April 15 2013

Whomever wins the April 14 vote in Venezuela will receive a desolate landscape, made it worse by a never ending campaign. The blame needs, of course, to fall on chavismo or whatever political ersatz comes after two decades of romantic robinhoodery blended with mean political expediency. Though the weak-minded pusillanimous opposition leadership of the first decade is also to share the blame. But they are less guilty because in the end they were nice people, educated, polite and thus woefully unprepared to the onslaught of thuggery that Chavez unleashed on Venezuela. By the time they realized who they were dealing with they had lost any capacity of response and the electorate had become dependent on Chavez for its self esteem sustained on the occasional social handout.

The country that Chavez left us is a country that is financially ruined. True, we still have a lot of oil under our feet and good management can bring us back to a semi functional state in as little as half a decade. But the bonanza of the last decade will have been spent with very little to show for it.  It has been swallowed by corruption, inefficiency and gifts because what Chavez has done is to distribute cash around, never establishing anything productive and sustainable over time. Nothing.

All of Chavez Misiones were designed for electoral purposes, to improve somewhat the everyday life of the masses without providing them with access to a real pay check, those that are given to people that actually produce something of value, any value, and which allows them true independence. We can argue ad infinitum as to the need to address poverty in Venezuela, but everyday it is clearer that Chavez social programs have not been the solution, a Band-Aid at best, with the nagging after thought of having made things actually worse in solidifying  a “47%” mentality.

We also inherit a backward country, a country that has left a decade of impressive technological development go by. True, Chavez bought a satellite. But he did that only, he bought a satellite, with his fat checkbook, while this week we learn that there is not enough feed in Venezuela for our livestock and that in a matter of days we will be left without pork, o poultry or milk. But we have a satellite that can dress the inventory of all the lands that have been expropriated and thus stopped producing anything of importance.

When countries made huge strides in their development they did not start by buying satellites. Japan, perhaps the older historical example, started buying industries to produce junk, lots of junk while they made sure they would produce as much food as possible so the little bit of cash available was for investment in industries that the rest of the world found uninteresting or depassé. We know how that ended, and how it ended for Korea and the Tigers and how it may end for China, the pendulum of power having shifted irremediably to Asia who understood that developments starts by keeping it simple.

But in Venezuela Chavez used its large resources to buy elections and power, only too willing to destroy local production when he discovered that it was easier, and more profitable for his cronies, to subsidize imports than promote local production. Venezuela agriculture was not great in 1999 but at least it was growing and on some items not only we were self sufficient but we could even export some occasional surpluses. Today it is simply forbidden to export food as there are no surpluses anywhere. And yet we see in the last decades that some countries get comparable population growth as Venezuela did and still these countries not only managed to feed the new arrivals, but fed them better.

Agriculture may be inefficient and lack modernization as the only modernization that has taken place is the one that allows reducing what are now exorbitant labor costs, but it is not the only sector falling behind in Venezuela. Power outages are now the norm across the country and even Caracas, protected for political interests, sees now the occasional power outage. Communications are dismal. The state phone company is unable to ensure a steady service and Internet, that it supports through its quasi monopoly of fiber cable, is one of the worse of the continent. Venezuela may boast to have one wireless phone per capita but the reality is that people like me have three, one from each provider because we never know which one will work when we need it for our work or safety.

Under Chavez no major infrastructure work has been completed except for the occasional show off for electoral purpose, a small cardio hospital for children here, a cable car of limited capacity there. We live today on basically the same infrastructure that existed in 1999. But the economic needs have grown, and that structure has not been managed as it should have been done. As a consequence it is now overextended and  not only because it was insufficient in 1999, but the country has added a few million people while what has become an import economy forces  distribution of all that is consumed in Venezuela from not even a half dozen harbors.  A centralized logistical nightmare of corruption and inefficiency.

Between 1983 and 1998, with all its problems, the previous administrations inaugurated 37 subway stations of Caracas, and left the blue prints and preliminary contracts for more subway stations, and three commuter trains, two of them already half way in the making. That is 2.5 subway stops per year and enough plans under way to keep that rhythm for the next 5 years. Chavez has inaugurated in 14 years only 8 subway stations. Caracas has become a traffic nightmare and now one of the most polluted cities of Venezuela.  The story is the same with highways, subways for other cities, public transportation schemes, railways under construction for over a decade, etc..  This deficient infrastructure will be a major obstacle for any recovery.

But what is worse than any of the above is that the quality of education has gone down as universities are underfunded and schooling has privileged the political over the technical. The best and brightest tend to leave the country in droves unable to find real jobs, or the basic quality of life they naively thought a good degree would allow them to gain. Who is going to do the job of rebuilding the country?

It does not matter who wins next April 14, the country is in dark quandary. If Maduro wins, he cannot keep up the spending the way Chavez did, and his heteroclite coalition will not allow him to take the “neo-liberal” measures that he cannot avoid. People are more and more demanding and are going to take Maduro into account for all of the promises that Chavez did not deliver.

If Capriles win, no matter what good intentions he has or what decent managers he can attract, he will face a constant sabotage from a chavismo “47%” that does not care about anything besides what  they were promised; while the corrupts in charge from the high court of “justice” to petty positions in the ministries will keep working for themselves.

Our best hope, well, maybe our only hope to avoid civil strife is that Capriles wins and that a fraction of chavismo has the courage to break up and sit down to negotiate a settlement. This one will provide for the preservation of a limited but essential group of social programs while it frees some of the political shackles that the economy suffers so that local production can start again to grow, at least at a 5% clip for a decade.

That is all there is.