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Venezuela has reached its nadir Maduro's 'victory' is the shame of South America

Nicolás Maduro has betrayed his country. (Federico Parra/AFP/Getty Images)

Nicolás Maduro has betrayed his country. (Federico Parra/AFP/Getty Images)


July 30, 2024   7 mins

Yesterday, those Venezuelans who have not yet fled the country received positive proof that their democracy is dead. Exit polls in Sunday’s national election showed a resounding win for the opposition to socialist dictator Nicolás Maduro. But in today’s Venezuela, it is he who pays the salaries of the election board, the military and the police who wins. And so unsurprisingly, the “official” election results found Maduro winning a third six-year term with 51% of the vote.

Looking at a postcard of Downtown Caracas from 1980, one could be forgiven for assuming that it depicted a different city than the blighted wasteland standing in its place today. That Caracas was a city worthy of “George Washington of the South” Simón Bolívar, who a century and a half earlier had liberated his home country of Venezuela, along with much of South America, from imperial Spanish rule. It was a city of tree-lined boulevards, cosmopolitan cafes, arts and learning. Its central arts centre, the Teresa Carreño, regularly played host to Ray Charles and Luciano Pavarotti. To quote Venezuelan author Ana Teresa Torres: “You truly felt, as we used to say around here, in the first world.” And no less an authority than my mother, who grew up in Buenos Aires and visited Caracas around that time, remembers that it “felt like New York”.

It is a popular oversimplification nowadays to claim that mid-century Venezuela’s “first-world” living standards, sophistication and opulence were built on quicksand. That, like most other Opec nations, Venezuela suffered from “the resource curse” — in that its over-reliance on oil temporarily gave Venezuelans developed-country living standards without compelling the country to build the diversified economy it needed to sustain that level of wealth.

To be sure, there is something to this. The oil price shocks of the Eighties certainly did spark the death spiral that culminated in Venezuela’s collapse. Over that decade and the following one, Venezuela’s economy stagnated and unemployment and poverty increased, fuelling the discontent that would lead the country to throw it all away. But to imply that Venezuela was a mere petrostate is to grossly misrepresent reality — because Venezuela in the Eighties was on its way to figuring out something that most of today’s Middle Eastern petrostates still have not: how to use its wealth to build a broad-based, vibrant, productive mass culture.

During the Eighties and Nineties, Venezuela was the longest continually operating democracy in Latin America. Since 1958, it hosted regular, peaceful elections, and its political parties were generally moderate. Venezuela’s politics lacked the radical swings that characterised the latter half of the 20th century in most of the continent — there were no Bolsonaros or Peróns. Towards the end of the century, the country did experience rising levels of corruption at the bureaucratic level, but the democratic foundations remained.

At this time, Venezuela’s cultural exports were the envy of South America. Consider one extraordinary example: the Venezuelan national music education programme, El Sistema. Founded in 1975 by conductor José Antonio Abreu, El Sistema sought to use music as a vehicle for social uplift and general education. Its rigorous programme catered to students of all social strata, and several of its protégés ended up among the world’s top classical musicians — including Gustavo Dudamel, who was recently named the next music director of the New York Philharmonic Orchestra. Yet today, even as the memory of El Sistema continues to inspire imitators around the world, Venezuela’s own youth music programmes are in a shambles. As of 2017, a third of the members of Venezuela’s flagship Simón Bolívar Youth Orchestra had fled the country.

By the Eighties and Nineties, Venezuela’s economy was beginning to diversify — particularly into manufacturing — but it remained deeply reliant on oil revenue, and thus beholden to that market’s vicissitudes. Oil shocks begot fiscal crises and, by the Nineties, Venezuela’s economy was regularly experiencing either recession, inflation or monetary instability. Perhaps most distressingly, the country’s ability to leverage its cultural resources and high levels of education for economic growth slowed as well. According to one study carried out in 1999, Venezuelans with a 12-year education had a nearly 20% chance of ending up in poverty, up from 2.5% in 1989.

Venezuela found itself at a similar crossroads to the one Chile had faced a quarter century earlier under military dictator Augusto Pinochet. After Chile’s single-resource copper economy ceased to work, the country’s leaders worked to diversify the economy — attracting foreign manufacturing dollars and investing in agriculture, aquaculture and viniculture. These reforms — carried out, admittedly, in an environment of political repression — set the stage for 50 years of economic growth and stability.

What Venezuela needed in the Nineties — frustrated by over-reliance on oil, economic stagnation and bureaucratic corruption — was exactly what Chile had gained in the Seventies: economic leadership. Even at that late date, Venezuela enjoyed many advantages that Chile had not — a still-functioning democracy, well-developed urban areas and impressive living standards. What Venezuela needed was reform. But what it got was revolution.

“What Venezuela needed was reform. What it got was revolution.”

When Hugo Chávez took power in 1999 as a third-party president, he offered Venezuela a populist socialist platform the likes of which it had never seen. Feeding on the class resentments that had festered during the decades of fiscal crisis, Chávez promised voters a new Venezuela that would use the country’s prodigious natural resource wealth to help the poor. Rather than doing the hard work of diversifying the economy to free Venezuela from oil price fluctuations, Chávez did the opposite, increasing production and using the proceeds to set up comprehensive social welfare programmes. Helped along by favourable oil prices in 1999 and 2000, the approach worked at first, cutting poverty by 20% in only a couple of years.

But Chávez was about to demonstrate his ignorance of the petroleum industry. Around the same time that oil prices stagnated again in the early 2000s, thus requiring the country to increase production again to feed its social safety net, Chávez responded to an oil worker strike by firing most of the senior geologists at Venezuela’s state oil company. Drained of valuable expertise, Venezuela’s oil production fell. Chávez responded by nationalising foreign-owned oil reserves in Venezuela, including reserves owned by the American oil company ExxonMobil, leading multinational companies to divest from Venezuela in industries ranging from agriculture to auto manufacturing, fearing that the same fate might one day befall them. The economic vibrancy of Chávez’s first two years began to run in reverse.

Chávez’s nationalisations fit hand-in-glove with his general anti-American posture, which he also expressed through a refusal to cooperate with the US on counterterrorism and narcotics initiatives. In 2006, the George W. Bush administration imposed sanctions on Venezuela, blocking the Venezuelan state from using US financial institutions and American entities from buying Venezuelan state oil. In response, Chávez cultivated closer trading relationships with enemies of the US, including Cuba and Russia. US sanctions would later be tightened during the Obama administration in 2014 and then again during the Trump administration in 2017.

As Chávez’s popularity flagged in the late 2000s, he began altering Venezuela’s democratic political system in order to remain in power. He abolished presidential term limits, curtailed the powers of Venezuela’s supreme court and restrained the freedom of the press. Meanwhile, state oil production continued to decline — from 2.5 million barrels a day in 2005 to 500,000 by 2020 — and Chávez nationalised some 100 companies in a diverse array of industries that his government lacked the expertise to run. Predictably, both state revenues and Venezuela’s economy continued to decline.

In 2013, Chávez died. And under his successor, Nicolás Maduro, the political system Chávez had run with at least a nod to democratic forms became an unapologetic dictatorship. Elections became charades and members of the political opposition began to fear for their lives. Economically, the country became a basket case. As The Economist put it in 2014: “A big oil producer unable to pay its bills during a protracted oil-price boom is a rare beast. Thanks to colossal economic mismanagement, that is exactly what Venezuela, the world’s tenth-largest oil exporter, has become.”

As domestic manufacturing and agriculture collapsed, Venezuela’s trade imbalance yawned so widely that the country ran out of currency. Its import-reliant food supply cratered, and the Maduro government became unable to pay for the provision of basic services or to keep the peace. Crime skyrocketed across the country, and starvation reigned. Typical was the case of a music teacher quoted in The Guardian in 2018, who claimed that he had lost 8kg in a year on the “Maduro Diet”. “A litre of milk,” he said, “costs 280 soberanos, a box of eggs is 1,000, a kilo of cheese 1,000. If I buy this, that’s my whole monthly salary.”

Unsurprisingly, what started as a trickle of emigration from Venezuela in the mid-2010s has turned into a flood, as Venezuelans who could afford to leave have sought asylum in other countries, particularly neighbouring Colombia. According to the UN Refugee Agency, 20% of Venezuela’s population has now left — a total of 7.7 million people.

If Maduro’s rigged third-term victory this week is allowed to stand, Venezuela’s near future looks just as bleak. Most likely, current opposition leader Edmundo González will soon be forced to leave the country out of fear for his safety, as his predecessor Juan Guaidó did last year. In the six years before the next sham election, Venezuela’s population is projected to decline by another 10%. As they see their country trapped in the hands of the Latin incarnation of Libyan despot Muammar Gaddafi, Venezuelan exiles will put down roots in Colombia, Peru, Brazil or the US. And the most valuable natural resource underlying Venezuela’s onetime blossoming — its people — will be irretrievably lost.

For those with Latin American roots, following the region’s politics often feels like having a younger sibling who every few years falls in with the same sort of bad partner or bad crowd. For more than 50 years, we’ve watched a continent bounce like a pinball machine from extreme to extreme. One decade: the caudillo with his sky-high deficit spending, agrarian reform, industrial nationalisations, hyperinflation, mass unemployment, poverty. The next: the military junta with its extreme fiscal austerities, incarceration of political opponents, desaparecidos, autocracy, fear. From Allende to Pinochet and back again in Chile, from Bolsonaro to Lula in Brazil, from Banzer to Morales in Bolivia, from Perón to Galtieri in my family’s native Argentina.

Through it all, constant unrest, constant suffering and a gradual siphoning off of the wealth, talent and international relevance of an entire continent. For centuries, European colonisers appropriated South America’s wealth. Today, the continent gives it away voluntarily — through brain drain, corruption and an omnipresent volatility that makes any smart foreign investor think twice. But there’s always a rock bottom. And the Chávez and Maduro regimes in Venezuela have achieved it. If there can be any silver lining to the devastation wrought upon Venezuela by this duo, it is that they have finally shown Latin America its nadir.


John Masko is a journalist based in Boston, specialising in business and international politics.


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David Lindsay
David Lindsay
3 months ago

Who, exactly, are the Venezuelan opposition? What, exactly, do they want instead of Maduro? We never asked about the Kosovo “Liberation” “Army”. We never asked about the Northern Alliance. We never asked about Ahmed Chalabi, never mind about the people who really did take over Iraq. We never asked about the people who are still fighting it out, apparently without end, for control of Libya. We never asked about the rebels in Syria, right up to the point when they declared themselves to be the Islamic State. And here we are again. As much as anything else, does the opposition not lay claim to Essequibo?

Seb Dakin
Seb Dakin
3 months ago

What Maduro has achieved in Venezuela combines the two worst Latin American extremes. He’s got the historically right-wing style political repression, with the historically leftist economic incompetence.
And truly ridiculous sunglasses.

Martin M
Martin M
3 months ago
Reply to  Seb Dakin

I remember my uncle (a merchant seaman) telling me he visited Venezuela a number of times in the 1950s and 1960s. He said it was one of his favourite places in the world.

Andrew McDonald
Andrew McDonald
3 months ago
Reply to  Seb Dakin

I’m not sure that political repression is ‘historically right-wing’ – the twentieth century experience seems to overwhelmingly favour the opposite conclusion, even if you mean to restrict the claim to S American regimes.

Ethniciodo Rodenydo
Ethniciodo Rodenydo
3 months ago

So Pinochet got it right. No surprise there then

Richard Craven
Richard Craven
26 days ago

I love pointing out to my leftist friends that Mao outmurdered Pinochet by a factor of roughly 20,000 to 1.

Todd Son
Todd Son
3 months ago

Yes. It is historically right wing .

Ethniciodo Rodenydo
Ethniciodo Rodenydo
3 months ago
Reply to  Seb Dakin

And the US is any different?
Biden even had the aviators

Allison Barrows
Allison Barrows
3 months ago
Reply to  Seb Dakin

Political oppression is a left wing thing, and always has been.

Seb Dakin
Seb Dakin
3 months ago

Not sure if Pinochet realised he was left wing. Or General Galtieri. It does tend to be military regimes, as opposed to civilian, where the right wing becomes oppressive, and while I take your point that political repression tends to be a left wing thing, central and south American repression has often come from the right.

Richard Craven
Richard Craven
26 days ago
Reply to  Seb Dakin

Pinochet murdered about 3,000 people. Mao murdered about 60 million.

Bret Larson
Bret Larson
3 months ago
Reply to  Seb Dakin

“Right wing style political repression “? They have nothing compared to the likes of Stalin.

Martin M
Martin M
3 months ago
Reply to  Bret Larson

There was that German chap in the 1930s and 1940s….

Richard Craven
Richard Craven
26 days ago
Reply to  Martin M

That National Socialist chap?

John Riordan
John Riordan
3 months ago
Reply to  Seb Dakin

There is nothing identifiably right-wing about political repression, either in principle or as exemplified anywhere in Venezuela. Leftwing extreme political systems are the most oppressive examples available. What Chavez and Maduro have implemented is applied Marxism, pure and simple.

UnHerd Reader
UnHerd Reader
2 months ago
Reply to  John Riordan

Quite a pointless debate. Oppression is oppression.

Martin M
Martin M
3 months ago

Ah, Socialism. I’ve spotted their problem. I know the West imposes sanctions, but there is room for more of them, surely?

Tony Price
Tony Price
3 months ago
Reply to  Martin M

Socialism/Capitalism – both failures at their extremes – it’s getting the mix right that’s important. I can’t see how more sanctions would assist other than deepening the misery of the majority.

Norfolk Sceptic
Norfolk Sceptic
3 months ago
Reply to  Tony Price

The word you are seeking is Business. Preferably, not corrupted by politicians, the legal system or the Military.

Martin M
Martin M
3 months ago
Reply to  Tony Price

It might ultimately bring the regime down though.

Richard Craven
Richard Craven
26 days ago
Reply to  Tony Price

Capitalism with a well-endowed monopolies commission.

Jim Veenbaas
Jim Veenbaas
3 months ago

Heartbreaking to see what has happened to Venezuela. So much resource wealth; so much misery. I appreciate the author’s brief history, but I don’t agree with the premise that a petrostate is doomed financially. There are plenty of petrostates that successfully manage the ups and downs of the oil market.

Bret Larson
Bret Larson
3 months ago
Reply to  Jim Veenbaas

I don’t think you need to look further then their communist government to understand their difficulties.

Todd Son
Todd Son
3 months ago
Reply to  Bret Larson

Yeah like the CIA

Malcolm Webb
Malcolm Webb
3 months ago

Norway is possibly provides the best example of how to manage a petro economy. It has managed to maintain a strong level of private investment and to avoid splurging the taxation revenues on short term “ fixes”. Instead they have created a long sighted and sensibly organised national wealth fund. They seem to have used the oil windfall to strengthen the foundations of a secure democracy. What a shame we did not do the same in U.K. All of our £350 billion of oil taxation windfall was frittered away and our oil industry now being destroyed. We shouldn’t gloat about Venezuela’s obvious failures . We have our own.

Jim Veenbaas
Jim Veenbaas
3 months ago
Reply to  Malcolm Webb

I’m in Alberta. Our track record with oil receipts has been awful, just awful.

Bret Larson
Bret Larson
3 months ago
Reply to  Jim Veenbaas

The only problem with Albertan oil receipts is that the feds figured out how to get a choice percentage.

P Carson
P Carson
3 months ago
Reply to  Jim Veenbaas

Norway didn’t have to share the bounty with “taker” provinces east of the Ontario/Quebec border.

Norfolk Sceptic
Norfolk Sceptic
3 months ago
Reply to  Malcolm Webb

Compared to Brits, Norwegians had TEN times the oil wealth, with a very small stock market, and they didn’t start with The Winter of Discontent, with economic dysfunctionality reigning supreme. And if we had had a SWF, Brown would have spent it, long ago! 🙂

The money has been used by governments, as it always is. There’s nothing special about Oil Money: it runs out, just like any other money. You can’t spend it, and keep it in the bank as well. If you want to be taken seriously, you need to specify some of these frittering projects. And speaking of which …

As for our oil industry being destroyed: it’s what the voters wanted. They wanted to save the planet. And Ed Miliband is just the man for the job.

Malcolm Webb
Malcolm Webb
3 months ago

Wow.
Your admission that Ed Milliband is out to destroy the U.K. oil and gas industry is illuminating.
The UK’s oil taxation bonanza was akin to a massive Lottery win – and all provided by private industry investment. A succession of politicians did indeed spend all of the resulting huge additional tax revenues as quickly as they could – with no thought of putting some of it aside as a sustainable source of future wealth and income – as the Norwegians did. Curiously in a small way the Shetland Islanders did also do that and benefit from it today. However U.K. politicians spent it all . If only they had constrained their spending list and put a half or even a quarter of it aside. But they didn’t. They just taxed and then spent as much as they could – nothing new there ! It’s why Government so often reminds me of a Ponzi scheme. See also public sector pensions etc .

Norfolk Sceptic
Norfolk Sceptic
3 months ago
Reply to  Malcolm Webb

I repeat, the Norwegians had TEN times the oil wealth that the Brits had. After spending what the Brits did, the Norwegians could do it again, and again, NINE times. That’s why they have a SWF.

Why doesn’t the new UK government put all the profits from the Renewable Energy industry in a SWF? It’s supposed to be the cheapest form of Energy production, and the current prices are sky high.

Malcolm Webb
Malcolm Webb
3 months ago

Sorry relative size has nothing to do with it . U.K. politicians just didn’t want to do it. My main point is that it’s not only Venezuelan dictators who screw up an indigenous oil and gas industry. U.K. politicians did too.

Niels Georg Bach Christensen
Niels Georg Bach Christensen
3 months ago

Sorry there won’t be much profit from renewable energy for many years.

Martin M
Martin M
3 months ago

The Norwegians have so much money they can afford to sit around telling the rest of the world how green they are, what with all the electric cars they buy.

Jim Veenbaas
Jim Veenbaas
3 months ago
Reply to  Martin M

They also benefit from an energy grid that is 98% hydroelectric.

Buck Rodgers
Buck Rodgers
3 months ago
Reply to  Malcolm Webb

The U.K. has a far larger population than Norway, with far greater social problems. That’s not say the Norwegians didn’t manage it far better – whilst we stripped out and scrapped our industry, they focused on building the high-spec hardware required for harsh environment offshore drilling / production, and the innovation behind it.

Andrew F
Andrew F
3 months ago
Reply to  Malcolm Webb

You can not compare uk to Norway.
UK population is 12 times that of Norway and oil reserves much smaller.
So per head of the population uk oil wealth was probably 50 times smaller than Norway.
So uk could not possibly had created sovereign wealth found comparable to Norway on per capita basis.

Malcolm Webb
Malcolm Webb
3 months ago
Reply to  Andrew F

I didn’t suggest it would be comparable in size. I was trying to point out an opportunity lost and the general poor behaviours of U.K. politicians intent on spending all they can on the current account with no thought of building some measure of financial reserve / resilience . Just borrrow, tax and spend as much as they can. Ponzi Schemes all round!

Fredrich Nicecar
Fredrich Nicecar
3 months ago

 Ana Teresa Torres: “You truly felt, as we used to say around here, in the first world.” Except for the thousands of people living in shanty towns across the hills of the Caracas valley that I witnessed during a number of trips I took there between 1977 and 1980.

Andrew F
Andrew F
3 months ago

Yes, that little detail was missing from the article.
I remember talking to rich Brazilians in 80s London.
They called their country Belinda.
Why?
Because 20% had standard of living of Belgium and the rest of India.

Miriam Cotton
Miriam Cotton
3 months ago

Well will you look at that! Yet another oil rich country with an evil dictator that we simply have to do something about! Saudi Arabia anyone? Can anyone supply hard, factual evidence that the election was rigged? Opposition ‘polls’ are not that, btw.

Jeffrey Mushens
Jeffrey Mushens
3 months ago

Why do left wing regimes so hate paper ballots, counted by hand, and love electronic voting machines, controlled the regime?
Next, watch for arrests for election denial amid stories about claims of fraud that are ‘baseless’ or ‘without evidence.’

Warren Trees
Warren Trees
3 months ago

I also couldn’t help recognizing this scenario for some odd reason. Vaguely familiar indeed.

Paul Thompson
Paul Thompson
3 months ago

Only idiots think that hand counting is better.

Jeffrey Mushens
Jeffrey Mushens
3 months ago
Reply to  Paul Thompson

Why?
Hand counts in the Uk since forever. Supervised by the candidates. Results known pretty well straightaway. No claims of election rigging.
Germany counts by hand https://www.deutschland.de/en/topic/politics/election-in-germany-counting-and-checking-the-votes-cast
France counts by hand
https://apnews.com/article/covid-health-france-elections-europe-96859198666d51b2c4482c3cdb0eb6aa
In fact, the vast majority of counties use paper ballots. US (and Venezuela) are outliers
https://www.weforum.org/agenda/2020/11/voter-registration-mail-ballots-countries-world-elections
Who’s the idiot?

Martin M
Martin M
3 months ago

UK gets results straight away because it uses FPTP. It takes longer in Australia.

Martin M
Martin M
3 months ago

What country other than the US (and Venezuela, apparently) uses electronic voting machines?

Samuel Ross
Samuel Ross
3 months ago

Do you mean to say that elections can be rigged? Hmm …. how curious! 😉

Martin M
Martin M
3 months ago
Reply to  Samuel Ross

They can in third world dictatorships.

Thomas Wagner
Thomas Wagner
3 months ago

Stop with the security checks!

Paul Thompson
Paul Thompson
3 months ago

I’m not fond of the mechanism of assassination. That may be the only solution here.

Martin M
Martin M
3 months ago
Reply to  Paul Thompson

I favour the “Gaddafi treatment”.

Warren Trees
Warren Trees
3 months ago
Bret Larson
Bret Larson
3 months ago

You hope it’s the nadir. I hope so too.

James P
James P
3 months ago

I was in Venezuela around Christmas, 1985. The government of the time imposed some sort of IMF-required economic restrictions and raised the price of gasoline from $.05 to $.10. You could hear machine guns in the streets at night so we moved to a hotel run by the military. To be frank, Venezuela in 1985 remains the worst sh**hole I have ever seen and I’ve travelled some.

Andrew F
Andrew F
3 months ago
Reply to  James P

The main reason behind economic and political problems in South America is their relatively low IQ in comparison to West, China, Japan and Korea and Israel etc.
Higher than Africa but not that much in countries like Guatemala with 79.
IQ is only necessary condition for success but not sufficient of course.
Just look at Argentina (93) or India (with strong regional variations).

Sylvia Volk
Sylvia Volk
3 months ago
Reply to  Andrew F

Andrew, I read your post and instantly thought of correlation vs causation. Maybe you have it backward: you’re saying A causes B, but maybe B is the reason for A. (Or maybe it’s only correlation.)
I say this because of the pandemic. A couple of years of sudden hardship, and it seems like public stupidity and craziness has gone through the roof in all sorts of formerly pretty stable populations. If you tested the population in my own country for general IQ before and after, I bet you’d find a drop.

John Riordan
John Riordan
3 months ago

What a tragedy this sort of thing is. There was another quite good Unherd article recently asking why South American nations in general are so violent, and I have a personal theory (well, more a mostly-but-not-wholly unfounded conjecture) that the root cause of oppressive socialism is a tendency to violence. It’s not just South America: the Marxist experiments in Russia, China, Cambodia etc all happened in societies acclimatised to high levels of violence.

Anyway, the description of what Caracas was like in the 20th century fills me with sadness. From what’s described above, it seems the Venezuelans were doing everything right, and yet somehow it all still went wrong. The oil price shocks of the late 20th century – first the Arabs placing an oil embargo on Israel’s allies because of the Yom Kippur war, and then the USA’s successful campaign to drive down Soviet oil revenues leading eventually to the fall of Communism – clearly did a lot of collateral damage to nations that really didn’t deserve it.

Michael Clarke
Michael Clarke
3 months ago

It’s a tragedy that the Venezuelan people will have to resolve.