March 5 was the second anniversary of the death of Hugo Chavez, former president of Venezuela. During his time as president, Chavez led the “Bolivarian Revolution,” nationalizing petrol companies, increasing oil drilling and using that increased revenue to create massive social service systems. Bolstered by rising oil prices, Chavez was able to forge nearly a decade of economic growth for Venezuela. As a result of such strong economic growth and the breadth of the social services he extended to Venezuela’s citizens, Chavez came to be a revered leader, creating “Chavismo” or the cult of personality that existed around his person and his policies. Towards the end of his life, Venezuela’s economy began to slow, but, until his death, Chavez was still honored widely; after his death, for example, there was a failed attempt to embalm his body and set it in a glass case on permanent display. When his health took a turn for the worse and his death seemed imminent, Chavez was able to handpick his successor and essentially ensure them electoral victory. However, his successor has faced an uphill battle as the public and the media have invoked constant comparisons to Chavez and measured the “Chavismo” of the successor.
It turns out that successor, President Nicolas Maduro, does not measure up very well. Without even delving into his policies, Maduro has failed to garner the love and adoration of the Venezuelan people. Where Chavez had charisma and strong populist appeal, Maduro is awkward and fails to energize the Venezuelan public. Initially, Maduro was fairly popular; he portrayed himself as the natural successor to Chavez, and especially after the former leader’s death, this buoyed his support. Maduro has continued to invoke the ghost of Chavez (sometimes literally) in order to garner whatever support he can from his Chavez’s legacy. However, in the years since Chavez’s death, the Venezuelan people have realized that Maduro has done little to deserve the same fervor as his predecessor.
Without a safety net granted by a cult of personality and the adoration of your people, a leader is forced to rely on managing a country effectively—something Maduro has also failed to do. Even at the end of Chavez’s life, it seemed as if economic hardship was imminent. Since then, the deficit, burdened by extensive social services, has continued to grow, continuing to drive up the price of foreign goods and causing widespread inflation. The country is now experiencing upwards of 60 percent inflation, with many struggling to purchase basic goods. With expensive foreign imports and a tight government grip of foreign exchange markets, manufacturers are not able to buy raw goods (like lumber, metal, and others) from other countries to create a large enough supply of basic goods. For the past year and a half, the Venezuelan people have been experiencing shortages of basic items like cooking oil, detergent, soap, toothpaste, and most of all, toilet paper. An economy is suffering when its citizens stop buying cars, houses or large appliances. It is another story entirely when the country has shortages of basic goods due to the manipulation of foreign exchange markets as the government attempts to boost exports at the expense of driving up the import prices. The global drop in oil prices, the lifeblood of the Venezuelan economy, has piled on top of the already dire economic situation. This poor economic outlook has led to widespread protests over the past year. These protests recently resulted in the tragic death of a 14-year-old boy at the hands of the police, which triggered even more intense protests. What started as an economic crisis has spawned widespread anti-government sentiment, turning the situation into a serious social issue. All of this together has driven the approval rating of Maduro down to 22 percent.
So with an economy in turmoil, social unrest and only 22 percent of citizens supporting him, how has Maduro responded? The short answer is that he basically has not. The longer answer requires a look at the policies he has instituted, which in the eyes of the Venezuelan public have not amounted to much. Maduro has essentially insisted that he is continuing the policies of Chavez in an effort to complete the Bolivarian Revolution that the former leader started. The few actions he has taken amount to very little. He has sought, and received, decree powers over the economy. He has arrested business owners for supposed price gouging. He has extended a line of credit to increase toilet paper production. And he has taken over a toilet paper factory, if only temporarily. All of this has done very little to substantially improve the economic situation of Venezuela, aside from restocking the toilet paper of homes.
Following in the footsteps of Chavez, Maduro has tried to smooth over times of hardship with rhetoric. He has repeated the tried and true line of blaming it on the United States, which by now has few economic ties to Venezuela and in no way could or would drastically influence the Venezuelan economy. He has even used this line to expand his powers to protect the country from “imperialist” US intentions. Without the charisma of Chavez, this invocation of nationalism has failed to inspire much of anything in the Venezuelan people, least of all economic confidence. And where that has failed, Maduro has made one last attempt at using fiery rhetoric by invoking God.
Religion and rhetoric may be vital parts of economic strength. Economics is, after all, just as much about confidence as it is about cold, hard numbers. Some of the policies that Maduro has enacted were necessary, and some were just fueled by hot air. However, what Venezuela needs right now is more than rhetoric and patchwork policy. Venezuela needs an overhaul. It is clear that the social services network of Venezuela worked well in times of economic boom, and can be boosted by rising oil prices. But it is also clear that this network is not sustainable in the long term. Venezuela needs to change its social services. They must be pared down, stripped of inefficiency and graft, and focused on only the neediest. Furthermore, the future of the Venezuelan economy is dependent on diversification. Whereas a dependence on oil reserves (of which it does have the second most in the world) is sufficient when oil prices are rising, economies can be wrecked as soon as such prices fall. Finally, the country needs to get its monetary house in order, by stemming the tide of inflation and easing restrictions on foreign exchange markets in order to make imports more affordable. These policies, in the short term, may not have the public support they need, but with the Socialist Party dominating the Assembly, Maduro still can push through drastic reforms. Maduro can no longer survive politically simply by invoking Chavez and reminding people that he was Chavez’s chosen successor. Instead, this is an opportunity for Maduro to define himself as his own leader, and he must move beyond rhetoric and slow moving patchwork policy, ultimately redefining the way the Venezuelan government interacts with the economy in order to set the nation back on the right path.