Venezuela – a failure wrought by paranoia and a cause without much principle

It is noticeable that Venezuela is prominent in the British media at the moment. To be honest, the chaos of a typical Latin American banana republic seldom causes such interest, but given the links between the Venezuelan Government and Jeremy Corbyn, its failure is a convenient stick to beat him with.

And let’s be honest, things are bad there. I had the opportunity to go to Caracas in December 2015, when things were already falling apart, inflation was spiralling and the bolivar was on its way to toilet paper status. At that point, the government had stopped publishing most economic data – it was pretty meaningless anyway – and had acknowledged its exchange rate difficulties by offering an alternative exchange rate for tourists.

The official rate was six bolivars to the dollar. As a tourist, you could legally get two hundred bolivars to the dollar. The black market, usually a fair judge of reality, was offering eight hundred bolivars to the dollar. And, as the largest bank note in circulation was a one hundred bolivar note, you can easily imagine what that meant in terms of carrying money.

So, why are things so bad in Venezuela? Firstly, the economy is almost entirely underpinned by oil exports (which represented 96% of total exports) and when the price of crude fell, GDP fell catastrophically. A market economy can adjust to that, albeit painfully. Sadly for the Venezuelan people, they have a government which not only doesn’t believe in markets, it doesn’t appear to understand them either.

The government’s solution was to ignore the fall in state revenues as far as possible, continuing to fund popular social welfare programmes in order to retain support. At the same time, it introduced stringent price controls on key products, regardless of their production cost. As a result, as raw materials became much more expensive, it became impossible to produce staples at even breakeven levels, so private companies ceased production.

In response, the government either obliged companies to produce goods at prices that guaranteed losses, or seized assets to operate them themselves. The resultant collapse of availability of a vast array of products was inevitable. Even beer became hard to find. And, with the collapse of the currency, importing goods was impossible, especially as it became harder and harder to repatriate earnings from Venezuela.

There is no doubt that the regime, for that it what it must be called, has responded to setbacks with increasing paranoia. It must be someone else’s fault, for to admit error would be fatal.

This led to a conclusive defeat in December 2015 when, contrary to all expectations, the opposition won a clear majority of seats in the General Election, an election which, for the most part, was surprisingly peaceful. In downtown Caracas, I witnessed voters patiently waiting to vote in long queues, despite a heavy army presence.

When the results were finally announced, after a series of delays, the Opposition had won but, importantly, not by enough to overturn a Presidential veto. It is possible, perhaps probable, that an electoral system which seems to limit the ability of a dominant political force to gain overwhelming advantage, combined with some manipulation of votes cast, was enough to deny them, and President Maduro has since taken full advantage, ruling by Presidential decree, and effectively sidelining the Constitutent Assembly.

Arrests of opposition figures have become commonplace, and the removal of all alternative figures of authority has continued apace, as the economy crashes and burns. The vaunted healthcare system has collapsed, with even basic medicines not available, there is starvation as families struggle to put food on the table, and smuggling across the border with Colombia is rife.

Liberals across Europe have shown their support for our sister party in Venezuela, whose leader spoke to the recent Congress of Liberal International via Skype. Pressure needs to be put upon the Maduro regime to acknowledge its lack of legitimacy, release political prisoners and to allow the Opposition a opportunity to try to put the country back on its feet.

What Venezuela doesn’t need is the faux concern of the Conservative Party using it as a convenient stick to attack a domestic opponent. Because, ultimately, Conservatives don’t much care about Venezuela, but they are frightened of Jeremy Corbyn.

* Mark Valladares is a member of the Party’s Federal International Relations Committee, and blogs at Liberal Bureaucracy.

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31 Comments

  • I use a wide variety of media for news and for many years (decades) I have been a frequent reader of the ‘Morning Star’ (my newsagent says I am the only person who has ever bought one in years).
    In that journal. jeremy Corbyn was a regular columnist extolling the virtues of Venezuela (and Cuba).
    It is perfectly legitimate for his political opponents to ask him where he stands now.
    Maduro has arbitrarily seized private company assets and distributed them to those who voted for him.
    However, you can only loot once. The lootee is unlikely to replenish his stocks so that you can repeat your raid.
    I am not a Tory but much agree that JC be repeatedly asked (until he answers) whether or not he retracts his previous support having now seen the consequences.
    This is not a ‘convenient stick’ but a proper inquiry of one who has declared his ambition to be our Prime Minister.
    The adulation of Jeremy Corbyn on this site is becoming very odd. He is an honest, consistent and courteous individual but we are well within our rights to ask him how his long standing views on economic policy will get us out of our current hole.

  • Mark,

    there was a good article on the ‘Curse of Oil’ in Forbes a couple of months back https://www.forbes.com/sites/ellenrwald/2017/05/16/venezuelas-melt-down-explained-by-the-oil-curse/#5e6f25cd282b

    I think it should be clear to all that catastrophic mistakes were made by the Chavez and Maduro administrations in the planning and organisation of the Venezuelan economy. Maduro appears to have morphed into a stero-typical South American dictator determined to hold onto power at any cost.

    The Forbes article quotes Juan Perez Alfonso, Venezuela’s oil minister in the 1960s and a co-founder of OPEC, who first warned his nation (and others) of the oil curse. In 1975:

    “I call petroleum the devil’s excrement. It brings trouble…Look at this locura—waste, corruption, consumption, our public services falling apart. And debt, debt we shall have for years.”

    And today, the people are starving.

  • paul barker 9th Aug '17 - 3:07pm

    Venezuala seems to be slipping towards Civil War with, in effect, two Parliaments & two Supreme Courts as well as the rumoured presence of Cuban Troops. Its very hard to see how outsiders can help except by expressing our Solidarity with The Democratic Resistance.

  • David Pocock 9th Aug '17 - 3:19pm

    Socialism does not work and this one which was not that far from democratic socialism to begin with has ended in starvation and tyranny. Comrade Corbyn supported both cuba and Venezuala and I think it behooves Liberals and democrats to press him for more over this. He could be PM and I want to know how much of a Cuba or a Venezuala he will make us.

    I think the whole thing, as well as being tragic is an example that this system of state is broken and always leads to this End.

  • Jenny Barnes 9th Aug '17 - 3:27pm

    Could we ask where Theresa May and the Tories stand wrt the Saudi interventions in Yemen?

  • Simon McGrath 9th Aug '17 - 3:58pm

    @jenny

    Has Theresa May written many article extolling the achievements of the saudi govt and sugesting it as a model to follow ?

  • David Pocock 9th Aug ’17 – 3:19pm……….. Comrade Corbyn supported both cuba and Venezuala and I think it behooves Liberals and democrats to press him for more over this. He could be PM and I want to know how much of a Cuba or a Venezuala he will make us……………..

    Any post that begins with ‘Comrade Corbyn’ loses, at least to my mind, any credibility….

    Corbyn has utterly condemned violence from both sides…There are police as well as opposition fighters dying….

    Many of the opposition leaders, including Henrique Capriles, Julio Borges, Leopoldo López and Maria Corina Machado were directly involved in the violent 2002 right-wing coup attempt and continue to call for the violent overthrow of the government.

    Does your condemnation of violence depend on who is responsible for it?

  • Toby Keynes 9th Aug '17 - 6:23pm

    Expats:
    It’s noticeable that Jeremy Corbyn is open in his condemnation of violence on all sides (whereas in reality all the firepower lies with the government, and the overwhelming majority of the dead lie with the opposition), but is completely silence about the sidelining and then criminalisation of democracy.

    If Jeremy Corbyn is not willing to condemn the destruction of a functioning democracy, how much does he care about democracy here?

  • It is nice to see a reasoned article on Venezuela. It appears that Venezuela’s problems go back to well before Chavez. Venezuela’s GDP per capita peaked in about 1978 and declined to a low in 2003 with a general strike. In 2008 it had recovered to above 1983 levels. Inflation is not new either reaching 81% in 1989. It was until the oil price collapsed in 2014 that things spiralled downward. The military deposing Chavez didn’t help the situation.

    It appears that one of the problems was the price control policies and the Venezuelan companies’ reaction to them – they stopped production. Rationing failed.

  • Mark,
    Prospective Prime Minister Corbyn does not need your protection from sporadic Tory Tweets but he is expected to answer questions on his current view of an administration which he has loudly championed for many years.
    So far, he has denounced violence, and so do we all. If he thinks it’s the result of American Imperialism let him say so but he seems not to want to be so clear and as an enfranchised voter I’m entitled to know his views.

  • Lorenzo Cherin 9th Aug '17 - 8:49pm

    An exemplary article from alas a now , it seems beardless Mark !

    Expats ,

    If you are gong to be taken seriously to a greater degree than the right wing slogans you do not like, favoured by that wing , ie Comrade Corbyn, can you do better than to buy in to the left wing bias against democrats in the opposition, and refrain from calling them en masse , right wing , when most are social democrats and Liberals, and the individuals mentioned have to a man and woman never been proven to be involved in any coup, but were and are , those amongst that group not in prison on trumped up charges, rallying the country to democracy .

    I know very little of the country compared to experts , but have followed it closely for some very many hours of research and freading, to know that illiberal bias is on the left and right and does not uncover the truth, unlike our valliant Valadares !

  • Ed Shepherd 9th Aug '17 - 9:20pm

    Just because someone is paranoid does not mean that there willl never be a US backed coup to overthrow them. The US coup in Venezuela against Chavez will have cemented the current regime in place for many years to come. In the same way that clunky US attempts to murder Castro solidified his hold on power. Assad has learnt a lesson from the brutal murder of Gaddaffi and Hussain and so has the government of North Korea: hold onto power long enough and you might survive to enjoy tea as a guest of a British prime minister just like mass-murderer Pinochet but weaken your regime and you will be viciously slaughtered in a ditch. It would be great to see worldwide democracy. The UK could help worldwide democracy along by announcing that it will no longer support despots, oligarchies and tyrants. I would vote for that!

  • Toby Keynes 9th Aug ’17 – 6:23pm….Expats:…..It’s noticeable that Jeremy Corbyn is open in his condemnation of violence on all sides (whereas in reality all the firepower lies with the government, and the overwhelming majority of the dead lie with the opposition), but is completely silence about the sidelining and then criminalisation of democracy…..If Jeremy Corbyn is not willing to condemn the destruction of a functioning democracy, how much does he care about democracy here?

    In almost 5 months of violent protests there have been around 100 deaths ( most of whom are protestors) but considering that stores are being looted government building burnt, etc. I wonder what the death toll would be in the UK if such a violent protest occurred…
    I note you ignore the involvement of those ‘opposition leaders’ I named….

    I try and avoid ‘what-abouts’ but contrast the right wing demands to Corbyn in a country where the UK has almost no influence with that of Bahrain where at least the same number were killed in 2011 and the UK government welcomed it’s king in 2016 and used police to stop peaceful protest against the visit…

    Sadly some posters seem far more interested in joining Tory point scoring that dealing with the many problems at home…

    Lorenzo Cherin 9th Aug ’17 – 8:49pm…My remarks about the content of posts on ‘Comrade Corbyn’ apply…

  • Steve Trevethan 10th Aug '17 - 8:44am

    Getting politicians to comment on countries with which they have had connections appears to be a wise policy as it may encourage longer term responsibility. But it must be applied consistently and openly.

    The people of Venezuela face hard times. Mr Corbyn is verbally connected with the governance of Venezuela. He has been asked to comment upon the current situation there.

    The people of Libya face harder times. Those who voted to attack and help destroy their previous flawed but functioning government should be required to comment on the current situation in Libya and their connections with it.

  • Steve Trevethan 10th Aug '17 - 9:54am

    “The crisis in Venezuela is not one of socialism versus capitalism or dictatorship versus democracy – it is one of hegemony versus national sovereignty, of centralized unipolar power versus an increasingly multi-polar power.”

    A sovereign and independent Venezuela allowed to pursue its own destiny is one in which its own people will naturally seek to decentralize and distribute power. While the current government may not provide the ideal conditions to accomplish this, conditions under a US client regime – as US-wrecked Libya, Afghanistan, or Iraq prove – would be significantly less ideal.”

    http://www.globalresearch.ca/us-regime-change-in-venezuela-the-truth-is-easy-if-you-follow-the-money-trail-the-opposition-is-pro-washington-not-pro-democracy/5601933

  • Sue Sutherland 10th Aug '17 - 12:52pm

    As Lib Dems I think we are perfectly justified in querying the intentions of Jeremy Corbyn. His history shows that he is on the extreme of Left wing politics but now his supporters are trying to whitewash that history and cry Tory or Right Wing at any criticism of him. Personally I think May and Corbyn are very similar threats to democracy, as is Trump. I want to see a more equal society but not one in thrall to the dictatorship of the extreme left or the extreme right.

  • Lorenzo Cherin 10th Aug '17 - 1:07pm

    Sue

    It makes me laugh that some have already judged Macron as the new Blair, not too bad an example, wait, then he’s the new Cameron, but one way or anther not a liberal and certainly not a Liberal!

    The same critics think Corbyn is someone vilified, as though his thirty five years in politics have but a social democratic flavour, whereas they are certain that Macron’s three or four years in politics can be judged as right wing , wait for it neo liberal, even though he was in a socialist or social democratic goverment , and has appointed an ex social democrat now liberal conservative as prime minister in what seems to be a coalition !

  • Sue Sutherland 10th Aug ’17 – 12:52pm…As Lib Dems I think we are perfectly justified in querying the intentions of Jeremy Corbyn. His history shows that he is on the extreme of Left wing politics but now his supporters are trying to whitewash that history and cry Tory or Right Wing at any criticism of him….

    Please explain how Corbyn is to the extreme of left wing politics? His stance on most things would be considered slightly left of centre in most European countries…

    However, let us consider extreme right wing policies like making employment tribunals inaccessible to workers, a tax on extra bedrooms, support for secret courts, trebling of tuition fees, cuts in disability allowances, cuts in benefits for the working age poor, cuts to the EMA, etc……..How did the LibDems stand on those matters?

  • Glenn Andrews 11th Aug '17 - 10:13am

    @expats – given the Labour Party abstained on the welfare bill and their peers didn’t support Libdem motions in the House of Lords to mitigate those cuts; the Libdems clearly stand to the left of Labour on the last three matters on your list…. and as the trebling of tuition fees is a result of a Labour commissioned report, about the same place as them…. Secret courts is neither left nor right, but nonetheless as wrongheaded as the employment tribunals (Which is right wing I guess)

  • David Pocock 11th Aug '17 - 10:17am

    Hey expats,

    I would not call myself a right winger, I am centre left. I suppose you are right on my comrade Corbyn attack, perhaps you should not use right winger as an insult either.

    Regarding political violence, I don’t see it as a either or. Make a post about Saudi Arabia and I will gladly share my distaste for the way that nation is run. This is an article about Venezuela however.

    Regarding supporting Tory points. I guess in this I agree with the Tories, doesn’t mean I’m going fox hunting with the bullington club later. I oppose Venezuela’s government due to the fact they are just damned illiberal. The thing I value most of all is freedom and the comrades of Venezuela are currently killing protesters. I won’t be silent on that. Hard politics of the left and right both lead to tyrannical politics and Venezuela is a tyranny.

    And the leader of the opposition is a close supporter of it. Cuba too. He must in an open democracy be at least questioned about it. As should any senior politician who supports a tyrant. We should not give labour succour or cover. I joined this party not to tacitly support labour but to replace them.

  • Glenn Andrews 11th Aug ’17 – 10:13am………David Pocock 11th Aug ’17 – 10:17am…

    Re. Left/Right…

    I am now, it seems, on the extreme left of LibDem policies..A few years ago my views were ‘mainstream’ Liberal (dem); the party seems to have moved away from me…

    I have no problem in being called a ‘leftie’ but I find it upsetting that party politics seem to feel that it is inciteful to refer to Corbyn as ‘Comrade Corbyn’..After all May is never called ‘Wingnut May’…

    As for this being an article about Venezuela and, as such, comparisons with Saudi, Bahrain, Philippines, Brazil, etc.: surely they are the standard by which we should judge our, not just Corbyn’s, response…

    As for problems at home, IMO our values face a far greater threat from May, Johnson, Davis, Patel, etc. than from Corbyn, McDonnell, Watson, Eagle, etc….and yet there are far more LDV articles attacking Labour than Tory personnel/policies…

  • David Pocock 11th Aug '17 - 1:33pm

    Well I don’t think lib dems have moved much. I think a lot of voters have moved to both extremes really. Tell me where you think policy has shifted as I can’t see it.

    Regarding corbyn, the labour manifesto was reasonable centre left mostly… two points

    1 it isn’t past a party to stand in the centre and govern on the left or right.

    2 that manifesto was labours and not corbyns.

    Regarding may and the Tories, they are hopeless and divisive. They need to be removed. That said again this is not really a Tory thread. I fear that we will never cut through if we are gloves on with one party and not the other.

    I guess we all see what we see. There are plenty of attacks on Tories here.

  • David Pocock 11th Aug ’17 – 1:33pm……………..I guess we all see what we see. There are plenty of attacks on Tories here……………..

    Really? I had to scroll down to ‘The Right are more politically correct than the Left’ before I found an article which I thought would criticise the Tories…However, by the second post it had already started to attack Labour; a theme which continued throughout the thread…

  • David Pocock 11th Aug '17 - 5:09pm

    You never explained what you think is the policy shift within the party.

    I won’t outlay my problems with the left here but I am sure if you are into harder left politics you are aware of others criticism of it. They are not beyond reproach.

  • David Pocock 11th Aug ’17 – 5:09pm
    You never explained what you think is the policy shift within the party………………I won’t outlay my problems with the left here but I am sure if you are into harder left politics you are aware of others criticism of it. They are not beyond reproach………………….

    Ref. your first paragraph…I think just looking at the performance during the coalition years (a coalition that Vince says will be ‘remembered with pride’ and is defended by many on here) Danny (now Sir Danny) spent far more time in/on the media defending Osborne’s policies that did any Tory…A critical moment for me was when asked about the adverse affect of ‘austerity’ cuts’ on child poverty his glib answer was, “Difficult decisions had to be made” and this at a time when tax breaks for the wealthy were being implemented…

    There are many problems with Labour’s manifesto (as was pointed out it is not Corbyn’s alone) but at least on housing, education, tax, etc. he seems to offer solutions…Will they work? Who knows; but one thing is certain, carrying on as we are isn’t a solution….

  • jayne Mansfield 11th Aug '17 - 9:15pm

    @ Glen Andrews,

    Jeremy Corbyn voted against the welfare bill. If one wishes to check those who abstained and the 48 who voted against the bill, they do not seem to be those ‘moderates’ that the Liberal Democrats hoped would join them when Jeremy Corbyn became leader.

    @ David Pocock,
    ‘that manifesto was labours not Corbyns’ Doesn’t this show that Corbyn listens to views of others and is far from being a dictator?

    I have been constantly surprised by the man. Pleasantly surprised. I would like him to make a stronger condemnation of the actions of the government of Venezuela. However, I don’t think the tories who are criticising him give a fig for the people of Venezuela, the incompetents just want a stick to beat him with.

  • Richard Underhill 12th Aug '17 - 10:59am

    Donald Trump’s comments about the possibility of military action in Venezuala will cause disagreement across the whole of Latin America.
    The UK should remember that Ronald Reagan invaded Grenada, a Commonwealth country, without prior consultation with the UK. The USA had technically superior military forces, and superior numbers as well.
    The Monroe doctrine was about the world’s great powers, ain, France and UK, not interfering in President’s Monroe’s backyard.

  • Richard Underhill 12th Aug '17 - 11:01am

    jayne Mansfield 11th Aug ’17 – 9:15pm They do care about the price/s of oil and gas in world markets.

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