The brutal price of Venezuelan populism must act as a lesson to all

(Image: Reuters)

At the dawn of the 21st century, Venezuela seemed to be on a stunning upward trajectory. Many had started to believe that Latin American socialism had finally found a worthy champion. A country in possession of invaluable oil reserves under the leadership of socialist Hugo Chávez promised to provide the conditions for an interesting experiment. Opponents of socialism often point to the unsustainable nature of a truly centralised and redistributive economy. Venezuela seemingly had the vast, publicly-owned resources to balance the books while sustaining massive social and infrastructure expenditure. Today, Venezuela is a powerful example used by those opposed to veers towards the far-left; populist and undemocratic socialism is nothing more than an inevitable merciless race to the bottom. 

Many on the far-left globally have tried to justify the failures of the Venezuelan elite. Sanctions did not cause a decade of economic mismanagement and civil upheaval. Hyperinflation was not caused by American meddling. Hugo Chávez presented a vision for a sustainable and diverse economy, one which never materialised. Instead, Chávez increased Venezuela’s reliance on oil exports and nationalised vast swathes of the private sector, leading to an unprecedented reliance on oil prices and the importation of essential goods respectively. 

Massive public expenditure projects and high levels of wealth distribution did, in fact, lead to an extraordinary increase in the standard of living for the average citizen under Chávez. From 2003 to 2007, the poverty rate in Venezuela halved. In 1999, 19.3% of Venezuelan households lived in extreme poverty, by 2011 it was 7%. The sad truth is that if these projects had ran alongside economic diversification and anti-corruption efforts, Venezuela would be the most prosperous nation in Latin America and perhaps even the Southern Hemisphere. 

Chávez abandoned his plans for economic reforms as he sought re-election, massive public spending on the ‘Bolivarian Projects’ left a tangible improvement in living standards to the average citizen. People didn’t care where the money was coming from or how sustainable it was. It was a simple path to holding power for Chávez. The easiest way to finance these projects was from the profits of oil exports.

The obvious problem with a heavy reliance on oil exports is the volatile nature of global oil prices. State borrowing and expenditure was backed on the assumption of high oil prices. Venezuela did after all, have the largest known oil reserves on earth. It is estimated that 95% of Venezuela’s exports were comprised of oil, accounting for 25% of GDP.

Venezuela had also become increasingly reliant on imports as their economy failed to diversify and competition was stifled by nationalisation. This would later become an enormous problem as global sanctions preventing the sale of goods to Venezuela mounted.

The Chávista dream began to fall apart as a decade of unsustainable spending and price controls faltered, it seemed Hugo Chávez had died rather punctually in 2013. To compound the misery, oil prices began to fall dramatically in 2015. Venezuela could no longer afford to pay back external loans. Inflation and food shortages were highly prevalent. 

To counter the economic crisis, the Venezuelan leadership decided to print money at unprecedented rates. This lead to a period of hyper-inflation which has outdone the infamous Zimbabwean hyper-inflation crisis under Robert Mugabe in 2008-09. Since 2016, overall inflation in Venezuela has increased more than an estimated 53,798,500%. These are not just numbers, this has led to a profoundly harrowing humanitarian crisis. 

Almost 5 million people have fled Venezuela in recent years, extrajudicial killings are widely reported by the United Nations. Crime is out of control. Many Venezuelans suffer from malnutrition. The Bolívar is largely worthless and the US dollar is a coveted medium of exchange where bartering is not applicable.  

This is without considering the autocratic nature of the Maduro regime, democratic principles had been chipped away at since the early days of Chávez. The 2018 presidential elections only deepened the crisis in Venezuela. An economic and humanitarian crisis quickly also became a constitutional crisis. Maduro has since attempted to silence the opposition through violence and false-imprisonment. 

Proponents of social democracy and the centre-left in Europe and abroad must seek to distinguish their ideology from that of Chávez and Maduro. Jeremy Corbyn congratulated Maduro on his 2014 election victory, despite strong global condemnation of unfair electoral practices and well documented human rights abuses. Former left-wing Greek Prime Minister, Alex Tsipras, describes Hugo Chávez as one of his heroes.

At home, Sinn Féin has a troubling relationship with Venezuela. Sinn Fein sent their General Secretary, Dawn Doyle and Conor Murphy, MLA, to attend Maduro’s inauguration, despite the European Union’s assertion that the election was undemocratic. It is clear that Sinn Féin is either ignorant to the causes and scale of the humanitarian and democratic crisis in Venezuela or, they do not respect the sanctity of liberal democracy.

A piece on Sinn Féin’s website, written by Pádraig Mac Lochlainn, regarding Venezuela reveals an astounding ignorance as to the causes of the Venezuelan crisis,“Aggressive outside interference is damaging the democratic political institutions and sanctions are destroying the economy and harming Venezuelans.” Attributing the suffering of the Venezuelan people to foreign sanctions is offensive, disingenuous and grotesque. It is a testament to the reality of Sinn Féin’s politics; historically violent and undemocratic, it is radical populist nationalism masquerading as peace-loving democratic socialism. The movement for a united Ireland must not be hijacked by a party which seeks to justify and disregard human rights abuses and electoral malpractice. The people who have suffered most under Maduro and Chávez are the working class people of Venezuela; the very people Sinn Féin claims to represent.

Venezuela is a country which has had a bright future torn apart by autocratic populism. It serves as a warning to the proponents of a politics which advocates for a dramatic upheaval of our economic and democratic systems. We owe it to the people of Venezuela to learn from their mistakes.