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Is Maduro Turning His Back on Socialism? Demystifying Venezuela’s New Economic Reality


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2017. Thousands of Venezuelans took to the streets to demand an end to Chavista tyranny. Venezuela was submerged in an unprecedented economic crisis: the GDP had contracted by approximately 80% since 2012; the currency had reached hyperinflationary figures; and Venezuelans were migrating en masse fleeing authoritarianism and poverty.

Back then, the henchmen of the Maduro regime murdered more than 150 Venezuelans who demanded a change for the country. Their intention was to stop, through violence, a popular movement that yearned for the freedom of a country that had been oppressed for 18 years.


Venezuelans protest in 2017 with signs bearing the names of people killed by the Maduro regime. (Image: EFE)

To illustrate in greater detail the state of calamity in which Venezuela’s economy was at that time, I will refer to a personal anecdote. At the end of 2017, before finally leaving my country, I decided with a friend and three girlfriends to take a trip to Tucacas, in Falcón state, one of the beach destinations par excellence in Venezuela. At that time, I had some content creation contracts with the eBay platform and my income was in dollars, so I could afford certain “luxuries” that 90% of the Venezuelan population could not.

We left on a Tuesday for a paradise beach in my car, and we stayed until Monday. We stayed six nights in a luxurious apartment near the sea, and our expenses included food, drinks (alcoholic and non-alcoholic), boat trips to the keys, fuel for my car, and a small repair that arose in the middle of the trip. The final bill was $240. Yes, 240 dollars, not for the lodging, not per person, the bill of 240 dollars was the total that a friend and I spent (120 dollars each), to cover the vacation expenses of five people.

This means that in 2017 a person could pay for a luxury vacation in Venezuela with 50 dollars a week, a situation abysmally different from today’s situation in the same country, where with 50 dollars, at most, you can pay for a dinner in a moderately luxurious restaurant in Caracas.

But, how much has actually changed in five years?

Sanctions and the economic policy shift

Yes, I know what everyone is thinking right now. But what’s wrong with that? The big problem is that at that time the minimum monthly salary in the country was no more than 2 dollars, and although 50 dollars might not seem like much, for many Venezuelans that could be two years of work.

After the countless crimes against humanity committed by the Maduro regime, the Barack Obama Administration imposed timid sanctions on those directly responsible for the Venezuelan repression apparatus, which did little to bother the regime. However, in 2017 Trump came to power, and the story would soon begin to change.

The onslaught of sanctions from the Republican government forced Chavismo to rethink its strategy of absolute control over the economy. Of course, not even in his wildest dreams did Trump think that the sanctions would make the Maduro regime change its economic policies. What the former president was looking for was precisely to put an end to the socialist tyranny, and, for better or worse, the market began to fix what interventionism had destroyed.

In 2019, with the appearance of Juan Guaidó on the scene, a rain of sanctions, the lack of international recognition, and the financial drowning, Maduro and his criminal conglomerate were forced to start dismantling the economic controls they had cemented in the last two decades. Thus, little by little, they began to stop sanctioning and punishing what they previously called “exchange or financial crimes,” such as the fact of buying and/or selling dollars, importing certain products and passing food through the border, among others.

Suddenly, in view of the need for cash flow in the country, and in turn, of the impossibility of the corrupt members of the Chavista regime to invest their money abroad —due to the US sanctions— an unnoticed repatriation of capital began, with all the money that at some point left the country, entering again, for fear of being frozen by foreign governments.

In the midst of the political uncertainty and in spite of the struggles for power, Venezuela began to see the famous bodegones stocked with foreign products that had not been seen in the country for more than a decade. Prices were displayed in dollars on the shelves without concealment, and the bolívar began to disappear from everyday economic transactions. New companies invested in the country, salaries began to grow, and the shortages of other days seemed to be far away.


Chavista protesters hold a banner against President Trump (Image: EFE)

Venezuela isn’t the capitalist paradise that some are trying to sell, but the market has forced its way in

The phenomenon of the bodegones, imported vehicles, and the luxury that some so-called Venezuelan enchufados (literally, “plugged,” people with links and/or businesses with the dictatorship) showed on social networks gave rise to articles in international media, such as Bloomberg or The New York Times, which tried to decree the birth of a new “capitalist” society in the hands of Chavismo. Such appreciation couldn’t be further from reality.

Yes, evidently, as we have been explaining, Chavismo was forced to dismantle the asphyxiating economic controls in the country in order to:

1- Try to receive foreign investment.

2- Permit an unregulated commerce that would allow the population to acquire the basic necessities that they had failed to provide.

3- Diminish protests and social discontent.

4- Be able to generate a more positive economic environment to reinvest their money.

5- Try to clean the face of their regime at the international level.

Undoubtedly, if you were to ask any Venezuelan today inside the country if the nation is better off today than in 2017, when it was totally impossible to find a roll of toilet paper in the supermarket and half a kilo of pasta (no matter how much money you had) a great majority will tell you yes. However, that cannot cloud the fact that, according to an analysis of the Universidad Católica Andrés Bello, carried out in September 2021, 94.5% of Venezuelans lived in poverty conditions, while 76.6% lived in extreme poverty conditions.


With an average of 57.2 hours of water service per week in the first six months of the year, Venezuela faces the problem of supplying an essential resource. (Image: EFE)

And yes, today it may be a little easier to find a roll of toilet paper or meat in the supermarket (for those who have resources), but most people (with or without money) don’t have a constant supply of electricity (Venezuela records on average a power outage every three minutes), water or Internet. And in some areas of the country there are long lines for fuel.

Another aspect to take into account is that legal insecurity in Venezuela remains exactly the same as in 2017, or 2013, the year Hugo Chávez died and Maduro took power. Although Chavismo, for its own benefit, has decided to turn a blind eye to what they call “financial crimes,” all the legislation that criminalized such actions is still in force. This means that today, a Venezuelan can go to jail for buying or selling foreign currency, or carrying out any operation not allowed in a socialist regime. The only thing that determines whether someone ends up in jail is the favor of the authorities.

The same happens with expropriations and any other violation of private property: you can make a multimillionaire investment today, attracted by the supposedly improved economic climate in the country, but nobody guarantees that tomorrow Chavismo will decide to steal your property or close it down.

A totalitarian regime still reigns in Venezuela. There is no separation of powers, democracy, free elections, or institutions. The law is whatever the Chavista on duty comes up with, or whatever Maduro thinks in the morning when he wakes up. Today, the tyrant may wake up quite friendly and enthusiastic about foreign investment, and perhaps tomorrow he will not find it so fit, and they will kick international companies out again, as they did with ConocoPhillips and Kellogg’s, among others.

The most recent example of the lack of economic freedoms occurred with the concert of the Colombian artist Juanes. A company had made all the arrangements to take the singer to give a concert in Caracas. Yet, when the number two of Chavismo —Diosdado Cabello, accused of drug trafficking by the United States—, found out about the event, he attacked Juanes on his television program. The reason? The Colombian singer has been critical of communism and also participated in shows sponsored by the Venezuelan opposition. The result of Cabello’s attacks was that Juanes’ show was canceled, something that obviously would not have happened in a capitalist society with the rule of law.

Have sanctions benefited or harmed Venezuelans?

During the last few months, the Biden Administration has sought to reach out to Maduro’s dictatorial regime because of oil supply (an unrealistic scenario taking into account the destruction of the industry in the country at the hands of the state-owned PDVSA). However, with the new realignment of powers, the arrival of Petro to power in Colombia, a region increasingly leaning to the left, and the Democrat president trying to ingratiate himself with dictatorial regimes in Latin America, the lifting of sanctions does not seem improbable. Should this come to pass, my prognosis on the repercussion this would have on the lives of Venezuelans is reserved.

In theory, with the lifting of sanctions on Chavismo, the authorities will be able to trade oil, including with the United States, and there will be a greater flow of money to the regime. However, the lifting of the sanctions could generate precisely the opposite of what the imposition did: make the members of Chavismo try again to place their fortunes abroad, emptying the only economic lung that exists in Venezuela (the dirty money of the regime’s plugged-in members). This would provide Maduro and his cronies with an economic slack that will lead them to try to fiercely control the economy, in order to avoid the birth of a new business class with purchasing power, which in the future will try to dispute power with him.

Under the current political and economic dynamics, I am completely convinced that the sanctions have indirectly benefited Venezuelans. Although they now have to compete for the blood money of the enchufados, at least they can go to the supermarket and find fresh meat. In the long run, nevertheless, it is unpredictable what may happen in a country with no rule of law.

Maduro’s Venezuela from now on may take countless paths: follow in the footsteps of China, Russia, Iran, or its closest ideological and political partner, Cuba, but that is something that only Maduro and his henchmen will know.

On our part, the only thing we can state with precision is that:

1- Venezuela is not a new paradise of capitalism.

2- It is still governed by the same criminals who embezzled the nation.

3- There is no rule of law or respect for private property.

4- Socialism continues to be the premise to be followed -despite the fact that the market momentarily has a share in society.

5- Thousands of Venezuelans continue to migrate out of the country every week.

6- Socialism failed and those who for years criticized the market are turning to it to save themselves.

7- A tyrant will never cease to be a tyrant, no matter how many flowers the press may put on his face and how much the complicity of other leaders may try to embellish him.

On August 30, 2022, a new report by the Venezuelan Platform for Refugees and Migrants determined that the number of Venezuelan citizens who left the country fleeing the socialist regime reached 6.8 million inhabitants, surpassing Syria and Afghanistan, and equaling Ukraine, which is currently being bombed daily by the second nuclear power in the world.

For context, Ukraine had 44 million inhabitants and 6.8 million have fled since the Russian invasion began 6 months ago. Venezuela had 30 million inhabitants, and the same number of people fled the country due to the repressive policies of Chavismo and hunger. Socialism has been in the long run as destructive as Putin’s missiles that daily destroy the lives of Ukrainians.

No amount of makeup can clean up Maduro’s crimes, and that is something Biden should take into account if it crosses his mind to dismantle the sanctions against him and/or try to legitimize his regime.

Emmanuel Rincón is a lawyer, writer, novelist and essayist. He has won several international literary awards. He is Editor-at-large at El American // Emmanuel Rincón es abogado, escritor, novelista y ensayista. Ganador de diversos premios literarios internacionales. Es editor-at-large en El American

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