Saturday, 9 April 2016

What happened to Venezuela? I will explain you as I would to a friend

Quite often, I find myself trying to answer some version of this question: "What the ____ happened in Venezuela?". For this, I will tell the story as I would tell it to a friend.
I will divide it in acts that you can easily skip (but if you really want to go down the rabbit hole, then read the whole thing). Also, I'll use the least possible amount of dates or stuff that you might easily forget.


Once upon a time, America (the continent, not the USA) was inhabited by three great civilizations: Incas (the ones from The Emperor's New Groove), Mayas (the ones that said the world would end in 2012) and Aztecs (the ones that were into chocolate and human sacrifice).
There were also loads of smaller and less organised tribes running around, and Venezuela was full of those. Hunting, gathering and fishing, these guys had no idea that on the other side of the world there was a man named Christopher Columbus (Cristóbal Colón for Spanish speakers) who was crownfunding to find a cheaper and safer way to get to India.


It was 1492 and your man Columbus finally found land, but it wasn't India. He soon realised that but decided to call the inhabitants of this new tropical haven indians anyway. Some huts on the water reminded him of Venice, and then, he named the land Venezuela (little Venice if you want to be flattering with your translation).
The place was quickly colonized in the name of Spain. The locals became servants or withdrew to the deep wild (the ones that survived, that is), and the harder labour was made by slaves brought from Africa. All the cool jobs were reserved for the Spanish.
Somehow, the population got VERY diverse and in a couple of centuries there were 50 shades of people. Many of them wanted a go on the VIP seats.
The American War of Independence (now I mean the country) and the French Revolution inspired the lighter shades to get rid of their glass ceiling later on the XVIII Century.
A guy named Simón Bolívar led the process which took the first quarter of the XIX century. Then he went on to do the same in the rest of South America. In case you wonder, he died of TB (although nowadays propaganda makers are trying to come up with evidence that he was murdered).
On those days, there wasn't a "Venezuela" on its own, it was a mix of us, Colombia and Ecuador that was called "Gran Colombia" (please never call it "Columbia", thanks). The place was too large and no one had Internet or Smart Phones, so communications sucked and eventually it divided in the three aforementioned states (Colombians got to keep the name, no one complained).
Now, it was mid XIX century, the country was finally independent, and Venezuelans could follow their dreams or whatever. In 1854, slavery was abolished (three decades after everyone else was "free" but still in need to run profitable plantations) just in time for a long and bloody CIVIL WAR. I've heard from some history experts that this has been one of the most shameful ways to abolish slavery, not my opinion, theirs (but I agree).
Known as the FEDERAL WAR (1859-1863), it was to blame for about 100,000 deaths in a rural country with just above one million people at the time.
After it, a series of short term presidencies (including one that lasted two months) paved the way for a long term relationship with the fanciest dictator the country ever had: Antonio Guzmán Blanco.


Antonio Guzmán Blanco
ruled the country three times (1870-1877, 1879-1884, 1886-1887). He was a well educated francophile that brought some actual progress and modernity to the land, but don't let his impeccable manners fool you, the guy was a dictator (think Django Unchained's Monsieur Candie meets The Hunger Games' President Snow). After almost two decades of playing tennis (Venezuela being the ball), he voluntarily exiled to Paris where he lived in luxury for the rest of his life.
After that, another round of forgettable wannabes took turns to see if they could open the jar (Venezuela being the jar). This loosened it up for a new dictator to come along and take all the pickles.
Juan Vicente Gómez, took over after a coup d'etat in 1908 and ruled directly or indirectly (through puppet presidents in between his three terms) until 1935. That is 27 years. Unlike his fancy predecessor, Gómez was what some would call a hillbilly (unsophisticated country person). A very hateful, authoritarian, bloodthirsty hillbilly.
Did I mentioned oil was discovered early on during his presidency? This is important because he conceded exploring and drilling permits to all his friends, who went on to pass them to foreign companies. In 1914, in the western city of Maracaibo, they discovered the first important oilfield and ten minutes later, we were all playing baseball and drinking Coca-Cola.
Oil became so important and profitable that there was no point in working the land any more, and quickly, coffee and cocoa -the two main sources of income until then- were replaced completely for the new toxic black liquid in town (the oil, not the Coca-Cola).
Country folks left their farms in large numbers looking for a better life in the big cities and people came from all over the world to get their piece of the cake. But life in the city wasn't kind to everyone and many families started settling in slums in the outskirts where they could be conveniently ignored for decades. We'll come to them later.
In 1935, when Gómez retired from dictatorship (because he died), we decided to give a go at this thing called democracy, and what better way to start it than with another coup d'etat? It happened in 1945 and the promise was that fair and free elections would be held soon. Three years later, that actually happened and everyone was very happy (I bet you didn't see that coming, did you?).
Also, World War Two was over and lots of European refugees moved to the country, bringing their expertise and culture to the mix. I will add here that they were received with open arms and welcomed sincerely from day one (but to be fair, they learnt the language and tried their best to adapt ASAP which clearly helps).
So, peace, lots of money coming in, people voting, electricity, TV, telephone lines, the poor in slums behind the mountain growing rapidly in numbers (but we'll worry about them later). The fruit was ripe for another dictator to take a bite.


In 1952, yet another coup d'etat left the country in the hands of a military junta lead by General Marcos Pérez Jiménez who soon proceeded to name General Marcos Pérez Jiménez as "provisional" President of Venezuela.
Like all Stockholm Syndrome victims, many Venezuelans remember him with fondness. How could you not? A guy that built the hospitals, paid the debts and actually invested more than he stole (and he stole A LOT). The same guy that tortured the students, the journalists and everyone that didn't want him as a Big Brother. Again, how could you not love him? You had to. A lot. Or else.

Guess what happened on January 23rd, 1958?
a) Marcos Pérez Jiménez said he was tired and retired to the French Alps to become a cheese maker.
b) Marcos Pérez Jiménez was visited by the three ghosts of Christmas and became a nice guy.
c) A Coup d'etat.

Surprisingly, the answer is "C". Although he did retire in Europe, and lived in Spain until dying from a heart attack in 2001.

At this point, the leaders of the biggest political parties at the time decided to gather and make an agreement to strengthen democracy, known as the Pacto de Punto Fijo. Representatives of AD (the white ones), COPEI (the green ones) and URD (the yellow ones) were the signatories. PVC (the red ones, because of its banner's colours but also because they were openly communists) were excluded.
This omission was as smart as that time when the Queen and the King forgot to invite Maleficent to their welcome-baby-princess party. But they'd have time to worry about the spinning wheel cursed with the socialists' resentment later.

So you didn't invite the commies to your party? They'll remember

Now it seemed like things were back on track.
Yes, there was corruption and stealing, but schools were being built, industry was booming and the middle class was able to go a few times a year to Miami for holidays and shopping. The white party ones and the green party ones were basically taking turns in the big chair, and a never ending supply of black gold coming from the ground paid for all the extravagance.
By the early eighties, there was a lot of money coming in, but the debt was so unbelievably large that on February the 18th of 1983 President Luis Herrera Campins declared a severe devaluation of the currency (Bolivar) in what is known as Viernes Negro (Black Friday, not related to the American shopping frenzy of the same name).
A drastic drop in oil prices, the country's only important export, tied together with a now unmanageable debt, brought an unprecedented economic crisis, which meant no more dinners in the States for the middle class, and no more dinners in general for the poor (but again, let's not care about them for now, after all, they're quiet and don't even have the habit of voting).
After years of denial, the President Carlos Andrés Pérez decided to introduce some very unpopular measures in 1989 and it finally hit the fan.
Named El Caracazo, a series of protests that lead to riots which turned into looting and then shootings, and ended up in a massacre (no official death toll but some say hundreds, some argue thousands), begun on February 27th 1989 and lasted for a week. It was eventually contained but the country was shaken and the stability gained in the Pacto de Punto Fijo questioned for the first time.
Suddenly, everyone noticed that there were lots of poor people, angry, ignored and fed up. And they've had children and grandchildren in the slums who were also sick of it.
Guess what happened in 1992? Oh yes, another Coup d'etat. But this one failed and Hugo Chávez (the name might ring a bell, does it?), one of the organizers and leaders of it, was found guilty of sedition and incarcerated.

Now move forward to 1994. The people were disappointed, getting poorer by the day and faith in the usual tennis players was gone. Then along comes this old school politician named Rafael Caldera (and by old school I mean the guy was born in 1916, he actually was alive during Juan Vicente Gómez's dictatorship and World War I) and he appealed to the underdog, the people sick of the corrupt parties (like the one that had supported his first presidency a few decades ago, but he didn't mention that of course). He was the first President to win an election with the support of a small independent party and one of his most remembered decisions was to set Hugo Chávez free, and provide an official pardon for his conspiracy.
That way, Chávez was now able to form another independent political party, the heir of the red one that once got ignored when the powerful white, green and yellow divided the treasure. Gathering massive support from all the resentful and until then ignored poor people and a lot of jaded middle class that truly longed for change, he won by a large majority in 1998.
If this was a fairy tale, that would have been the moment in which the princess finally touched the spinning wheel, after years of a latent curse waiting to be unleashed. Only that instead of falling asleep, the princess went completely insane.


I could get lazy here and just copy-paste a summary of Animal Farm, but if you've gotten this far, you deserve better (or if you skipped all the other chapters and are in for the current stuff as well).
It was 1999 and everyone was partying like it was 1999. A new Constitution was approved and oil prices were looking well.
The country's poor, who had never had anything, suddenly had this guy speaking to them, telling them that being poor was OK, and that the State would help them. Suddenly there were literacy campaigns and emergency health services in the heart of the slums. Trucks with fresh food would go and sell them stuff at subsidized prices. It was wonderful, and the infinite money from the oil was financing everything.
Oh wait... now he's not only giving stuff for free to the poor, now he's building hospitals in other countries. Did you hear that we'll give oil to Cuba in exchange of sugar instead of money? Such a nice guy, right?
Well, business owners and tax payers would rather the money to be invested in progress (and of course, to profit in the process, can you blame them?), not just given away. Also, he approved a bunch of leftist laws that put pressure in the private sector.
So, in 2002, opposition leaders organised a general strike with the objective to push him to change legislation or demand his resignation. There were protests, shootings and deaths. PDVSA, the country's company in charge of all things oil, was part of the strike.
This is a company with thousands of staff, bringing billions into the country. So you can imagine Chávez's face when they were rebelling. The strike turned into an attempted coup d'etat but it eventually failed.
Time for retaliation: first PDVSA's directive board got fired (these were people with 30+ years experience in the oil industry), then the middle management, then normal staff. A total of about 18,000 highly skilled workers lost their jobs. The top seats were replaced with government sympathizers who didn't really know who to run a company. The rest, with whatever they could find.
The say that the most profitable business is a well run oil company, the second best is a poorly run oil company. So money kept flowing. But for some odd reason, international companies began to wonder if this was a stable place to invest in. Private investors too, and soon, loads of people began taking their cash out, and in a very short time, the country experienced a massive capital outflow.
To counteract this, in 2003, a currency exchange control was established. They named it CADIVI.
Under it, it became illegal for a person or company to exchange Bolivars into Dollars or any other foreign currency without the government's authorization. This, they said, would stop the financial bleeding and keep the money home.
So, in a country where practically the only thing produced is oil, those who got permission to exchange currency were the only ones able to import basic goods, The official exchange rate was one, but soon a black market started growing, in which the value of dollars was several times the one officially recognised.
This motivated thousands of people to apply for currency exchange approval (the easiest process was if you applied for personal cash to travel abroad). Once the exchange was approved, many would get their dollars and instead of using them for what they said they would, they sold them in the black market (remember, not everyone got their exchange application approved, but everyone needed to exchange, so cash passed hands under the table, at a very high margin for some lucky ones).
So, a savvy corrupt person could do this several times and multiply their capital without producing a thing. The ultimate fraud. And if they had the right contact, they could get away with growing fortunes overnight.
Lots of people became absurdly rich in a matter of months.
So, instead of keeping the money in the country, this made things worse.
But hey, it doesn't matter if the money goes down the drain, we have a magical cash fountain, don't we? Besides, the poor -a conveniently growing group that would be happy with very little and in return keep voting for the hand that feeds- were happy and didn't care about exchange rates and trips to Miami they never had anyway.
And just to make sure people don't protest so easily, let's play blind eye to muggers and robbers. No one will hold signs when the sun goes down if they are in fear.
It's 2006, Chavez got re-elected for a new presidential period (in fairness he still was wildly popular) and the media is becoming more and more annoying at denouncing the alleged rampant corruption. The solution? It's time for some good old-fashioned censorship laws. Hence, the RESORTE law was born and with it, radios and TV stations and newspapers got harassed and fined constantly. We have to protect the children from that dreadful sex and violence right? In fact, let's ban war-inspired toys.
What about banning guns? Nah, just toy guns, that will do. To make an example, in 2008 the biggest opposition TV channel was closed.
At this point the opposition moral was below zero and he basically was free to continue with his socialist project. He had the time, he had all the money in the world, he had the support...
But if you don't invest, eventually things will start to fall apart. Infrastructure was collapsing everywhere, universities funding being cut (especially in opposition friendly ones), urban guerrilla groups that were armed with the intention of intimidating and controlling surprisingly became rogue and overpowered the police. Add the global financial crisis to the mix and you'll enter a new decade as a complete mess.
At this point, around 2011, CADIVI, the exchange control had become an abomination and while creating barriers for people that were legitimately in need to leave the country (i.e. to study or for a medical procedure), it was an incubator for mafias.
The solution? To print new money, which as anyone with a minimum understanding of economics will know, lead to a super inflation spiral.
So now it's 2012, time for new elections. Thanks to a series of tweaks in the law, Chávez can run for president a third time. It would be for the 2013-2019 period. But should he? I mean he's not looking well. Some say he's very ill.
With only rumours coming and going, and strong defamation laws that would put in a very tricky place to those pointing out that the emperor was sick, Chávez's disease became the constant gossip, but no one was officially sure of what was going on.
Luckily for him, his close friends helped him rule the country, especially Diosdado Cabello and Nicolás Maduro, loyal by his side at every moment of his convalescence.
Then the truth came out. It was cancer. A very serious one.
The opposition encountered that fighting him was now even harder: the guy was giving his last breath for the country. His health became part of the campaign, basically voters were being pushed to fulfill his last wish, and the contender's lack of rapport with the masses only helped him. He won by a close call (55%) and died a few weeks later.
Then his loyal colleague Nicolás Maduro was trusted with conducting the country. Some say it was a good match as his main previous experience had been as a bus driver. An election was organised as soon as possible, while Chávez charisma still could cover him, and he won with 50,6% of the votes.
Overwhelming majority, he advertised.
Now, like him or not, Chávez had been able to keep the show running mixing charisma, intimidation and giving the right present to the right person at the right time. But it takes skill to be a democratically elected autocrat and Maduro was miles away from his predecessor.
It was 2013 and in a matter of months, the oil prices went to the dogs. That meant that the overly generous budget which was created on the principle of record-high oil prices now would have to be readjusted to a tenth or so.
How can you explain to the poor that their free fridges, laptops and more were now a thing of the past? How can you continue importing food when there are no more dollars left and no country would give you credit because everyone knows you can't pay? How can you put medicine in the hospitals if the little income you're making is reserved to keep the mafias that hold you into power happy?
Shortages that some like to compare to those in Soviet Russia became usual. Plane tickets a luxury so big that most people got trapped in the country, priced out of travelling. The rampant crime made escaping through the border a suicidal fantasy. And those that had a few savings bought the last plane tickets and left.
As if that wasn't enough, drought and lack of investment lead to the hydroelectric plants to under perform, and the solution to it was to order everyone to use less electricity. Water services are also suffering and it is not uncommon that residential areas have water supply cuts that lasts days, sometimes weeks.
As for the lack of food? Rationing.
Lack of medicine? Survival of the healthy, heartbreakingly.
And as everything collapses, the police is nowhere to be seen, so more and more people resort to crime, after all, there's no consequence.
But wait, your everyday folks get sick of it too, and decided that, if there is no justice, they'll take things in their own hands, so public lynching becomes more and more common. There have been reports of people stabbed and burned alive in plain daylight, on busy side-walks, even innocent people have accidentally received this treatment.

Some people argue that a recently elected opposition-led parliament will bring some balance and at least contain the chaos and slowly help stabilise things. Some say that parliament is not enough, and in fact many will be quickly bought off. We'll have to wait and see.
Anyhow, as kids born in 1998 are now of voting age and have never known a country without Chávez or his "legacy", lots of them brainwashed since kinder-garden, many of their parents brainwashed since high school, it will be extremely unlikely that the knot will untie any time soon.
Many people have lost their will to produce, and even to work at all, as salaries are so miserable that, counted in the black market rate -still existent and going strong- puts almost everyone below the extreme poverty line (less than 1$ a day). However, if you ask for an official figure, they'll say it's the country with the highest salaries in South America (just don't mind the fact that everything is imported in dollars but people get paid in Bolivars).
But yes, there is always hope. Japan stood back up after two nuclear bombs, Ireland recovered after a devastating famine, many European countries rebuilt after two World Wars.
This is a mess we got ourselves into, and only ourselves will be able to solve it. If anything becomes clear to me after attempting to summarize my country's history is that:

  • Every time you try to rule excluding or ignoring a part of the population, they eventually show up and bite you.
  • Every time you take power by force, it ends up being taken from you the same way.
  • You can't rely in only one product with no added value and a price that changes without your control.
  • Glorifying autocrats is a bad habit that we drag from colonial times and only when we stop doing that, we might get a chance at a proper democrat.
  • Venezuelans have impressive patience, and are able to adapt to everything, which is not necessarily something that favours us.


Luis Ricardo Suárez Baute said...

Well done Gaby...

Unknown said...

A summary pretty well written with a sense of humor which characterizes Venezuelan people.

Karina Flores said...

A summary pretty well written with a sense of humor which characterizes Venezuelan people.