Venezuela is on the brink of economic, political and social downfall. President Maduro must stop pretending that this crisis is not self-inflicted.
With an economic strategy which shows no acknowledgement of the real world but only theoretical socialist ideals, Venezuela has an inflation rate of 180 per cent, the largest in the world. Every day thousands of citizens pay for the consequences of their government’s true neglect for their wellbeing and stand in queues from morning until night in the hope of getting their hands on the most basic goods, such as bread, medicine, and even toilet paper.
Last year the Venezuelan economy shrank by 5.7 per cent. Yet, the seeds of this disaster were sown long ago by the late Hugo Chavez. During his presidency, Chavez pushed through land reforms to reallocate land to farmers, in order to stimulate economic growth and remove influence from private landowners. Over three million hectares of land has been redistributed as part of Chavez’s economically harmful reforms.
Agricultural output has plunged, as many of the farmers do not have the technology or expertise to sustain high crop yields, leading to food shortages, and forcing inflation to rise. In 2011 the inflation rate stood at 27 per cent and in the hope of taming the mounting inflation Chavez introduced price controls on the most essential products. It is no huge surprise that his policy backfired and inflation increased. To obtain higher prices, retailers decided to sell their products on black markets and even smuggled tonnes of food across neighbouring borders. Despite being futile in suppressing inflation rates, Chavez has continued to increase the number of products under price controls
Chavez and his protégé Nicolás Maduro have also failed to diversify and construct a feasible economy for the people of Venezuela. The Venezuelan economy relies on oil for approximately 95 per cent of its export revenue, however oil is more than just an export in Venezuela; it is political leverage.
With his political leverage, Chavez supplied subsidised oil to Cuba and 12 other neighbouring countries in return for political favours and to develop an anti-US coalition. But with oil having reached unprofitable slumps recently, giving away 200,000 barrels of oil per day is economically irresponsible. Yet, the pawn Maduro continues to follow Chavez’s trail, despite the programme adding to the debts of his government and refuses to face up to the problems which Chavez and he have caused through ridiculous schemes such as this subsidised oil giveaway and blames the United States for undermining his socialist government.
To create the illusion that his government are tackling the supposedly American caused crisis head on, Maduro declared a 60-day state of emergency. Luckily many Venezuelans see through this deceit and on 2nd May 2016 the opposition government groups delivered a petition with 1.8 million names to the National Electoral Council to demand a referendum to liberate Venezuela of Maduro. In response Maduro has said no referendum will take place this year, and the petition is the product of fraud. The opposition claims that the Electoral Council is working alongside Maduro to annul names and derail a future referendum.
It is hard to comprehend where reconciliation could even begin between Maduro’s government and his electorate, throughout all the bedlam of the crime in Venezuela, recently named home to the murder capital of the world. One of the many sources of all this chaos are “Colectivos.”, which were created by Chavez to provide community activities and drive forward the socialist revolution.
Unlike ordinary community activity providers, these armed government funded groups work alongside security forces to disperse protests and are accused of spreading instability. Maduro exploits this instability and the fear it breeds, to depict feeble security forces who need more power. In reality he capitalises on public fear and strives to follow Chavez’s fantasy of an authoritarian regime.
Maduro needs to stop thoughtlessly following the detrimental path of Chavez to create a socialist dream state and an authoritarian regime. He must instead introduce economically viable strategies to lift Venezuela from its knees and into the international arena where it belongs.
The key lies in agriculture. By eradicating the ludicrous subsidised oil program to neighbouring nations, Maduro can afford to then invest in the agricultural sector to differentiate the economy. Removing limits on the amount of land which landowners can own will attract businesses whilst re-establishing the landowners who once provided a high crop yield.
That said, he should not abandon the values of equality but must pass legislation to protect the rights of agricultural workers. Creating a fair agricultural taxation system will prevent the growth of the authority and wealth which major landowners once had and which many Venezuelans loathed. The tax revenues can be used to educate smaller farmers and subsidise machinery costs to increase their yield. An increase in agricultural output will increase the supply of most basic goods, and with any luck reduce inflation rates.
Maduro has the option of losing the trust of Venezuelans nationwide and his presidency by continuing to be the puppet of Chavez and fulfil his delusional vision, or to save his presidency and rid Venezuela of its extreme socialism to create a vibrant Venezuela which can reach its full potential and provide a beacon of confidence for South America.