Legislative and municipal elections this weekend might give Venezuelans a chance to get out from under the oppressive reign of corruption and criminality that have been the hallmarks of the government of President Nicolás Maduro. But don’t hold your breath.
Maduro has warned that he will not “surrender the revolution” to an opposition victory, and the world has every reason to believe him: Key opposition members are unjustifiably imprisoned, one candidate was murdered, and Venezuela has refused to admit any key international observers to monitor its elections—not even officials from the Organization of American States (OAS).
Venezuelan Minister of Economy and Finance Rodolfo Marco Torres claimed that “the Bolivarian government complied with all of its international promises, despite internal and external attacks” when the country was apparently able to scarf up enough currency reserves to make its foreign debt payment last month.
But Maduro’s socialist government isn’t in the clear—not by a long shot. Falling oil prices have wrought havoc on the South American country’s economy, since oil accounts for nearly 100 percent of the country’s exports.
For years, the high price of crude fueled the oil-rich nation’s generous subsidy programs, which included free medical care, subsidized gasoline that costs less than a penny per gallon, reduced-price groceries, and more.
Now, decreased revenues from oil have the government rummaging extra-deep in its pockets to maintain these programs. Since the plummet in oil prices began in 2008, the foreign reserves of Venezuela’s central bank have declined from $43 billion to $15 billion, and gold reserves have declined by almost $3 billion just this year.
Moreover, inflation in Venezuela is bad enough—at 702 percent—to be reminiscent of post-World War I Germany, when citizens found better use for their currency as napkins and wallpaper. The reality of hyper-inflation does not fit the narrative of Venezuela’s state-controlled central bank, which claimed recently that inflation was at only 68.5 percent as of December 2014. So far, Maduro’s government has refused to report inflation data for 2015.
The International Monetary Fund expects Venezuela’s economy to shrink by 10 percent in 2016. But Venezuela’s debt service obligations will not shrink. It is due to repay $10 billion of debt next year. If present trends continue, it is unclear whether the Maduro government will be able to pull another rabbit out of its hat.
For his part, Maduro blames all of this bad economic news at home and Venezuela’s “dollar crunch” on an “alleged international conspiracy against his leftist government,” according to the Wall Street Journal.
Rather than spouting accusations, Maduro would be better advised to purge his government of the corruption and criminality that pervade it in the form of high-level human rights abusers and officials such as Diosdado Cabello, who heads both the national assembly and a prominent drug cartel. Last month, two nephews of Maduro and his wife were indicted on conspiring to import cocaine, through Honduras, into the United States.
If the Venezuelan people are to prosper, Maduro must respect the results of open elections. He would also do well to implement free-market reforms such as those outlined by the Index of Economic Freedom (which ranks Venezuela ahead of only Cuba and North Korea).
Absolutist governments rarely heed the call for political or economic reforms. But between the increasing numbers of anti-government protesters in the streets and that scraping sound coming from the bottom of the Venezuelan government’s coffers, Maduro may just find himself between a rock and a hard place—soon.
