Since the death of Hugo Chávez in 2013, Venezuela had endured a series of political and economic crises that have contributed to making it the second-most violent country in the world, after Honduras. Particularly devastating for the country has been the collapse in global oil prices; Venezuela's economy is heavily dependent on income from its oil resources, and the sudden loss of this income has led to a reversal of parts of Hugo Chávez's populist "Bolivarian Revolution" and a resurgence of the political Right. In the just-released May-June 2016 issue of New Left Review, Julia Buxton, a specialist in Latin American politics at Central European University in Budapest, discusses the events that led Venezuela into crisis and the overall state of left-wing governance in Latin America. Read an excerpt below or the full interview here.
The Maduro government’s heavy defeat was obviously related to the economic crisis that Venezuela is going through. What are the main features of that crisis?
The collapse in global oil prices has been devastating for Venezuela. Oil revenues account for approximately 95 per cent of export earnings, 60 per cent of budget revenues and 12 per cent of GDP. The country’s economy was thus overwhelmingly reliant on income from this sector, which the Chavistas had used to fund ambitious social programmes at a time when prices were consistently high in the mid 2000s. The fall in the oil price has been compounded by a decline in production levels; Venezuela’s oil export income fell by 40 per cent in 2015. The foreign-debt burden is substantial, having risen from $37 billion in 1998 to an estimated $123 billion in 2016, and the government is struggling to cover the cost of repayments. Drought has exacerbated problems linked to under-investment in the nationalized energy sector, causing severe blackouts and shortages in the country, which is dependent on hydroelectric power for 70 per cent of its energy needs.
To add to this myriad of troubles, a system of exchange-rate and price controls that was originally imposed to deal with economic sabotage by the opposition in 2002–03 has remained in place and become profoundly dysfunctional. The official three-tier exchange rate between the bolívar, Venezuela’s national currency, and the US dollar bears no relation to the black-market rate. Food, medicine and basic household goods are difficult to obtain at government-controlled prices; citizens must spend hours queuing, or resort to the black market, where the same goods can be obtained at a huge mark-up. The brunt of this crisis has been borne by the popular classes who supported Hugo Chávez and Nicolás Maduro in the past. Maduro and his allies accuse the opposition of engaging in ‘economic warfare’ and blame them for the crisis. The widespread defection of PSUV supporters in the 2015 election suggests they have lost patience with that line of argument...
How would you assess the legacy of Latin America’s left turn over the last decade and a half?
It has been a revolutionary period, when people who had always been excluded finally had a voice and the opportunity to access power. Over the last century of Latin American politics, the left has consistently been kept out of government by US-backed military interventions. This was the first time that left-wing movements were able to exercise power throughout the region for so long. The popular classes have become much more conscious of their rights and their potential strength than they had been before. Those rights are no longer seen as something handed down to the masses from above by charismatic leaders, as was the case with an earlier generation of populists like Perón and Vargas. The Bolivarian Revolution in particular has transformed social relations in Venezuela and had a huge impact on the continent as a whole. But the tragedy is that it was never properly institutionalized and thus proved to be unsustainable.
Image: Embattled Venezuelan president Nicolás Maduro.