At the end of 2016, Nicolás Maduro clings to power although his main achievement has been to bring about Venezuela’s economic ruination. This year, the shortages of food, medicine, and basic goods such as soap and toilet paper became extreme, but astute observers were not surprised: the first signs of scarcity were apparent while the late Hugo Chávez still ruled the country. This year, however, the peril of a famine became so palpable that the more objective elements of the international community began denouncing a humanitarian crisis unfolding in Venezuela.
In January, Maduro decreed a state of economic emergency for 60 days, a means to bypass the congressional majority which the opposition had obtained in the December 2015 elections. By May 13, however, things had deteriorated so severely , with looting at stores and supermarkets becoming a daily event, that Maduro decreed a new economic emergency which included a “state of exception.” In other words, Maduro once again put himself above the law in order to combat a supposed “economic war” waged against Venezuela by the United States and transnational right-wing forces existent only in the strongman’s own fantasies.
In July, Maduro announced that he would open Venezuela’s border crossings with Colombia, which he had unilaterally shut down in 2015 while blaming Colombian paramilitaries for violence in the frontier zone. In a single weekend, 130,000 Venezuelans walked across the Simón Bolívar and Francisco de Paula Santander bridges which connect San Antonio del Táchira and Ureña with the Colombian city of Cúcuta. As the PanAm Post reported at the time:
The Venezuelan regime was unable to hide the alarming scarcity of basic products. It was unable to control the tens of thousands of citizens who decided to head to Cúcuta to buy basic goods and medicines that, even with a heavily devalued currency, are cheaper in Colombia than in the Venezuelan black market.
The exodus into Cúcuta also proved to the world that, contrary to claims made by Foreign Minister Delcy Rodríguez, Venezuelan citizens are truly undergoing a man-made catastrophe as a direct result of the Maduro regime’s witches’ brew of socialist stunts, which range from draconian price and foreign exchange controls to outright expropriation.
One of the main legacies of Chávez’s Bolivarian Revolution, to which Maduro is the prodigal heir, is the absolute destruction of the Venezuelan currency. As Emiliana Disilvestro and David Howden wrote in July, the socialist regime had officially devalued the Venezuelan bolívar by 99 percent in 13 years, from 1.6 bolivars to one US dollar in 2003 to 172 bolivars per dollar in 2016. On the black market, however, the mid-year exchange rate was “nearly 900 bolivars to the US dollar. That is, if you can find anyone selling dollars, or more importantly, looking to buy the badly tarnished Venezuelan currency.”
On December 2, Maduro announced that his government would remove the 100 bolívar banknote from circulation while bills with a larger denomination were printed and imported into the country (naturally, socialism has also created such an acute shortage of paper in Venezuela that money has to be printed abroad). As the Financial Times explained, the 100 bolívar bill “makes up about half the country’s banknotes but is increasingly worthless as annual inflation is forecast to top 1,600 percent next year.” Forbes’ Tim Worstall notes that Maduro and his economic team “managed to create inflation so fierce, and thus such a collapsing exchange rate, that the largest Venezuelan banknote is now worth 1 US cent or less.”
As Francisco Toro wrote in the Washington Post,
There is, certainly, a serious macroeconomic problem underlying the bolivar’s collapse: an enormous, unmanageable fiscal deficit nobody in their right mind would finance. That has led an irresponsible government to create huge amounts of new money out of thin air to cover its spending needs. Economists have known for 100 years that ‘monetizing deficits’ this way feeds runaway inflation. It’s a result no one — except for Venezuela’s central bankers and their ideological supporters — seriously questions anymore.
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Worstall writes that Venezuela is swiftly approaching hyperinflation, “when the rate goes over 50% a month, and that’s a disaster… Everyone knows that the cash notes in their hand are becoming worth less and less just as they stand there. We end up in a place where the price of a loaf of bread changes in the length of time it takes you to queue for it.” He also suggests that Venezuelans should exchange bolívar banknotes “for whatever coins can be found. Their metal value is going to be many, many, times their currency value by now. If, that is, there are any still in circulation.”
But while wild price fluctuations and calamitous levels of monetary instability have led to the rise of a pre-modern barter economy in the country, Venezuelan politics are remarkably stable. Despite all sorts of hopeful predictions of the Chavista regime’s imminent collapse, Maduro’s hold on power is far more steady than at the beginning of the year. This, however, is due to the incompetence and cowardice of Venezuela’s opposition leaders.
After the Supreme Court, whose judges are hand-picked Chavista cronies, invalidated the result of the opposition’s bid to hold a recall referendum against Maduro— a massive effort that involved gathering close to 200,000 signatures, as the constitution mandates— citizens took to the streets to protest a coup de grâce against the already moribund rule of law. Even left-leaning US news outlets condemned the Maduro regime’s undisguised autocracy. The Washington Post, for instance, ran a story with the headline: “It’s official: Venezuela is a full-blown dictatorship.” The majority of Venezuelans agreed. On October 26, less than a week after the court’s pronouncement, over a million citizens lined the main avenues of Caracas, demanding that their right to vote Maduro out of office be respected and political prisoners liberated.
— Mildred Manrique (@milmanrique) October 26, 2016
With the regime cornered and international actors such as OAS Secretary General Luis Almagro demanding a restoration of democracy, the opposition announced a multitudinous march on November 3 against the presidential palace in the Caracas neighborhood of Miraflores, a Chavista stronghold that massive anti-government demonstrations have avoided in order to prevent acts of violence. Victory was within reach, but the opposition leadership folded. Having accepted a “dialogue” with the Maduro regime brokered by the Vatican and the Obama administration, the heads of three of the largest opposition parties decided to cancel the march on Miraflores two days before it was scheduled. Maduro gained invaluable breathing space, and he demonstrated his governing priorities on November 1 by launching his own televised salsa program. At least Emperor Nero sang the Fall of Troy as the flames consumed Rome.
As the PanAm Post wrote on November 14, the opposition leadership “surrendered all principles and they gave in on the most essential points of the negotiation” with Maduro: The Democratic Unity Roundtable (MUD) coalition
surrendered its last remaining advantage by failing to follow through on massive demonstrations against the government. The shameful text announced on Saturday (November 12) only confirms what most citizens expected after the failure of recent protests to pressure Maduro to yield anything of substance…
For the first time in history, a dictatorship gains strength and legitimacy thanks to the Vatican’s support. In Venezuela, Pope Francis has obtained peace, but merely the peace that reigns over cemeteries.
While renewed protests on a massive scale and widespread looting in recent days forced Maduro to backtrack on his decision to scrap the 100 bolívar bill, the citizenry that supported the opposition until its betrayal of all principles is still demoralized. As things stand, there is no real end in sight for the Chavista government, which will most likely step up repressive measures in 2017. Neighboring nations have shown their solidarity with Venezuelan citizens with timid measures such as suspending the Maduro regime from the Mercosur trading block. The Obama administration has been an outright accomplice of Maduro’s thuggery.
President elect Donald Trump, however, promised during his campaign to “stand in solidarity with all people in our hemishpere, and (to) stand with the oppressed people of Venezuela. They are yearning to be free, they are yearning for help.” There is a slender hope that the upcoming regime change in Washington might signal the beginning of the end of the Maduro regime in Caracas.