Is the socialist dream over in Venezuela?

Despite the world’s largest oil reserves Venezuela is an economic basket case being wrecked by a leadership with an insatiable appetite for spending other people’s money.

It is all coming un-stuck though.

Perhaps the socialist dream is over?

[D]oubts grow that Mr Maduro, who barely won the election against his opposition rival Henrique Capriles in 2013, can complete his term. Each day brings fresh rumours of impending violence and rebellion.

Tensions spiked dramatically last week on the first anniversary of last year?s anti-government rioting that left 43 people dead and occasioned the surrender to the authorities of Leopoldo Lopez, a prominent opposition figurehead, who remains in jail today. Facing charges of inciting last year?s unrest, he is quite clearly a political prisoner. Meanwhile late on Thursday, armed intelligence agents arrested the Mayor of metropolitan Caracas, Antonio Ledezma, also aligned with the opposition, apparently without warrant.

Opposition leaders said yesterday that allegations linking Mr Ledezma, 59, to the alleged coup plot cited by President Maduro, were false and demanded his immediate release. ?He?s in good spirits and very optimistic of demonstrating that he has no links with any wrongdoing,? his lawyer, Omar Estacio, said after briefly visiting the mayor with his wife Mitzy early yesterday. The US has also repeatedly denied that it is involved in trying to destabilise the South American nation.

In a statement, the public prosecutor?s office said Mr Ledezma would be formally accused of ?presumed involvement in conspiratorial acts to organise and carry out violent acts against the democratically constituted government.?

News of the arrest suggests a President digging in, his willingness to act as a dictator, ignoring all due process, fed by paranoia. It was first broken on Twitter by David Smolansky, also a close ally Mr Lopez and the mayor of el Hatillo, another Caracas municipality. Earlier, he had told The Independent that the conditions that sparked last year?s unrest were far more dire now. And people are far angrier.

?I hope that Venezuela doesn?t fall into civil war, because it is the worst thing that can happen to any country. But right now we are at the worst moment; we are in our biggest crisis,? he said inside his office, listing three principal factors: the failing economy, staggering rates of violent crime and corruption. All are ruinous and interconnected. Corruption, Mr Smolansky asserted, has sucked $20bn (?13bn) out of the economy. And the economy?s downward spiral spawns ever greater tides of violence.

While fantasy and magical thinking may be the hallmarks of the Maduro regime, speculation about Venezuela, the country with the largest oil reserves in the world, being on the brink of spinning apart is not idle.

?It would be a disaster and it could develop into a civil war,? warned Oscar Alvan, a university teacher and political commentator for El Universal newspaper. He noted that while many members of the military are embedded in the government, there are others in the professional military who are privately despairing of Mr Maduro and could yet try to oust him. ?It is a very explosive situation.?

On top of the risk of civil war, there is also endemic corruption.

Corruption is mostly well-concealed and in Venezuela takes all forms. The US recently attempted but failed to take a senior Maduro official into custody for alleged drug trafficking during a brief trip overseas. ?The most important legal industry, oil, is run by the government and the most important illegal industry, drug trafficking, is allegedly also run by the government,? Mr Smolansky averred.

And corruption has been the inevitable result of Venezuela?s rigged foreign exchange system. Put simply, the government maintains two artificial rates for imports first of vital goods like medicines and for regular imports, say cars, of 6.3 and 12 bolivars to the US dollar respectively. But on the black market 170 bolivars buys one dollar. It is just too easy to game the system and reap the profits that the huge disparities offer. A week ago, the regime quietly gave a nod to reality and accepted the black market rate as a legitimate third exchange level, devaluing the country?s currency by 69 per cent overnight.

For a glimpse of how unevenly the spoils of Mr Chavez?s supposed socialist utopia are shared, you might have passed by the old Officers? Club and Hotel at Fuerte Tiuna, the largest military base in Venezuela, on the south side of Caracas, last Tuesday. Not everyone is allowed in of course. It is for military brass and their friends, often top party officials. A pair of heavily guarded green gates to one side of the club?s entrance leads to the house President Maduro lives in.

While the rest of the country was under a strict a dry law ? a total ban on alcohol sales for the four days of Mardi Gras ? the elite was having a party. The perplexing boom-boom-boom of a fiesta in full swing sounded from beyond the lobby and from up a short flight of stairs. A few more steps and suddenly there was Cancun, or a version of it. Sun chairs occupied by barely dressed bodies fringed giant pools on two different levels, cash bars were weighed down with bottles of rum, whisky and tequila. A disco dance troupe did its frantic routine for revellers to follow. It was just before noon.

Some are more equal than others.

Despite all the oil money Venezuela runs out of essentials.

The shortages started to get serious in December as collapsing oil prices proved the final straw for a wildly mismanaged economy.

Oil accounts for 95 per cent of export earnings. In the years since Mr Chavez came to power, oil output has dropped 25 per cent and huge quantities are essentially given away, to neighbours to curry favour or to Venezuelans for whom petrol is roughly one penny a gallon ? or basically free. Items that today are almost impossible to find in the capital include milk, baby milk, nappies, deodorant, soap and shampoo. So too are many medicines. Also absent from the shelves are condoms, bringing the threat of increased HIV rates and unwanted pregnancies from unprotected sex. Queues form outside supermarkets before dawn and purchases are being rationed by the government. Military police patrol checkouts to quell fights.

?It?s horrible, horrible,? lamented Lina Lorusso, 77, in the aisles of a San Lorenzo supermarket in the Chacao district of Caracas, jealously clasping a bag of beans and two cans of peas. It?s the third supermarket she had tried that day. ?I have watched people hitting each other and shouting. If you find anything it?s three times more expensive than it used to be.? Ms Lorusso arrived in Venezuela 57 years ago from Bari in southern Italy. Now she is watching as her grandchildren go back to Italy. ?The situation here is like it was when I left,? she explains, her lower lip trembling. ?Please help us.?

?It?s like a post-war economy with hyper inflation, shortages, fixed prices and the country?s capacity to produce goods destroyed,? Amabilis Castillo, 27, a treasury products analyst for an international bank, explained. A possible default by Venezuela on its ever-expanding debt is also looming.

Venezuela is a ticking time bomb.

The social dream is actually a nightmare. Unless oil prices recover Maduro is doomed.


– The Independent