The incompetence of President Nicolás Maduro’s government in Venezuela, coupled with rampant corruption, is reaching dangerous levels that could portend a social explosion in that politically tense nation. With inflation reaching just under 50 percent for September and shortages of basic consumer goods multiplying by the day, there is no clear path to resolution of the country’s increasingly severe problems.
In the latest sign that the economy is falling apart, Toyota announced last week that it would have to close for two weeks because of delays in getting dollars from the state currency board, Cadivi. A shortage of materials left the company, a prominent multi-national struggling to remain productive amid the economic chaos, unable to keep its doors open.
The shortage of dollars is the inevitable result of the currency controls imposed by the late Hugo Chávez, founder of the Bolivarian Revolution who died earlier this year and left the country in the clumsy hands of his (and the Cuban regime’s) hand-picked heir, Mr. Maduro. Since then, the country has been wracked by a series of crises made worse by a heavy-handed government weighed down by its woeful ignorance of basic economics.
Take the so-called “toilet paper conspiracy.” (No, we’re not making this up.) A few weeks ago, as the shortage of toilet paper became acute, the government seized a private factory manufacturing that basic commodity and declared a “temporary occupation.” Mr. Maduro said the country’s oligarchs and the political opposition conspired to create the shortage, instead of placing blame where it belongs — a rigid system of government-imposed price controls that has destroyed the private sector.
Cronyism aggravates the problem. In 2007, the government nationalized the electric utility of Caracas formerly owned by AES, a U.S. company. Blackouts were rare up to then, but since have become painfully common. Some 70 percent of the country was left in the dark for almost 24 hours last month. Mr. Maduro predictably called this an “electrical coup” and blamed the extreme right instead of the government overseers.
Once, Venezuela could have relied on its oil wealth to save the day, but ever since Mr. Chávez turned control of the government oil company, PDVSA, over to his political cronies, it is no longer as efficient or as productive.
In desperation, Mr. Maduro last month traveled to China to seek a loan of up to $4 billion to rescue his economy, but his erstwhile friends in Beijing turned him down and Mr. Maduro came away with only a few trade agreements.
Faced with a sea of troubles, Mr. Maduro has sought scapegoats. Last month, he expelled three U.S. diplomats and accused them of conspiracy and sabotage, uttering the most unimaginative cliché in the book: “Yankee, go home.” (Yep, he really said that.)
Mr. Maduro is still seeking permission from lawmakers to rule by decree, but that won’t solve his problems even if he can twist enough arms to get the votes he needs. Eventually, he and his gang will run out of scapegoats, excuses and imagined conspiracies, and that’s when the crunch will come.
Heading into municipal elections in December, Venezuela’s people are clearly fed up with his failed governance and may well send a signal by voting for the regime’s opponents at the local level. At this point, the only thing that can save Venezuela is a change in course that Mr. Maduro’s government is apparently unable or unwilling to provide.