Venezuela At An Impasse

Z.C. Dutka Nov 11, 2015

SANTA ELENA DE UAIREN, Venezuela — It used to be that to learn about Venezuela’s socialist revolution, the reporting of prominent U.S. newspapers would be about as useful as a solitary photo negative; reduced to light and dark, good and evil, the colors would appear reversed, and the chronology of struggle quietly absent.

But while the undertones of doom have been present for over a decade, this year’s 159 percent inflation rate, according to the International Monetary Fund, and a 10 percent decline in the nation’s gross domestic product have raised serious questions about the impact of the economic crisis on ordinary Venezuelans and in turn on the government’s ability to maintain popular support. 

It’s true, the economy is shot. In the past year, oil prices tumbled from $105 per barrel to under $50, cutting the country’s foreign earnings by half. A battered exchange system and booming illegal market has seen the Venezuelan bolívar devalued to the point that the monthly minimum wage was on par with a 36-pack of diapers or a few kilos of dried beans, until President Nicolas Maduro doubled it on October 15.

Car parts are hard to find and vehicles languish in backyards, and between patchy imports and the widespread hoarding and reselling of food by vendors called bachaqueros — a reference to leafcutter ants — scarcity has made grocery lists a fool’s errand.

Despite the best efforts of the state media apparatus — which is in full campaign mode for the December 6 congressional elections — to ignore these realities, it’s impossible not to witness them on the ground.

Across the country, the streets buzz with numbers as friends and strangers compete with stories of outrageous prices: “1,800 bolívars for a kilo of lentils!” “I paid 600 bolos for the taxi home!” 

The official exchange rate for the bolívar has remained at 6.3 to one U.S. dollar since February 2013, but its black market value has tumbled from 110 to the dollar in October 2014 to the current rate of 820.

An Invisible Catch-22

Bachaqueo has mutated into an invincible catch-22, as many wage-earning families make ends meet with profits from illegal sales while simultaneously driving the cycle of inflation with their cutthroat prices. Meanwhile, as more people get in on the business, the lines outside supermarkets with low, government-regulated prices grow ever longer with hardly anyone buying for themselves.

Yet the telling difference between Chavista complaints and those of the opposition is that the former analyze causes, starting with the country’s invariable dependency on oil revenue and a “fast money culture” fomented by the illegal market. For the latter, a tirade of insults against Hugo Chávez, Fidel Castro and Mao Zedong suffices.

The government favors a simplistic defense, accusing the private business sector of sabotage. The Central Bank has avoided releasing any official data on inflation since last year, on the grounds that the country is at war.

Meanwhile, the media chorus against Venezuela has only gotten louder since the March 2013 death of Chávez, the country’s charismatic leader, and the ascension of Maduro, his hand-picked successor. Wall Street seizes every opportunity to forecast default, driving up the interest on Venezuelan bonds. Leading companies have ceased production, either from a lack of imported dollars or as an act of deliberate subversion. 

Since the government instituted a three-tiered foreign exchange system in 2003, there have been phantom importers manipulating the system, resulting in an accumulated $300 billion in capital flight. The manipulations also contributed to scarcity, as many of the items being imported on paper were never actually brought into the country.

Over the years, the buying and selling of subsidized U.S. dollars on the illegal market became the most profitable business in the country, undermining both the program’s intent and the national currency. 

But are the government’s hands tied? Victor Alvarez, an economist and former minister under Chávez, estimated in May that “70 percent [of scarcity and speculation] is due to depletions, deviations and errors in economic policy, while 30 percent is caused by opposing sectors who play at destabilization.”

According to Alvarez, currency controls were set in place as a “temporary measure” to reduce dollar dependency, but the government had no “justifiable reason” to maintain them beyond 2006.

Today, the U.S.-based currency-tracking website DolarToday holds the bolívar in a vise. Its publishers can set off rounds of inflation just by raising the price of the black market dollar on a whim, claiming all the while that their calculations reflect the “objective street rate.”

Earlier this year, in an attempt to undercut the black market, the government launched Simadi, a free-floating rate starting at 172 bolívars to the dollar. At the time the black market rate was 185.

In the weeks following, DolarToday drove the black market rate out of reach, effectively neutralizing Simadi.

On October 23, the Central Bank filed a lawsuit in the United States against DolarToday for cyberterrorism, demanding that it be made illegal for the site to publish unofficial exchange rates and suing for damages. 

While many Venezuelans support the case against the website, leftist critics generally accuse the government of putting more energy into blaming the opposition than into fixing the problems at hand. The lack of official economic data has further alienated Venezuelans who are struggling with inflated prices and don’t see the state corroborating their experience.

Concrete Solutions

However, in the void left by Maduro’s inaction, grassroots activists have turned inwards and begun to seek concrete solutions.

With the help of key ministries that continue to grant money to social movements, these activists have become the motor for a renaissance of small-scale production in this oil-dependent nation.

In Guatire, a working-class suburb of the capital city of Caracas, Alejandro Baiz, a young filmmaker, and a group of volunteers have received funding from the Communes and Housing Ministries to remake an abandoned lot into a center of social production called Territorio Caribe.

The space now boasts greenhouses where local children learn about urban farming, a community news station and an educational space that offers classes on everything from carpentry to natural childbirth.

The Communes Ministry supports Venezuelans in creating autonomous socialist collectives that emphasize self-sufficiency and self-governance, in accordance with Chávez’s dream of gradually replacing the bourgeois state with a communal state. Thousands of these collectives are registered across the country, with the more prolific examples focusing on permaculture and participatory democracy.

“We’re not trying to change the world, only create an alternative from our immediate possibilities,” Baiz explains.

If bachaqueros are the foot soldiers of the economic war, Alejandro and his crew of around 70 volunteers meet them on the proverbial battlefield. By producing homemade soaps, deodorants and shampoos, the people at Territorio Caribe are bringing their communities products most commonly monopolized by bachaqueros.

By selling arepa flour made from yucca, plantain and taro, they are providing a local alternative to the Harina P.A.N. corn flour produced monopolistically by Empresas Polar, Venezuela’s largest private corporation.

Farther from the city lights, Gabriel Garcia, 55, keeps busy organizing against genetically modified seeds with help from the Communes Ministry.

Born and raised on the fertile land of Lara State, Gabriel is behind Venezuela’s decade-old National Campesino Seed Day and the trailblazing International Seed Forum in 2012 to protect organic seeds native to the Americas.

“But it’s not all talking,” promises Gabriel. “We put it in practice, we grow our own food out back. We keep seed banks and make sure they are available to growers.”

Even with the extra labor involved in organic farming, Gabriel says, all-natural and communally grown produce can be even cheaper than conventional counterparts when the high cost of imported agrochemicals and extensive distribution chains are factored in.

Lara has more communes than any other state and a long tradition of subsistence farming. That has, to some extent, protected the region from food scarcity. With government support, the local communes are currently building
defenses against speculation by seeking ways to distribute goods in the state capital of Barquisimeto without intermediaries. 

“We’ve seen more clearly than anyone that the best way to combat the economic war is by producing, by growing, wherever there is free space,” Gabriel insists.

But if the revolution loses the next elections, he warned, free space may be harder to come by.

“Landowners and cattle herders, these people have tremendous power and are looking to regain their empire,” he said, recalling the segregated and exclusive countryside that existed before Chávez’s 1999 constitutional reforms outlawed large rural landholdings.

Upcoming Elections

The international media has hailed the December 6 elections for the National Assembly as a plebiscite on Maduro, but it is highly unlikely that the opposition will win with a majority wide enough to alter the government agenda. A two-thirds majority is needed to revise constitutional law or petition the Supreme Court for presidential impeachment. A three-quarters majority would be required to remove the vice-president or ministers from office.

A poll conducted by the Caracas-based firm Hinterlaces in July saw 67 percent of Venezuelans agree that the opposition garners votes “because of the discontent in the country, but does not have popular backing.” 

Aside from a pervasive anti-Chavista sentiment, the opposition coalition MUD (Democratic Unity Roundtable) is composed of a wide range of parties from reactionary to liberal reformist, with no clear leader nor ideological goals to bring them together.

Currently, a pro-government coalition holds just under two-thirds of the 165 congressional seats.

For Rodrigo Acosta, a Chilean muralist whose family fled the military dictatorship of Augusto Pinochet in 1984 only to settle in Venezuela during the neoliberal era that preceded Chávez, an opposition win would mean disaster.

Harkening back to Salvador Allende’s brief socialist reign in Chile during the early 1970s, Acosta recalls the rightwing congressional majority that blocked every initiative proposed by Allende’s party.

“We have to prepare ourselves to resist,” Acosta says, while clarifying that resistance from here onward should come “from within the organized

Now a longtime resident of the Andean city of Merida, Acosta is part of a vibrant campaign that aims to revive Chavista spirit around the country.

Conceived from a symposium of artists from Bolivia, Argentina, Brazil, Peru and Colombia, the campaign flooded social media recently with evocative
designs of anatomical hearts and veins intertwining across Latin America.

The beating heart is a reminder of “the deep sentiment that still unites us,” Acosta says.

In the past few years, many Chavistas have experienced a “crisis of morale,” he broods. It’s a collective exhaustion that “comes from seeing many of the revolution’s achievements be abandoned and uncared for.”

The goal is to remind people of their role in Venezuela’s participatory democracy, and to echo Chávez’s parting advice to work together toward a communal state.

“We can’t leave everything to the administration, we can’t sit and wait for a solution,” Acosta avows.

Still, as far as the economy is concerned, there’s little indication of when the hard times will end. Many professionals and young artists have left the country in search of better opportunities, leaving devastating gaps in public services. Crime has risen across the board, causing security forces to focus their efforts on blitzes and raids against urban gangs, while the state appears unable to curb petty crime such as bachaqueo, even despite strict new laws. 

The 2016 budget was unveiled in October with emphasis on diversified trade and punctual debt payments, but with imports dropping, many economists have questioned this approach. And according to budget documents provided to Reuters, the official exchange rate of 6.3 will be carried into the coming year, making it unlikely that the illegal market will be weakened.

Venezuela’s social movements have a history of confronting adversity, but 17 years into the Bolivarian Revolution, the epoch of high-minded ideas bolstered by abundant resources is long gone.

The difference will be made in Venezuela by those who see opportunity in its absence, not the opportunity to profiteer and drive the economy further downward, but the possibility of regeneration.

Z.C. Dutka has lived in Venezuela since 2008 and writes for

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