On February 17, 2014, a defiant man brandishing the Venezuelan flag marched, restrained by military personnel, through the streets of the nation’s capital. The man was Leopoldo Lopez, the country’s opposition party leader and the face at the forefront of Venezuela’s anti-Maduro protests. He was shoved into a government van amongst fervent screams and fists raised in the air from the crowd of protesters around him. That same day, Lopez was transported to the military prison, Ramo Verde, where he remains today.
The imprisonment and sham trial of Leopoldo Lopez constitutes only one example of the corruption devouring the Venezuelan government. Since Chavez’s rise to power and promotion of his “anti-corruption” platform, the country has actually seen a massive increase in money laundering, abuse of power, and other forms of corruption. Coincidentally, or perhaps consequently, this trend has developed at the same time that Venezuela’s middle class has become the weakest in the nation’s history. The link between corruption and abuse of power and the country’s economic woes helps to explain the dangerous encroachment upon fundamental rights and fair representation that is now a prominent feature of Venezuela’s political scene.
Before Chavez: The Crown Jewel of Latin America
In the 1970s and early 1980s, Venezuela was the most coveted destination in Latin America. Hundreds of thousands of tourists each year flocked to a country where income was higher than any other Latin American nation and natural resources were abundant. It seemed to those who lived both in Venezuela and outside that the country’s leaders—at the time Rafael Caldera and Carlos Andres Perez—were doing a good job. The lasting effect was the progression of the middle class during these crucial years before Chavez’s reign.
The middle class during the Caldera and Perez administrations was stronger than it had ever been before. It represented 28 percent of the entire population—one of the strongest in South America. This was a segment of the population that had power at the polls, increasing exposure to university education, and, perhaps most importantly, political potential. But the relationship between this growing middle class and the governments of Caldera and Perez is important to assess in order to gain knowledge about Venezuela under Chavez today.
In an interview with the HPR, Jose Antonio Colina, president of activist group Venezolanos Perseguidos Politicos en el Exilio, emphasized that the Venezuelan government under Carlos Andres Perez (1989-1993) in particular prioritized small business growth and good management of burgeoning Venezuelan petroleum resources. In particular, his first term saw immense success in private sector growth.
The country’s strong economy during this era, but more importantly its robust middle class, had important consequences for public-sector responsibility. Colina, as a former Venezuelan army lieutenant, told the HPR that although there was corruption present during Perez’s time in government, it was not nearly as expansive as it has become in modern day. In his experience, “important political players and allies of the government sometimes influenced the Venezuelan military … However, the corruption under Carlos Andres was delegated to infrequent, specific cases and wasn’t as sweeping or general as it is now.”
It is true that Perez and Caldera were by no means saviors of the middle class and even sparked ample political dissent amongst them. But the reason their corruption did not reach its current monumental heights (158 out of 168 on the Corruption Perceptions Index for 2015) was because of the middle class’ presence and political mobility. The middle class, made up mostly of small business owners and workers, according to Colina, pressured the Venezuelan government to maintain a certain standard of transparency. And as the class with the most buying power, their influence held considerable weight.
The connection between less corruption and a strong middle class in Venezuela is supported by academic literature that suggests that a weak or absent middle class allows abuse of power. The scholarly consensus seems to be that when the middle class, objectively the most politically powerful class due to their social mobility, is weak, countries lose their strongest advocates for transparency. When Chavez rose to power, this connection was fully exposed.
The Death of the Middle Class and the Rise of a Dictator
Hugo Chavez’s ascendance to power was, in the eyes of many, a beacon of hope for Venezuela. To a large portion of the population, it appeared that Perez had prioritized the interests of players in the petroleum market over the common man. The lower classes and some of the middle class, feeling disenfranchised and unappreciated by their leaders, united to elect Chavez to the presidency in 1998.
Chavez was supposed to be the leader who would pay attention to the concerns of the poor and the needy, who would speak and act for the people. Instead, Chavez decimated the middle class, ramped up government corruption, and allowed abuse of power. Colina remembers a time when the middle class was still strong, but under Chavez and later, Maduro, “the middle class has disappeared.”
Chavez’s economic reforms ultimately caused the decimation of the Venezuelan middle class. In an interview with the HPR, Ricardo Haussmann, former Venezuelan Minister of Planning and current Harvard professor, detailed Chavez’s nationalization of various industries and rampant public spending as contributors to an economy careening out of control. Haussmann remembers Chavez “nationalizing steel, cement, [and] supermarkets,” decimating private Venezuelan businesses in the process. Additionally, he told the HPR, Chavez and his administration borrowed money at exorbitant rates, acting “as if the price of oil was at $197, even though at the time it was at $100.” Ultimately, Chavez used the period of high oil prices from 2004 to 2013 to “quadruple public debt and put no money aside for a rainy day.” This surge in public debt created the conditions necessary for contemporary hyperinflation, which has incentivized the middle class to migrate out of the country in droves. This is “the first time that has ever happened in Venezuelan history,” Haussmann said of the exodus. The middle class “was decimated.” And the ramifications spread beyond GDP figures.
The link between the middle class, its power, and government corruption had already been exposed in Caldera and Perez’s administrations. But this connection was even more apparent in the Venezuela under Chavez. Between 1999 and 2013, several systemic changes allowed for the institutionalization of corruption. The first was the centralization of all military branches and their budgets under the National Department of Defense, which came during an era of broader public- and private-sector consolidation. Before Chavez, each branch of the military handled its own budgets and affairs while doing some reporting to the centralized National Department. But that all changed under Chavez’s command, and suddenly came large amounts of money that no one seemed to be able to track, according to Colina, who was a military officer at the time. Without the middle class to institute any checks or balances and press for the monitoring of cash flows, dark money was able to circulate through the military with relative ease.
“The government knowingly centralized these branches with the intention of controlling operative branches and arms deals, all with the end goal of making money,” Colina told the HPR. And with a weakening middle class unable to protest or make concrete change, there was no way to stop the fraud. As a result, corruption grew under Chavez, manifesting itself in other incidents.
Another abuse of power by the government was the increased support from the Chavez administration to guerilla groups crossing the border from Colombia to Venezuela. Once Chavez came to power, Colina argued, guerilla troops from Colombia were slowly but surely accepted and settled primarily in the areas of Alto Puro and Maracaibo. In fact, the Chavez administration eventually began to provide these dangerous groups with logistical resources, such as funding and even weapons, without parliamentary authorization and against the wishes of the people. It was revealed that the primary motivation for this funding was guerilla support in the event of a US led invasion or other plots to oust Chavez and his supporters.
These and other events built Chavez’s empire of rampant corruption. The fact that this abuse of power correlated so exactly with the disappearance of the middle class in Venezuela paints a bleak picture for the future.
Venezuela Today: Authoritarianism On the Verge of Collapse
In the minds of many Venezuelans today, Nicolas Maduro is essentially a less threatening version of Chavez. Under Maduro’s reign, the middle class in Venezuela technically makes up 19 percent of the population. But when quality of life is accounted for, Venezuelan families who actually meet standardized middle-class qualifications are merely 5 percent.
Colina and Haussmann both told the HPR that the main reason for the flight of middle class Venezuelan citizens to the United States and other developed nations is the fact that the Chavez and Maduro administrations have “destroyed the small private businesses” and national economy that sustained the middle class. Now, in Venezuela, there are two clearly defined classes: the lower class and the upper echelon. Most of those who belonged to the middle class in the days of Caldera and Perez either were lucky enough to leave the nation before their bankruptcy or sunk into working-class status or worse.
And the instances of corruption have not decreased with Maduro’s presidency. Maduro’s administration has committed 287 free speech violations in Venezuela, made up mostly by the censorship of national and foreign media organizations. The arrest of Leopoldo Lopez in February of 2014 was one of the most prominent instances of injustice and government oppression in recent Venezuelan history. Lopez was denied the right to run against Maduro and his trial was determined by judges who were “political extensions of a Chavista government,” as Colina described.
It is unlikely that Venezuela’s political future will brighten in the near future. If there is not a safe, stable environment for resumed middle-class growth, the corrupt government will not be stopped anytime soon. After the eras of Caldera and Perez, the world watched as Venezuela’s economy failed, crime skyrocketed, governmental fraud and trickery grew, and the middle class was decimated. If nothing is done, cases like that of Leopoldo Lopez could multiply until the Venezuelan government is consumed by corruption.
Image Source: Flickr/Dorwis Gómez