Venezuela or the tragedy of a polarized political landscape





To most, in the West, the Venezuelan crisis is the result of mismanagement by a socialist dictator, for many Venezuelans and socialists, its the purposeful sabotage by the West of the economy. None of those visions are true. Whilst Maduro has authoritarian tendencies, and the West publicly criticize his regime, it's an oversimplification of each side to paint them as they currently do.





First, let's address the "dictatorship" that is presumably the characteristic of Maduro. He was democratically elected, and will face re-election next year, this is not a good start for those saying that he is a dictator. But, as the most common objection goes, Venezuela is supposed to not have free elections, making them as legitimating of Maduro as the North Korean or Soviet ones. Again, notwithstanding Carter's comment on Venezuela being the best election system (technically, as it is a mix of traditional and electronic voting), there are proofs this is wrong. The opposition actually won the last parliamentary elections, that's the biggest crack in the dictatorship theory. To explain how Maduro won in the first place is not very complicated, there was a quite recent political coalition of all the pro Maduro parties (2007), boosting his score. He was also taking advantage of Chavez popularity, especially just after his death, making him more popular than he would otherwise be. The degrading economy then made it harder for him, and with both the coalition effect lowering, and the Chavez death being long enough ago that it didn't help him either, he lost the parliamentary elections. Suggesting, without evidence, that the elections of a democratic country are not valid is a dangerous precedent and shows how people are ready to buy into a narrative they agree with, even if it's not factual.

The fact is, though, that despite the loss at the national assembly, he was still able to somewhat govern. This is due to the Venezuelan government being in effect more presidential than federal, despite being officially a federal presidential republic, a president can partially rule by decree. That said, there is visible gridlock in Venezuela political system, it shows that the parliament still has power, but is also the reason for unfortunate consequences. Whether you agree with capitalism, socialism, or whatever form of economic system and government, the absolute disagreement between a president and his national assembly, in a time of crisis, is deadly. With the National Assembly preferring capitalism, and wanting to abolish all that the Chavez system has done, and Maduro wanting to preserve it, they came head to head, with no consensus possible. It is true that the people's consensus lies within the latest election, and that, therefore, the opposition is in a strong position. Without possibility of democratically ousting the president, it plays a very dangerous game by trying to shorten his mandate to have free hands anyway. But despite it being dire, with both parties increasingly disregarding the political institution to either gain or retain power, it's not where the problem for Venezuela lies.





Even Saudi Arabia is struggling nowadays, it means bad news for every country relying on oil production. Not only does Venezuela relies on oil, but it also relies on a quite heavy crude, which means that it has important costs to refine it, and it therefore becomes barely profitable if prices fall too much. It also means massive investments in production, and, as a result, debt. This is not the fault of socialism, although, relying massively on oil prices, which most oil producers do, means that, as it is the bulk of tax revenue, budget becomes short when prices go down. Most OPEC members currently need barrel prices at around 100$ to have their needed government revenue. It currently is about half of that. It is not a surprise that they then struggle, whether their oil industries are private or public. The effect of socializing the oil production, is not foreign, and not that opposite, to a privatized sector. It basically means more profits, a necessity by the state to fund oil production investment himself or by debt, and more risk, as, if not profitable anymore, the costs would stay without profits to cover them any longer. It is the same gamble private companies make when they decide to produce oil.

People then retort on the economy being far from diversified, which is true. But it is true across the board of most developing nations, whether capitalist or not, and the biggest point, is that most developed nations can't actually afford capitalism. When you look at the public part of the economy, you'll see that, in poor nations, it's often the majority of the economy. It is not because socializing economic sectors renders you poorer, but because investment needs to come from somewhere, and, in poor nations, there is not enough demand, nor foreign investment, to be the economic driver, and it therefore is the state who needs to take this role. In spite of this, Venezuela's economy is actually 70% private. It means two things, Venezuela is not fully socialist, and second, it has assets and investment, which seems paradoxical with what we know from Venezuela, and what was discussed earlier. This shows a simple fact, that is often the pitfall of government involvement in more modern economy. It actually needs to act like a company itself, to diversify, in addition to integrate (which Venezuela did), to lower risks associated with a single industry being the source of most of government's revenue. The capitalist part won't resist the collapse of a government if it is a mass investor in the economy, and this collapse is more likely if all the money comes from a single place. If Venezuela's oil economy was private, it would have grown less quickly, because private companies take more from the economy in form of dividends, and have stunted Venezuela social programs, but, because transnational companies are by definition diversified, at least geographically, it wouldn't have been in a so dire state now. It is the stage for another paradox, that it that Venezuela's oil sector investment in the economy was actually what created the collapse, if it wasn't giving any money back, no one would depend on it, and if it failed, no one would care. There is an alternative, in public ownership of an economic sector, to diversification, but it wasn't necessarily possible for Venezuela. It would have been, like in Norway, a sovereign fund. To keep most of the money from the oil revenue and make it fructify. But, Venezuela having a heavy crude, despite arguably the biggest world's resources in oil, the cost of production is too important to set up an important fund. Another thing that would have starved such funds, is the current management of the oil profits.

Venezuela, does have loans to repay now, but for over a decade it used most of the money for ambitious social programs. They mostly did help the economy, but the lack of strategical reserve made an important part of their effects reverse. There is also suspicion of mismanagement of the oil company, but given it happens in private companies as well, it isn't really accountable for the whole picture. The truth is that, whilst programs do stimulate the economy on the short term, the government should have taken measures to use some of the money to either diversify or have a reserve, this negligence of the company, forgetting that it is a company first and foremost, even if it serves the interests of Venezuela. It might have been due to popular pressure, and some private companies fell in the same trap, but it is why the economy of Venezuela was so intensely affected and it is what the government did wrong on the economic side. There are now shortages, which is a topic intensely controversial.

The shortages are neither a sabotage, nor mismanagement, they are the result of a falling economy. Companies are basically betting against Venezuela's economy, with reasons, the demand, and the local money, is falling week after week. It is therefore not profitable to give goods to people who can't afford it, and the presence of goods in the country for a few weeks makes them lose their value or less likely to be sold. This part is only about companies who directly distribute in Venezuela, where they basically still have to pay their local footprint, to sell goods that are either unable to be sold at the needed number, or that, if they are still able to be sold in mass, have lost their profit margin. For companies who use local distributor, it's not better, they basically don't have anymore demand, as distributors gets cash starved, especially by the divergence between the official and real exchange rate of the bolivar, and also the usual superinflation and crumbling economy. There is then no way for foreign goods to easily enter the country, for the lack of money it would make, and the government has to take it over, making his burden even heavier, and his deficit bigger, and it would obviously not be perfect, given the cited problems, and that it is not a viable situation, as the government doesn't act there as a company but only as temporary relief for the population. The policy of control of capitals, and of a standard exchange rate is understandable, as it avoids heavy capital flight, and through this protects the economy from total destruction, like Germany in the 30s. This is an impossible situation, where both outcomes are bad. This lead to protests and the new constituent assembly, with a country still in ruins now confronting the usual result of an economic crisis, political violence and the end of any political dialogue.





As said previously, both political coalitions are trying to subvert the institutions, and the democratic move of the other, each playing with its strength. All this in an economic crisis that doesn't have any good option left, and that is not the result of the government, but it is its lack of economic insight which made it worse, and non reversible. Now, frustrated by its inability to currently influence the situation, the urban voters of the opposition tries to violently revolt against the government. Maduro first used this to cling on to power even more strongly, and this makes the revolution counterproductive as anything short of a violent chaos, with suppression of the current government, will only make Maduro use emergency powers to get over the 2018 deadline (the presidential election where he has no chance of getting reelected). Some opposition members would still advocate for that, even if it makes the economic crisis even worse, that said, it is not achievable by the opposition anyway, as the government has still the support of 40% of the population, and the police and the military. There needs to be a political resolve. This was understood by Maduro, which move to make a constituent assembly wasn't only a move to bypass the opposition, and was likely one of the only option left short of him resigning. This is the same kind of move made in plenty of regimes with a violent revolt, and is usually the prelude to a change of the institutions in favour of the protesters. But the opposition didn't take this move as one towards a peaceful political resolution, and Maduro doesn't have any way left to prove himself. Indeed it could have also been to legally have a new assembly, and to make sure that the opposition doesn't have an absolute majority. The boycott has multiple possible reasons, but was tragic for the opposition. It would have won the majority of seats, even with unfair rules and tampering. It would then have had the possibility of changing the constitution, rewriting the role of Maduro as less important, and making Venezuela a federal republic. Why the opposition preferred to not vote at those elections is also important to understand them, not as saviors or traitors of Venezuela, but as just another political party, as people who are similar to their foes in the government apart from ideological alignment. It might have been because, if the constitution assembly falters, and Maduro resigns, the opposition now has the presidency and the absolute majority at the assembly, making it an absolute victory, and a rule that is likely to last at least as long as the one of Chavez. It is also possible that it waits for the violent revolution method to work, and it then gets the presidency and all the rest as said previously. The opposition might have no choice, as, their political choice of saying that everything Maduro does is corrupt and for his personal enrichment, undermined Venezuela political institutions so thoroughly that their rank and file members won't vote in an election by fear of legitimising an illegal victory by the other camp. It could finally be that the only likely outcome of a new constitution, is the erosion of the presidential power, and, as they are almost assured the seat very soon, it would be like eroding their own power, in favour of a more moderate parliamentary rule. Whatever is the reason for this action, it might have dramatic consequences, what was poised as a political resolution, with a way for Maduro to quietly exit, has now become unchecked power for someone who wants to desperately keep it, but mostly wants an unadulterated Chavez's legacy, and any try to silence the opposition, will only see it use its last tool, violence.





In conclusion, the crisis in Venezuela is complex, and often caricatured by the media. It is basically a crisis, who's economic start, detached from the country, where the OPEC got outrun in terms of production by the US shale, creating a global glut, soon took an increasingly domestic turn. The lack of protection for such an event as an oil crash, although not a Venezuelan particularity, made the crisis worse, and the current government is responsible for it. This spiralled into more and more dire consequences, with the initiatives Maduro took, trying to mitigate this, only avoiding total collapse, whilst actively worsening the crisis, which, as they were the only possibilities left, the best, and worst, outcome possible. Obviously, with an already quite divided political landscape, with two parties facing each other, and fundamental in disagreement, over the economic system, this quickly went from an economic crisis to a governance crisis. The opposition, being the majority, tried to push its advantage past the institution of the presidency, which blocks it from ruling. Maduro, tried to instead bypass the national assembly, which was held by the opposition, to keep the Chavez ideology in place. It created gridlock in an already troubled time, and led to both parties distrusting each other. To add to this tragedy, from a dissatisfied youth, who saw what it voted for being denied the control of the country during an economic disaster, and suffering from the consequences of said disaster, started rioting. It seemed like there was no end in sight, and that the polarization was going to lead to a civil war. Then Maduro tried a conciliatory political resolution, where the opposition would become the first force in the country, leading it through the National Assembly, with rules that made for them losing their supermajority, to keep Maduro's party relevant, and with the likely change towards non presidential rule, inhibiting the opposition from a total grip on the country. It could be argued that this settlement was unfair, given that it changed the rules the game was played just when the opposition is winning it, and that Maduro has nothing to say given his current unpopularity. That said, he was handed in a victory by the opposition, who, thanks to the polarized political landscape, didn't even field candidates, boycotting it altogether, whereas, if they participated, having the bargaining power of the majority, they could have negotiated to a political solution even more in their favour. Now there is not much possibility left, either the opposition tries to get over the current political climate, and dethrone Maduro at the next presidential elections, calming down its members until then, because trouble will only help Maduro postpone elections and give himself emergency powers, with the reserve that because they didn't participate in the last assembly, they might never get back to power, or it descends it violent chaos, as the opposition doesn't have enough superiority to make a violent revolution, only enough to start a civil war.

Hopefully, this will remain only a Venezuelan issue, and will be peacefully resolved with the next presidential elections, but always doubting someone's election, his/her legitimacy, painting your opponents as corrupt, greedy, and putting all the shortcomings of a state as the consequences of a single person, has shown to be dangerous, wherever you are on he political system. Similarly, always saying that all the problems are from foreign sabotage, that you're under siege, is also dangerous and counterproductive. If the political climate in Venezuela wasn't so polarized, their economic crisis might have not be as much of a tragedy, and they would have had a government of national salvation, who isn't partisan. It is a cautionary tale, especially with the evolutions in the US and elsewhere, that 30s Germany just wants to resurface, and that, unless actively trying to see your political opponents as a fellow human being with different ideas, not a subhuman or someone just wrong or evil, we might, again, get extremist ideologies, and regular political violence, following an economic crash.