Commentary: “Motherland, socialism, or death," was changed in 2012 to "Motherland and socialism. We will live, and we will come out victorious." The tweaking in this political slogan in 2012 was one of the final acts of Venezuelan President Hugo Chavez in attempting to restamp his Bolivarian Revolution (named after 19th century Venezuelan revolutionary Simon Bolivar) before he succumbed to cancer the following year.
It’s been nearly twenty years since I traveled and did business in Venezuela, but I remember the country and the people well, both having been seared into my brain. As I traveled to the country, I didn’t know what to expect. I landed, hailed a taxi, and was off for the long ride to the luxurious Hotel Tamanaco Intercontinental. What I saw was disturbing. We passed some of the most abject poverty I had seen anywhere in the world, with people living in cardboard shacks, and shirtless children playing in trash by the side of the road. This hellish scene changed as we approached the hotel and the city’s modern financial/commercial district at the base of Avila Mountain. It seemed that we had entered another country.
Upon checking in, I was warned that as a foreigner, I should probably stay on the hotel premises, and that everything I needed would be provided to me. This struck me as odd and being headstrong, I promptly arranged for a taxi to take me and my business partner to an Italian restaurant a couple of miles from the hotel – Big mistake. On the way back from the meal, the taxi driver, who had an uncanny resemblance to Italian fascist Benito Mussolini, talked to us about how hard life was in Venezuela, and how society has stratified into the “haves” and “have nots.” He was so focused on getting his point across to us that he took his eyes off the road, and we t-boned a bus, whose driver quickly exited with a crowbar, threatening to kill the taxi driver.
As we stood in the street watching this scene, the taxi driver excitedly told us to leave before the police came. We promptly obliged, and off we were in a strange country in which we were told not to wander from the hotel. We eventually managed to walk back to the hotel, but not after going through some very sketchy neighborhoods with some horrible blight. The next day, we went to the U.S. Embassy to meet with the commercial officer to seek advice on our project. This was the only commercial officer I have ever met who asked why we were in Venezuela, and strongly told us that we should not risk ourselves by trying to do business there. The feeling of tension and despair among the Venezuelans we met was real, and this was before the economic crisis that has been sweeping the nation since the end of Chavez’s reign.
And now, six years later, Chavez is still affecting Venezuelan citizens from the grave. As a populist, he believed in a strong central government, that through his Bolivarian Revolution, would get rid of poverty in the country, and produce a more egalitarian citizenry. Regarded by many as an outright dictatorship, the Chavez regime proceeded to nationalize industry, launch social programs to attack poverty, and to promote the equitable distribution of land. Chavez went as far as to propose utopian communes and cities. With an estimated 303 billion barrels, this country has the largest oil reserves in the world. Because oil prices were high and Venezuela is reliant on this abundant resource, Chavez had a lot of money to play with.
But as is the case with countries with non-diversified economies reliant on one major commodity, oil prices came down, the country started experiencing distortions in its economy, and the cracks started to appear at the time of Chavez’s death. Replacing him was Nicolas Maduro, one of his long-time administrators. Maduro continued Chavez’s policies, and today millions are struggling to find basic foodstuffs and rudimentary supplies. Educated Venezuelans, including engineers and doctors, are fleeing the country in search of work elsewhere, further exacerbating the crisis.
In addition to the economic crisis, a constitutional crisis surrounding Maduro’s powers ensued in 2017, further spreading instability in the country. As the owner of both crises, Maduro was strongly urged to resign after his term expired on January 10, 2019. He did not, and the country’s National Assembly elected Juan Gauido as the nation’s interim president. Several nations, including the U.S., rushed to recognize him as the legitimate president. At present, the struggle and uncertainty continues as to who is in control and who is legitimately in power.
When I read stories on Venezuelan stores with their shelves empty and people not having enough money to buy food, even if it were abundantly available, I think of my short time in that country. I wonder about our kind taxi driver who got us into a wreck, and who was struggling back then to make ends meet. If he is still alive, what financial condition is he in? Does he have enough money to buy gas to operate his taxi?
Time and time again, centralized governments attempting to run socialized economies in Latin American and throughout the world have failed. No government is more capable than a free market in the allocation of resources throughout the economy. Venezuela is a stark lesson in this reality. The “We will live” part of Chavez’s changed slogan can now be changed to, “We will live if we are lucky enough to survive the motherland and socialism.”
Jerry Pacheco is Executive Director of the International Business Accelerator, a non-profit trade counseling program of the New Mexico Small Business Development Centers Network, and the President/CEO of the Border Industrial Association. He can be reached at 575-589-2200 or jerry@nmiba.com