Lessons From a Broken Land

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Lessons From a Broken Land

Venezuela is becoming a failed state. What will it be after it falls?
From the August 2016 Trumpet Print Edition

Venezuela is the Zimbabwe of Latin America. As a native of Zimbabwe, I can say that from personal experience.

Both nations have tremendous wealth potential. Zimbabwe has rich soils, an advantageous climate and abundant mineral wealth. It was once the breadbasket of Africa. Across the South Atlantic, Zimbabwe’s Latin American counterpart is also rich in natural resources. It once supplied about 5 percent of the world’s oil; its oil reserves are the largest in the world.

Today, both nations have little to show for all their natural wealth. Instead, they have become the poster children for some of the most embarrassing and disastrous consequences of socialist policies.

The Legacy of Chavismo

Nationalization of businesses and the consequent erosion of investor confidence, government subsidies and the subsequent “remedies” of money printing, price fixing and complicated currency controls produced nightmares. This was the “21st-century socialism” of former Venezuelan President Hugo Chávez and his successor, President Nicolás Maduro.

In Venezuela, cell phone service providers have suspended long-distance calls. In May, Coca-Cola femsa suspended all production in Venezuela because of a sugar shortage. Toilet paper is now scarce. In April, state employees were awarded two months of three-day weekends in order to conserve electricity. Then the government added in two extra rest days per week. The government plans to create a new time zone to help save electricity. Women have been asked to not blow-dry their hair. It’s almost laughable were it not indicative of bigger problems.

Like the Robert Mugabe regime in Zimbabwe, the Chávez administration appropriated productive farms and redistributed them to his loyal yet incompetent supporters.

Venezuela faces acute shortages of food staples, cash and other basic commodities. A black market is thriving, and corruption is rampant. There has been an outbreak of violent crime and looting. The nation’s health-care system is collapsing; its economy is free-falling; prices are skyrocketing; and Venezuelans are suffering.

In an effort to calm some of the tension, the Venezuelan government raised the minimum wage by 30 percent. Yet the extra cash won’t bring much actual buying power, if any. The boost won’t quite keep pace with the current inflation rate of 180 percent. It will certainly fall short of next year’s rate, which is projected to increase by 1,642 percent. Venezuela’s fiscal deficit is estimated at about 20 percent of gross domestic product.

Venezuela’s crisis is almost identical to Zimbabwe’s during the decade of the 2000s, when hyperinflation led to severe cash shortages, selling hard cash via wire transfer at an exorbitant premium, the relentless printing of trillions of Zimbabwean dollars, and ultimately, the collapse of the Zimbabwean currency in 2008. Rival political parties were then compelled to coalesce into a power-sharing government in 2009. The Zimbabwean dollar was replaced by multiple foreign currencies, including the United States dollar, the British pound, the South African rand and the Chinese yuan. No longer could the nation function without heavy foreign influence and exploitation.

Some analysts say Venezuela is treading a similar path toward hyperinflation.

“Hyperinflation means that the currency has lost its value, people have to go to the stores with bags full of money, and prices rise almost by the hour,” said Robert Rennhack, an International Monetary Fund official. “What we saw in previous cases of hyperinflation in Latin America is that there was a political consensus that policies had to change.” Syndicated columnist Andrés Oppenheimer noted, “[N]o Latin American government in recent memory has been able to survive a hyperinflationary crisis. When you reach five-digit inflation rates, governments either make a dramatic political U-turn, or they fall” (April 20).

Venezuela’s Fate

For relief, Zimbabwe implemented a “look East” policy—a marriage of convenience of sorts with a culturally distant China. Venezuela may implement a similar policy, but, unlike Zimbabwe, it has other options. Perhaps the only major distinction that separates Venezuela from Zimbabwe is that, like most Latin American nations, it has strong European and Roman Catholic roots. The stakes—and the likely solutions—for Venezuela and Latin America are significantly different.

It appears Venezuelans have had enough of the socialist regimes of Chávez and Maduro. They have taken to the streets to demand a recall referendum on Maduro’s presidency.

“Another day, another protest in Caracas,” wrote the Guardian’s Latin America correspondent Jonathan Watts. “President Nicolás Maduro remains defiant that Venezuela will not be the next left-wing domino to fall in Latin America, but he may not have a choice” (May 19).

Opposition leaders see Venezuela as a ticking time bomb, as flag-waving protesters chant, “The government will fall.” But to Maduro, the referendum is “not viable,” and his government has deployed security forces to block the protests.

As more and more Venezuelans express frustration at Maduro, the nation’s military may be forced to pick a side.

May 21-22, President Maduro presided over Venezuela’s largest military exercises in its history, just a week after he declared a 60-day state of emergency for what he called a looming invasion from the United States. The state heightened alarm by alleging that U.S. spy planes had illegally entered Venezuela’s airspace. “We’re as ready for an invasion as we’ve ever been,” Maduro said on May 21. Half a million personnel participated in the exercises.

But the idea that the Obama administration was planning to launch a war against Venezuela is ridiculous. This was a theatrical effort to increase popular support for Maduro and stave off efforts to remove him from office. “The government is looking to victimize itself to both the international community and its own followers,” Rocio San Miguel, the director of the Citizens’ Control security firm, explained. “They’re looking for a distraction to buy time, and there’s no better distraction than the military one.”

Perhaps Maduro hopes a military show of force may also have a certain chilling effect on disgruntled citizens. Yet even Venezuelan soldiers and officers are not immune to the upheaval in their country.

So which side will the military pick?

Over the years, the Venezuelan military has been purged of antisocialist elements, and its most powerful leaders have become intrinsically connected to the Maduro administration. Regardless, Venezuelan history professor Margarita López Maya assessed that Venezuelan soldiers unconnected to corruption networks were feeling the same hardships as the average Venezuelan. Case in point: Venezuela’s El Nacional newspaper reported May 1 that six Venezuelan soldiers had been arrested for stealing goats. The director of the Latin America Economic Growth Initiative at the Atlantic Council, Jason Marczak, noted, “It’s not a good sign when your military doesn’t have enough food, and when the military has been relegated to guarding and protecting food lines.” This is among the evidence suggesting that at least a major segment of the military would support Maduro’s ouster.

Venezuelan opposition leader and governor of the state of Miranda, Henrique Capriles, announced on May 18: “I tell the armed forces: The hour of truth is coming, to decide whether you are with the Constitution or with Maduro.” Observers like Cynthia Arnson, director of the Wilson Center’s Latin American Program, believe Capriles never would have made such a statement “if there wasn’t a section of the military willing to stand up for the Constitution and oppose the slide into authoritarianism.”

The Vatican Connection

In January 2015, the Roman Catholic Church’s Venezuelan Episcopal Conference sharply criticized the Venezuelan government and blamed the nation’s economic malaise on a “politico-economic system of a socialist, Marxist or Communist nature.”

If Maduro’s regime collapses, we can expect people like Capriles to fill the leadership void in Venezuela. He leads the Primero Justicia party, one of the opposition parties that formed a united coalition to challenge the party of Chávez and Maduro. The opposition coalition already has a supermajority in Venezuela’s National Assembly.

Capriles is a staunch Catholic, educated at the Catholic University in Caracas. He had challenged Chávez and Maduro in the presidential elections of October 2012 and April 2013 respectively. While campaigning for the 2013 elections, he stated that the first thing he would do after winning is pay homage to the Virgin Mary. In November 2013, Capriles had a private audience with Pope Francis, in which he pleaded for the Vatican’s intervention in Venezuela’s political crisis.

The Catholic Church’s history of mediation in political affairs and influence in national outcomes must have given Capriles reason for confidence. Adding to his confidence was the fact that Vatican Secretary of State Cardinal Pietro Parolin served as apostolic nuncio (ambassador) to Venezuela from 2009 to 2013. “I’m sure that Msgr. Parolin can help greatly, using his new position here at the Vatican to promote dialogue in our country,” said Capriles in 2013. During his tenure as the Vatican’s top diplomat to Venezuela, Parolin experienced all the church-state tension that came with Chávez’s socialist revolution.

Though Chávez didn’t get along with the Vatican, Maduro is not nearly as antagonistic. Pope Francis received Maduro during a visit in July 2013. This relationship positions the Vatican perfectly for a mediation role in Venezuela.

In April this year, the Venezuelan Episcopal Conference warned that the situation in Venezuela was “very grave.” Following that assessment, Pope Francis wrote Maduro a letter urging him to find a solution. The Vatican did not reveal the letter’s contents but said that “the pope follows the situation with a lot of attention and participation.”

Regional ‘Participants’

Venezuela’s neighbors in Latin America have increasingly voiced their opposition to Maduro’s rule. The secretary general of the 35-member Organization of American States, Luis Almagro, urged Maduro to allow the recall referendum. “To deny the people that vote,” he said, “to deny them the possibility of deciding, would make you just a petty dictator like so many this hemisphere has.”

Recent political transitions in Latin America have hurt Maduro’s fortunes. Old ally and former Argentine President Cristina Fernández de Kirchner was replaced by current President Mauricio Macri, who announced in May that the situation in Venezuela cannot remain as it is and that Maduro should make way for a replacement. In Brazil, the suspension of President Dilma Rousseff has opened up more criticism of Maduro. In early June, a senior Brazilian official said his nation would block Venezuela from taking the rotating presidency of the five-member Mercosur trade bloc in an effort to prevent Maduro from solidifying his grip on power.

Some of Venezuela’s biggest critics in Latin America, like President Macri, have close ties to Europe. German-Foreign-Policy.com noted that all current cabinet members in Brazil are “descended from former European colonial elites” (June 2; Trumpet translation).

The Holy Roman Empire

Across the Atlantic, other nations with strong ties to Latin America are just as concerned about Venezuela. Spanish Foreign Minister José Manuel García-Margallo said in May that “the EU cannot remain impassive in the face of these events.” He added, “The latent threat of a social explosion demands that we act and that we become involved in finding a solution to the humanitarian crisis and the political crisis.”

Germany, the EU’s most powerful nation, has been very assertive in its efforts to take advantage of the crises in Venezuela and other Latin American nations. During a visit to Argentina in February, Minister of State in the Foreign Ministry Maria Böhmer declared that Argentina’s political transformation presented possibilities to “use this unique opportunity to make a political, economic and social revival” and “draw on that what [Argentina has] in common with Germany, Europe and the world.” When German Foreign Minister Frank-Walter Steinmeier visited the nation in June, he spoke of “new momentum in German-Argentine relations.” In a series titled “Turning Point in Latin America,” German-Foreign-Policy.com explained that a new government in Brazil “creates space for the expansion of relations with Germany and the EU” and that the “political developments in South America promises Berlin new opportunities” (June 2-3; Trumpet translation).

There’s a reason Europe has such a strong interest in Latin America.

“The people of Latin America, the Caribbean and Europe have a long history of common aspirations,” said EU Foreign Policy Chief Federica Mogherini at the EU and the Community of Latin America and Caribbean States Summit in June 2015. “We have often been brought together by destiny, and lived through difficult and even dramatic times. Nowadays, we share a wish for peace and prosperity that our cultural and historical roots have helped to strengthen from generation to generation.”

The fact that Venezuela is facing such a difficult time could help unite the two regions.

About those historical roots, Pope John Paul ii said during a November 1982 pilgrimage to Spain: “I, bishop of Rome and shepherd of the universal church, from Santiago, utter to you, Europe of the ages, a cry full of love: Find yourself again. Be yourself. Discover your origins; revive your roots. Return to those authentic values which made your history a glorious one and your presence so beneficent in the other continents. Rebuild your spiritual unity. … You can still be the guiding light of civilization.”

Bible prophecy discusses a soon-coming, Catholic Church-led European empire whose tentacles will reach Latin America, the continent with the greatest number of Catholics. History—especially that of the Holy Roman Empire during the 16th century under Charles v—and prophecy—particularly Revelation 17—indicate that the Vatican will provide the religious-political cement that will bind the nations comprising this empire together with their Latin American outposts.

The crisis in Venezuela might create an opportunity for Latin Americans, the Vatican and Europe to take advantage of the mounting anti-Maduro sentiment and use it to usher in pro-Europe, pro-Catholic administrations in Venezuela and other parts of Latin America to help secure a future empire.