Dispatch

Empty Shelves and Coup Plots in Venezuela

President Nicolás Maduro faces a teetering economy and an angry population. So he's turned to a favorite target -- America.

A man attends a protest against the government of Venezuelan President Nicolas Maduro in Caracas on February 23, 2014. A total of 25 people were injured overnight during clashed between opposition groups and police in eastern Caracas. On Saturday the lasgest opposition rally had taken place after almost three weeks of students protests, which left ten people killed. AFP PHOTO/ Raul Arboleda        (Photo credit should read RAUL ARBOLEDA/AFP/Getty Images)
A man attends a protest against the government of Venezuelan President Nicolas Maduro in Caracas on February 23, 2014. A total of 25 people were injured overnight during clashed between opposition groups and police in eastern Caracas. On Saturday the lasgest opposition rally had taken place after almost three weeks of students protests, which left ten people killed. AFP PHOTO/ Raul Arboleda (Photo credit should read RAUL ARBOLEDA/AFP/Getty Images)

CARACAS — Venezuela is in a bad state. The country’s economy is forecast to contract 7 percent this year. Shortages of basic foodstuffs are mounting. Soap and diapers have become luxury items. Crime rates are soaring as poverty rises.

So it’s little surprise that polls show that the ruling party can expect a drubbing in congressional elections that are expected to be held later this year. President Nicolás Maduro is in a bind. What can he possibly do?

The answer, it seems, is an easy one: trot out a conspiracy. Taking a page out of his mentor Hugo Chávez’s playbook, Maduro announced on Feb. 12 that he was the target of an assassination attempt. According to the president, junior officers of the country’s air force planned to bomb the presidential palace with a small training propeller plane that would have taken off from an airfield in Colombia.

Days later, the mayor of Greater Caracas, Antonio Ledezma, who is also a leading member of the opposition, was seized from his office by heavily armed security personnel and charged with complicity in the supposed coup plot. He was carted off to the same military prison where opposition leader Leopoldo López has been held in isolation for more than a year.

Maduro scathingly attacked his domestic opponents, but he saved his most biting criticisms for the United States, which he said was coordinating efforts to overthrow his regime. Maduro said U.S. diplomats in Caracas were “continuing to call military officers, trying to buy journalists, columnists, and leaders.”

“Nobody messes with Venezuela,” Maduro said during a televised speech on Feb. 23 from the western state of Yaracuy. “Respect Venezuela, you fucking Yankees. Respect our country. Enough is enough.”

The U.S. State Department denied all of Maduro’s charges. Instead, Washington, Amnesty International, the Organization of American States, and even Brazil, a sometimes ally to Caracas, expressed concern about the deteriorating political situation and called for dialogue between Maduro and his opponents.

Maduro styles himself a son of the late president. The former bus driver served in a variety of government posts, including foreign minister, before being handpicked by Chávez to be his successor. So it’s little surprise that Maduro thinks that what worked for the old boss will work for him: During his 14 years in office, Chávez “discovered” 19 assassination plots that, oddly enough, often coincided with when his regime was beset by economic and political problems. Proof be damned.

“Maduro’s strategy is to decapitate the opposition, demoralize their backers, and perhaps provoke certain members of the opposition to radicalize their positions and allow him to postpone congressional elections,” says Caracas-based political analyst and historian Margarita Lopez Maya. “He also wants to distract people from the economic problems they’re facing.”

If Maduro’s claims about the coup plot were intended to take his compatriots’ minds off the country’s pressing problems, though, he seems to have failed. On Tuesday, Feb. 24, more than 500 people waited patiently in line in the industrial city of La Victoria when scarce cornmeal and pasta arrived at the Morichal supermarket. Members of Venezuela’s National Guard stood out front to keep order.

“I really don’t believe anything Maduro says anymore. According to him, there’s a conspiracy,” said Wiliany Campos, a 23-year-old housewife, who calculated she had at least a two-hour wait until she could enter the store. “But he also said we have no economic crisis in Venezuela! So why am I going to have to wait hours in line to buy cornmeal?”

Shortages of basic foodstuffs, medicines, toiletries, and car parts, such as batteries and tires, have reached critical levels. Disposable baby diapers can now only be purchased by mothers who can produce a recent birth certificate. At state supermarkets, shoppers are restricted to how much they can buy each week and have their fingerprints scanned before being allowed to take groceries home.

The drop in oil prices that began last June has been disastrous for Venezuela, which boasts the world’s largest crude reserves but hasn’t been able to develop them. Oil production continues to fall, and the state oil company has gone heavily into debt while advancing the government money to fund social programs and political campaigns. And unlike Saudi Arabia, Kuwait, or the United Arab Emirates, Venezuela didn’t set aside a rainy-day fund during the years of record-high oil prices. Instead, Chávez spent lavishly on social programs and infrastructural projects, many of which now languish uncompleted. The country’s fiscal deficit could reach 15 percent of GDP this year. Corruption and military purchases accounted for billions lost too, while handouts to Cuba, Nicaragua, and Bolivia are estimated to have cost up to $30 billion over the last decade.

Inflation, which last year topped more than 60 percent, may hit triple digits this year, economists warn. The country has already won the dubious honor of having the world’s highest inflation rate for 2013 and 2014.

“Is arresting Ledezma going to end the lines to buy food?” opposition leader and Miranda state Governor Henrique Capriles Radonski said at a Feb. 20 news conference. “What does Nicolás want with this? To end the crisis?”

Capriles and the opposition charge that the Maduro government’s policies, such as foreign exchange controls, price controls, and nationalization of private companies, have gutted the economy and created the current crisis.

Maduro is sensitive to the criticism, especially when it comes to the foreign exchange controls and the black market for U.S. dollars. Over the last three years, the gap between the official and black market exchange rates has soared. The official exchange rate is 6.3 bolívars to the dollar, while the black market rate is 200. To reduce the black market rate, the government announced a new trading system this month, bringing back a theoretically free dollar auction overseen by banks and brokerages that Chávez abolished in 2010. The initial results have been less than ideal, economists say, because the government isn’t making enough dollars available and transparency is lacking.

The shortage of hard currency is taking a toll on nearly all aspects of commerce. “We have no seeds, fertilizers, insecticides to sell,” says Roberto Chávez, who runs a feed store in the central agricultural city of Cagua. “The problem is that the government hasn’t given importers dollars to bring things in.… Our supplier told us that there is fertilizer, but he can’t sell it to us because there are no bags to put it in. The bags are imported, but no one gave them dollars to bring them in. So the fertilizer stays at the plant.” In an economy that imports roughly 70 percent of the products it consumes, the result is paralysis.

Maduro blames the country’s woes on “an economic war” waged by opponents of his regime. This month, security personnel arrested the owners of the Farmatodo drugstore chain, accusing them of hoarding products and creating shortages of drugs.

According to the latest credible polling, released in January, less than a quarter of Venezuelans still support Maduro, down from about 50 percent in April 2013. More than 70 percent want the president to leave office before 2019, when his term expires.

But internal divisions have hindered the opposition’s ability to capitalize on Maduro’s weaknesses. Whereas Capriles is calling for Maduro’s opponents to focus their efforts on the upcoming congressional vote, other opposition leaders such as Ledezma and López called for a more confrontational approach of street protests. The national electoral agency — which is packed with Maduro supporters — has yet to set a date for the vote. The opposition hopes to hold a primary in early May to select its candidates.

It’s likely the government will continue to crack down on the opposition and selected business leaders, using them as scapegoats for the failure of its policies, says Risa Grais-Targow, a Venezuela analyst for the consultancy Eurasia Group. But such a policy runs a risk of spontaneous street demonstrations, especially if the shortages continue.

For Margarita Oliveros, a 52-year-old housewife in Caracas who makes ends meet by selling soft drinks and snacks from her house in the working-class neighborhood of Catia, Maduro’s talk has already grown stale. “Maduro is obsessed with Obama and Colombia, coups and plots,” she says while waiting in line at a small neighborhood supermarket rumored to have milk. “I just wish he would worry more about us.”

Photo credit: RAUL ARBOLEDA/AFP/Getty Images

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