The Economic Future of Venezuela
The Venezuelan people have spoken: In their presidential election of last Sunday, some 45 percent favored the center-left opposition challenger Henrique Capriles to incumbent Hugo Chavez, who secured 55 percent of the vote.
As a top leader of the opposition remarked, while the election may have been clean, it was not fair. Prominent political commentator Teodoro Petkoff editorialized in the Caracas daily paper Tal Cual: “To win [Chavez] had to launch unscrupulously the full weight of the state against Capriles. He made use of public funds and facilities and institutions of public administration in an obscenely opportunistic campaign.” The good news was that Chavez’s tactics fully united the opposition. The bad news is that they were unable to clinch the election.
It is easy to tick off the failures of the Chavez government: corruption, cronyism, profligacy, food and other shortages, inefficiency, politicization, and electricity blackouts. Street crime is rampant. Though soaring oil revenues have earned Venezuela almost one trillion dollars during Chavez’s years, the country has an increasingly crippled private sector, the highest inflation rate in Latin America, declining reserves, rising debt, and often debilitating currency and price controls.
In July, Human Rights Watch published a detailed study entitled “Concentration and Abuse of Power in Chavez’s Venezuela,” which noted his regime’s many arbitrary attacks on the judiciary, the media, and human rights defenders. At best, much energy, hope, and money are devoted to policies that bring short-term relief to targeted groups at the long-term expense of those groups themselves and all others.