep, they’re all there; definitely Socialism.

  10. CortexUK

    Venezuela’s has a large number of useful idiots in the British Labour Party supporting their policies. And Abbott is Useful Idiot Prime. I wonder if she demanded one of her very high, non-negotiable appearance fees for this interview?

  11. MountainousIpswich

    Maduro has politicised the army and defrauded the last election.

    Venezuela will descend into anarchy and dictatorship and Maduro will have to be carried out of office.

  12. gelert

    Venezuela’s impending bankruptcy may explain why the Castros are cosying up to the US.

  13. Guest

    No surprise you’re making excuses as fast as you can, using your political correctness as a weapon.

  14. Guest

    No surprise you blame politices far less extreme than yours as “socialism”.

    You don’t criticise the UK government’s austerity, which has raised spending.
    You don’t criticise the UK government’s expensive pandering to rich interests.
    You don’t criticise the UK government for causing a depression.
    You don’t criticise the UK government for undermining basic civil institutions.
    You don’t criticise the UK government for victimising workers and lowering their income.

    Nope, your politics are just fine and of course YOUR rich’s collectivism – capitalism – is just fine.

    The problem in Venezuela is a cult of personality.

  15. Leon Wolfeson

    Keep blaming everyone else for your policies.

  16. Guest

    Yea, how dare they not be as bad as the UK. Those magical commies!
    Let’s see…what was it…oh yea, the ATOS you love so much. Let’s start there – oppression and torture, right there, fully stamped approved by you.

  17. Leon Wolfeson

    Same place it always was, in your head.

  18. Guest

    Oh right, so there MUST be a coup, as you whine about democracy not giving you the right result.
    If you held off, your right might have won the next election. But you won’t.

  19. Guest

    Scared of Women now, Phil. Sad.

  20. Guest

    Oh right, you’re mad people outside your ideology are making cash. That’s the sole source of your annoyance, right.

  21. MountainousIpswich

    There MUST be a coup?

    There already was a coup. Last election. Electoral fraud was massive and widespread

    http://www.reuters.com/article/2013/04/15/us-venezuela-election-idUSBRE93C0B120130415

  22. Guest

    You didn’t win though, so evidently not enough fraud for you. As you support coups.

    And of course in the UK.

  23. LB

    . For years the government relied on debt to finance its spending, but creditors were already becoming unwilling to lend as the debt burden skyrocketed.

    ============

    Borrow and spend. That’s what Keynes demands. That’s what the left demands.

    Look at the results

  24. LB

    Raise spending means no austerity Leon.

  25. ForeignRedTory

    The problem is that the person in question is a completely incompetent lout, who obviously has been taking his ideas about fiat-money from you.

    The only sensible things for this Madero government is to do the same thing as Syriza: raise the white flag, and capitulate without further nonsense and also, just like Manolis Glezos, issue apologies for taking part in the illusion.

    http://www.theguardian.com/commentisfree/2015/feb/22/guardian-view-greek-debt-deal-victory-or-defeat

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