Economic and social consequences of left populist rule in Venezuela in the first decades of the XXI century

Study of features of the economic and social policy of the ruling circles of Venezuela. The complete failure of another experiment aimed at building an "ideal society" in Venezuela, the growth of crime and the degradation of public consciousness.

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Kamianets-Podilskyi National Ivan Ohiienko University, 14 Tatars'ka Street, Kamianets-Podilskyi, index 32301, Ukraine

Economic and social consequences of left populist rule in Venezuela in the first decades of the XXI century

Opria Ihor

Candidate of Historical Sciences

Associate Professor, Department of World History

Abstract

The purpose of the article is to determine the economic and social consequences of the rule of left populists in Venezuela in the first decades of the ХХІ century. The research methodology is based on the principles of historicism, objectivity, integrity, and systematics. The methods of analysis and synthesis, generalization, comparison are used in the work. The scientific novelty lies in the fact that the features of the economic and social policy of the ruling circles of Venezuela over the past twenty years were investigated. It was found that despite the loud statements of the authorities about overcoming poverty, social inequality, corruption, and scarcity, all these phenomena did not disappear, but in most cases, it was the bad policy of the populists that led to the aggravation of the mentioned problems. Conclusions. As a result of the research, it became clear that another experiment aimed at building an “ideal society” in Venezuela turned into a complete failure. In one of the world's richest countries in oil resources, there is a shortage of products, essential goods, and medicines. At the same time, instead of social harmony in the country, there is a significant increase in crime and degradation of public consciousness, which is characterized by the perception of murders and robberies as common elements of everyday life. In world history, there were many examples when the ruling circles of the country, in extreme manifestations of populism, began to set maximum prices for food and basic necessities. Always and everywhere, these measures led to the same result - the disappearance of goods from sale and the formation of a “black market”. At the same time, these difficulties of an economic nature brought unexpected bonuses and advantage to the ruling elite. The search for internal and external enemies began, and an ideological campaign was launched, directed against representatives of medium and small businesses, who actually were the producers of the goods the country needed. The government, which led to an economic crisis and a shortage of products, declared itself the only savior of the people. Such a picture is observed in modern Venezuela, where official propaganda, despite the obvious miscalculations of the government, considers Hugo Chavez and Nicolas Maduro to be the “saviors of the nation”.

Key words: Venezuela, Hugo Chavez, Nicolas Maduro, populism, deficit, inflation, crime.

Опря Ігор - кандидат історичних наук, доцент, доцент кафедри всесвітньої історії Кам'янець-Подільського національного університету імені Івана Огієнка, вул. Татарська, 14, м. Кам'янець-Подільський, індекс 32301, Україна

Економічні та соціальні наслідки правління лівих популістів у Венесуелі у перші десятиліття ХХІ ст.

Анотація

ruling circle ideal society

Мета роботи - визначити економічні й соціальні наслідки правління лівих популістів у Венесуелі у перші десятиліття ХХІ ст. Методологія дослідження ґрунтується на принципах історизму, об'єктивності, цілісності та системності. У роботі використано методи аналізу та синтезу, узагальнення та порівняння. Наукова новизна полягає у тому, що було досліджено риси економічної та соціальної політики правлячих кіл Венесуели за більш ніж двадцять останніх років та з'ясовано, що попри гучні заяви влади про подолання бідності, соціальної нерівності, корупції та дефіциту усі ці явища не зникли, а в більшості випадків саме недолуга політика популістів призвела до загострення зазначених проблем. Висновки. В результаті дослідження з'ясовано, що черговий експеримент, спрямований на побудову «ідеального суспільства» у Венесуелі, обернувся повним провалом. В одній з найбагатших на нафтові ресурси країн світу виник дефіцит продуктів, товарів першої необхідності, ліків. Водночас, замість соціальної злагоди в країні спостерігається істотне зростання злочинності та деградація суспільної свідомості, ознакою чого стало сприйняття вбивства та пограбування як звичної складової щоденного життя. У світовій історії було чимало прикладів, коли правлячі кола країни у крайніх проявах популізму починали встановлювати максимуми цін на їжу та товари першої необхідності. Завжди і скрізь ці заходи призводили до однакового результату - зникнення товарів з продажу та формування «чорного ринку». Водночас, ці труднощі економічного характеру приносили правлячій верхівці й несподівані бонуси та важелі впливу. Розпочинався пошук внутрішніх і зовнішніх ворогів, розгорталася ідеологічна кампанія, спрямована проти представників середнього та дрібного бізнесу, які власне і були виробниками таких необхідних країні товарів. Влада, яка призвела до економічної кризи та нестачі продуктів, оголошувала себе єдиним рятівником народу. Така картина й спостерігається у сучасній Венесуелі, де офіційна пропаганда попри очевидні прорахунки влади вважає Уго Чавеса та Ніколаса Мадуро «рятівники нації».

Ключові слова: Венесуела, Уго Чавес, Ніколас Мадуро, популізм, дефіцит, інфляція, злочинність.

Problem statement

Since the beginning of the XXI century among the news from Latin America, information about the relatively small country of the region - Venezuela - occupies a prominent place. To a large extent, this was due to the policies of an extravagant and charismatic personality - Hugo Chavez, who was the country's president for a little more than 14 years (until his death in March 2013), and his successor Nicolas Maduro, who is still in power today, although his current rule is considered illegitimate by most democratic world countries.

After winning the presidential elections in December 1998, Hugo Chavez began large-scale transformations in the country, the goal of which was to build a new just society without poverty, crime, corruption, and oligarchs. In foreign policy, the new president has taken an openly anti-American position, constantly blaming the power and financial circles of the United States for the problems of Venezuela and all of Latin America. The last aspect impressed the leadership of the Russian Federation, and therefore in modern Russian historiography, a favorable assessment of Hugo Chavez's activities prevails. However, the empty shelves of Venezuelan stores and the huge queues for food and necessities, inflation, and rising crime best demonstrate the real achievements of the “new order”. These and other social problems are especially striking against the background of the huge oil reserves that Venezuela possesses. Therefore, the importance of researching the topic is due to the need to debunk the myth of a successful social experiment carried out by Hugo Chavez and Nicolas Maduro, and to determine the real consequences of their policies in the economic and social spheres.

Analysis of sources and historiography

The assessment of the consequences of the populist regimes of Hugo Chavez and Nicolas Maduro in historiography is far from objective. It depends on the political views of the authors of the studies. Russian authors are particularly biased and complimentary about the activities of Venezuelan leaders. To be sure of this, it is enough to cite only the titles of some articles: “Russian scientists on the Chavez phenomenon” (Khachaturov, 2003), “Hugo Chavez never lost” (Dabagyan, 2013), “Social policy of Hugo Chavez” (Khimchenko, 2007), “Hugo Chavez: man, revolutionary, politician” (Chelyadinskiy, 2014), etc. In Ukrainian historiography, the politics of Hugo Chavez and his successor are only fragmentarily reflected in the scientific works of A. Kyridon, O. Aladina, O. Huseynova (Kyrydon, Aladina, Huseinova, 2010), V. Romanyuk (Romaniuk, 2021), which necessitates further study of the topic. The materials of the periodical press, speeches, and statements of political figures, their program requirements, and statistical data posted on the pages of the periodical press, and Internet resources were the research sources.

The purpose of the article is to determine the economic and social consequences of the rule of left populists in Venezuela in the first decades of the ХХІ century.

The outline of the main material

Venezuela, like other countries dependent on production and oil sales, was seriously affected by the drop in prices for this resource in 2014-2016. However, in this country, the economic crisis, inflation, and impoverishment of the majority of the population are also accompanied by a total shortage of the most unexpected goods. One or another product regularly disappears from free sale: flour, milk, household chemicals, and medicines. Queues for toilet paper, which is sold in four rolls per hand, stretch for hundreds of meters and are regulated by armed patrols. At the same time, in state-owned stores with low prices, you can shop only twice a week: each customer's visit is recorded (Shvets, 2015). Venezuelan police officers patrolling state food stores, where goods are sold at fixed low prices, have been ordered to check the documents of buyers (Vlasti Venesuely zapretili pokupat produkty chashche dvukh raz v nedelyu, 2015). The country has already introduced cards for basic goods for the poor.

Immigration officers are also on duty at outlets to prevent food from being bought by foreigners smuggling cheap food into neighboring countries. A shortage of goods has emerged even on the black market. Law enforcement agencies are constantly on duty near shops that sell goods to the poor, out of fear of riots.

Venezuelans have to spend several hours in lines every day to buy goods such as milk or flour (Venezuela rations food as oil crisis starts to bite, 2015). The frenzy during the sale of the deficit forced local authorities to resort to various restrictions. For example, in the state of Yaracuy, it was forbidden to stand in queues at night, because its governor Julio Leon Heredia believes that speculators mainly show such activity. He wrote on his Twitter: “Yesterday, after studying numerous complaints from the population, I ordered to prohibit people from spending the night near trading points” (Vlasti Venesuely zapretili pokupat produkty chashche dvukh raz v nedelyu, 2015). In December 2015, the head of the Venezuelan Federation of Pharmacists, Freddie Ceballos, accused the country's authorities of an acute shortage of medicines in the country. In an interview with the private radio station Union Radio on Monday, December 14, he said that the shortage of medicines in the country is about 70% (V Venesuele voznik defitsit lekarstv, 2015).

Supporters of Hugo Chavez point out that the country's current predicament is caused by a combination of unfavorable factors: firstly, N. Maduro as president does not have such bright personal features as Hugo Chavez, secondly, the drop in oil prices caused a general crisis, thirdly, and most importantly, it is the “planned economic war” of the United States against Venezuela.

In fact, the shortage of goods is a direct result of the policy of the previous president aimed at limiting market relations and creating a so-called “fair economy”, when the state determines how much of a particular product is needed and at what prices it must be sold. Already in the middle of the first decade of the 21st century, the Venezuelan writer and publicist Americo Martin noted that the result of such a policy would be the complete destruction not only of the sphere of production and services but also of oil production - the main branch of the Venezuelan economy (Martin, 2007, p. 200). Moreover, the country's economic problems were already evident when oil prices were steadily rising. During 2006-2007, the functioning of health care systems, primary and secondary education, housing construction, food supply, land redistribution, population employment, creation of cooperatives, etc., deteriorated.

Thus, in November and December 2007, it was impossible to get fresh milk and it was very difficult to find a number of basic products (Kolarov, 2013, p. 40).

At the beginning of 2007, Hugo Chavez declared the need to move more actively on the path of building “21st-century socialism”, and the “obedient” parliament granted him “extended” powers. He concentrated in his hands the levers of executive, legislative and judicial power and got the opportunity to rule the country with the help of decrees, which he himself issued.

The Venezuelan economy increasingly acquired collectivist features, which were manifested in the elimination of the autonomy of the Central Bank, the establishment of an upper-profit limit of 10% for the private sector, the legalization of the so-called “communal groups”, which were supposed to control the activities of enterprises, including small and medium ones (Martin, 2007, p. 200). The result of these and similar steps was a drop in labor productivity, capital flight, a crisis in the private sector, and, naturally, a shortage of necessities.

The current government in Venezuela, on the one hand, assures citizens that the situation remains under control. The head of the national food security service, Carlos Osorio, says that long queues indicate food diversity and abundance. Speaking on state television, he said: “If there was no food in Venezuela, there would be no queues like we see here. We would not have gathered so many people in these institutions. This is the best demonstration of what we have” (Vlasti Venesuely za- pretili pokupat produkty chashche dvukh raz v nedelyu, 2015).

On the other hand, the United States and local entrepreneurs were blamed for the deficit. The country's president, Nicolas Maduro, called the decline in the price of oil, from the export of which Caracas receives 95% of its foreign exchange earnings, an “economic war” unleashed by the United States. But if the “people's power of Venezuela” cannot oppose the United States, then the local “speculators” were demonstrably punished. “The owners of a well-known chain of stores were in a conspiracy against the people. I warn: those who use their stores to harm Venezuelans will be held accountable according to the law,” President Nicolas Maduro threatened. Several supermarket owners were sent to prison. Shops belonging to the repressed were nationalized. However, this did not solve the problem of goods shortage (Venesuela vstala v gigantskuyu cohered, 2015).

The fact that the shortage of goods in the country was accompanied by hyperinflation also increases social tension in society. That is, the necessary goods are becoming less and less, and the already small savings of citizens depreciate every day. The last thesis is not an exaggeration. After all, according to the National Assembly of Venezuela, which is under the control of the opposition, the inflation rate reached 1,300,000% in the 12 months from November 2017 to November 2018. By the end of 2017, prices doubled on average every 19 days (Naskilky vse pohano u Venesueli, 2019). Several times the authorities carried out denomination, i.e. took away several zeros from the existing bills, but this did not have any positive effect. In March 2021, the country put into circulation the new largest bill of 1 million bolivars, however, its value was only 53 US cents (U Venesueli vvedut banknoty v 1 milion bolivariv, 2021).

An important negative consequence of the economic crisis was the moral degradation of society and an increase in the level of crime in this Latin American country. The United Nations and a number of other international organizations, which collect and publish data on the level of crime in the world, record a significant increase in crime in Venezuela and explain this phenomenon to the political and economic situation in the country. The number of crimes in the country increased dramatically during the presidency of Hugo Chavez, and at the time of his death in 2013, Venezuela was called one of the most dangerous countries in the world (Latin America Scores Lowest on Security, 2014). This negative trend is also observed under the rule of Hugo Chavez's successor, President Nicolas Maduro, who continued Hugo Chavez's economic experiments.

According to the results of a survey of the local population, the problem of increasing crime ranks second for them after the problem of shortage of products and essential goods (Pardo, 2015). Moreover, the absolute majority of all crimes in Venezuela remain unpunished, and, according to official data, 98% of crimes in Venezuela do not lead to prosecution (Camacho, 2017). Experts associate this situation with the police reforms carried out during the time of Hugo Chavez. He believed that high crime is a social problem, a peculiar remnant of the previous regime, and therefore, in order to overcome crime, the police should switch from a punitive function to an educational one.

Petty crime and pickpocketing are common in the country, especially in public transport. Polls conducted in 2014 showed that only 19% of Venezuelans felt safe when they had to walk alone at night, and almost a quarter of respondents said that they or a member of their family had lost money as a result of theft in the past year (Latin America Scores Lowest on Security, 2014).

As Venezuelans suffer from shortages of food and necessities, robberies of commercial trucks and stores are becoming common. During one such incident, hundreds of men, women, and children robbed a car (Camacho, 2017). According to BBC News, in connection with the general shortage in Venezuela, a video appears every week that captures the collective looting of supermarkets and food trucks by Venezuelans (How videos of supermarket raids show what life is like in Venezuela, 2015). In June 2016, it was reported that a curfew had been imposed in the city of Kuman following an outbreak of mass looting (Venezuelan city under effective curfew after mass looting, 2016).

Murders and violent crimes are reaching epidemic proportions in the country. In the period from the 1960s to the end of the 1980s, the murder rate was 8-10 cases per year per 100,000 people, which corresponds to a moderate level of crime (Briceno-Leon, 2012). After the attempted coup d'etat in 1992, this indicator gradually increased, and with the coming to power of Hugo Chavez in 1999, the situation worsened even more.

The new president said that violence and crime were caused by poverty and inequality, and while the authorities consistently reported a reduction in these negative phenomena over the following years, the rate of violent crime and murder instead continued to rise steadily. In just four years, the number of murders increased from 25 cases per 100,000 people in 1999 to 44 cases per 100,000 in 2003 (Briceno- Leon, 2012). However, modern data significantly exceed these indicators: in 2015, 90 cases of murder per 100,000 people were recorded, and in 2016 - 91.8 cases per 100,000 people, and in the capital, Caracas, this indicator is based varies according to the data, 130 to 160 people are estimated. For comparison, in the USA, this indicator is less than 5 cases per 100,000 people. In general, 27,875 people were murdered in 2015, and 28,479 people were killed in 2016 (Venezuela Set for Murderous, 2017) in a country with a population of about 30 million people. Such losses can be compared only with the losses of a country conducting military operations.

Hugo Chavez and Nicolas Maduro have made constant claims of fighting crime, but their moves have been inconsistent and often counterproductive. First of all the ranks of criminals are replenished by people from the marginal strata of society, who at the same time form the basis of electoral support for the government, which is why the government makes concessions to them. Unemployment benefits in the country are higher than the minimum wage, so a large part of the poor prefers not to work, receive social security from the state, and engage in criminal activities in their free time. Moreover, by taking property from those who are richer than they are, the poor “as they think” establish social justice, which they hear so much about on TV screens. In this regard, kidnapping for ransom is a common type of criminal income in the country. Moreover, if earlier the victims of this type of crime were wealthy people, now anyone can become a victim (Killalea, 2013).

The increase in homicides and violent crimes in Venezuela is also attributed by experts to corruption in the Venezuelan government, poor gun control, and the shortcomings of the judicial system. A high level of corruption also exists in law enforcement agencies. Many victims are afraid to report crimes to the police because some employees are involved in crimes with criminals. According to sociological surveys, only one-fourth of Venezuelans trust the police, the majority believe that “the police more likely will rob you than will help” (Beckhusen, 2014).

Conclusions

As a result of the research, it became clear that another experiment aimed at building an “ideal society” in Venezuela turned into a complete failure. In one of the world's richest countries in oil resources, there is a shortage of products, essential goods, and medicines. At the same time, instead of social harmony in the country, there is a significant increase in crime and the degradation of public consciousness, which is characterized by the perception of murder and robbery as a regular part of everyday life. In world history, there were many examples when the ruling circles of the country, in extreme manifestations of populism, began to set maximum prices for food and basic necessities. Always and everywhere, these measures led to the same result - the disappearance of goods from sale and the formation of a “black market”. At the same time, these difficulties of an economic nature brought unexpected bonuses and advantage to the ruling elite. The search for internal and external enemies began, and an ideological campaign was launched, directed against representatives of medium and small businesses, who actually were the producers of the goods the country needed. The government, which led to an economic crisis and a shortage of products, declared itself the only savior of the people. Such a picture is observed in modern Venezuela, where official propaganda, despite the obvious miscalculations of the government, considers Hugo Chavez and Nicolas Maduro to be the “saviors of the nation”.

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4. Dabagyan, E. (2013). Ugo Chaves nikogda ne proigryval [Hugo Chavez never lost]. Svobodnaya mysl, 2, 25-41. [in Russian].

5. Kyrydon, A., Aladina, O. & Huseinova, O. (2010). Latynska Ameryka v suchasnomu sviti: osnovni tendentsii rozvytku [Latin America in the modern world: the main trends of development]. Kyivskyi slavistychnyi universytet, 1, 142-147. [in Ukrainian].

6. Kolarov, G.I. (2013). Venesuela posle Ugo Chavesa [Venezuela after Hugo Chavez]. Nauchno-analiticheskiy zhurnal Obozrevatel. - Observer, 7, 28-44.

7. Martin, A. (2007). Kaudilo Chaves i novaya Utopiya [Caudillo Chavez and the New Utopia]. Rossiya vglobalnoypolitike, 5 (1), 195-208. [in Russian].

8. Naskilky vse pohano u Venesueli? [How bad is it in Venezuela?]. (2019). BBC News Ukraina. 05 liutoho. Retrieved from https://www.bbc.com/ukrainian/features-47108929 [in Ukrainian].

9. Romaniuk, V.O. (2021). Osoblyvosti istorychnoho rozvytku Venesuely: mynule i suchasnist [Features of the historical development of Venezuela: past and present]. Problemy vsesvitnoi istorii, 1, 107-132. [in Ukrainian].

10. U Venesueli vvedut banknoty v 1 milion bolivariv [1 million bolivar banknotes will be introduced in Venezuela]. (2021). UNIAN. Informatsiine ahentstvo. 06 bereznia. Retrieved from https://www.unian.ua/economics/finance/kriza-u-venesueli-v-obig-vvedut-banknoti-v-1-milyon-bolivariv-novini-ukrajina-11344631.html [in Ukrainian].

11. Khachaturov, K.A. (2003). Rossiyskiye uchenyye o «fenomene Chavesa» [Russian scientists about the “Chavez phenomenon”]. Latinskaya Amerika, 4, 103-104. [in Russian].

12. Khimchenko, M.N. (2007). Sotsialnaya politika Ugo Chavesa [Social policy of Hugo Chavez]. Aktualnyyeproblemy sovremennosti. Blagoveshchensk, 120-126. [in Russian].

13. Chelyadinskiy, A.A. (2014). Ugo Chaves: chelovek, revolyutsioner, politik. K 60-letiyu so dnya rozhdeniya [Hugo Chavez: man, revolutionary, politician. To the 60th birthday]. Latinskaya Amerika, 7, 35-42. [in Russian].

14. Shvets, L. (2015). Strana fashistvuyushchego defitsita. Chto obshchego u Venesuely i Rossii [A country of fascist scarcity. What do Venezuela and Russia have in common]. Fokus. 04 iyunya. Retrieved from https://focus.ua/world/330426/ [in Russian].

15. Beckhusen, R. (2014). Pro-Government Motorcycle Militias Terrorize Venezuela. War Is Boring. 22 February. Retrieved from https://warisboring.com/pro-government-motorcycle-militias-terrorize-venezuela-a9375607c800#.rxty7u182 [in English].

16. Briceno-Leon, R. (2012). Three phases of homicidal violence in Venezuela. SciELO. 17 (12). Retrieved from http://www.scielo.br/scielo.php?pid=S1413-81232012001200008&script=sci_arttext [in English].

17. Camacho, C. (2017). Hungry, desperate Venezuelans are targeting and looting food trucks. FoxNews. 1 January. Retrieved from http://www.foxnews.com/world/2015/06/05/hungry-desperate-venezuelans-are-targeting-and-looting.html [in English].

18. How videos of supermarket raids show what life is like in Venezuela. (2015). BBC News. 13 July. Retrieved from http://www.bbc.com/news/blogs-trending-33483653 [in English].

19. Killalea, D. (2013). Welcome to Venezuela, the kidnap capital of the world. News.com. 13 November. Retrieved from http://www.news.com.au/welcome-to-venezuela-the-kidnap-capital-of-the-world/news-story/08db68fccf724eb374b6a5255ef54ede [in English].

20. Latin America Scores Lowest on Security. (2014). Gallup. 19 August. Retrieved from http://www.gallup.com/poll/175082/latin-america-scores-lowest-security.aspx [in English].

21. Pardo, D. (2015). Why Venezuelans worry more about food than crime. BBC News. 27 May. Retrieved from http://www.bbc.com/news/world-latin-america-32703081 [in English].

22. Venezuela rations food as oil crisis starts to bite. (2015). The Time. 15 January. Retrieved from http://www.thetimes.co.uk/tto/news/world/americas/article4323416.ece [in English].

23. Venezuela Set for Murderous. (2017). InSight Crime. 08 January. Retrieved from http:// www.insightcrime.org/news-briefs/venezuela-set-for-murderous-2017 [in English].

24. Venezuelan city under effective curfew after mass looting. (2016). The Guardian. 15 June. Retrieved from https://www.theguardian.com/world/2016/jun/15/venezuelan-city-curfew-mass-looting-cumana [in English].

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