Is Venezuela Headed to Become Cuba?

On September 28, 2010 voting took place for the National Assembly, due to commence on January 5th 2011; the result of the election is that the opposition, who decided to boycott the last elections in 2005 and thus handed President Hugo Chavez complete control of the Assembly, gained approx. 40% of the 165 seats (note that the opposition in fact gained more than 50% of the popular vote, but blatant gerrymandering by Chavez before the election meant that they ended up with proportionately fewer seats.

Since the elections tensions have risen in Venezuela in recent weeks as Chavez has been put into an uncomfortable position as he requires a two-thirds majority to pass important legislature, and that will be very difficult given the seats to be controlled by the opposition.

There have been a series of articles published that express increasing concern that we would like to examine here and ask the question as to whether Venezuela really is headed to become Cuba? This is taking place at a time when Cuba, which is highly dependent on significant transfers of oil of around 100,000 barrels per day from Venezuela to balance its finances, appears to be headed in a different direction.

The economy, after several years of rapid growth, has been the worst hit in Latin America and is not forecast to start growing again until 2012, inflation at 28% is one of the highest rates in the world, and there is a significant budget deficit – Oil production, on which Venezuela depends for FX and government revenue, appears to be in significant decline and the state company, PDVSA, is poorly run and over staffed. In addition, importers face a plethora of highly bureaucratic obstacles to obtain FX through three different schemes (in addition to a black market for those brave or desperate enough).

On December 17 Chavez used his control of the Assembly to put through an Enabling Law, called a Christmas gift to Chavez by the Economist Intelligence Unit. The Enabling Law has been put in place just before the opposition take their seats using the pretext of recent floods in Venezuela, and in essence allows Chavez to rule by decree, without the support of the National Assembly, for 18 months. According to the BBC “His new powers extend beyond relief and reconstruction to cover areas including infrastructure, banking and finance, rural and urban land use, telecommunications, defence and security.”

On December 20 the BBC has also reported that the Venezuelan parliament has voted to tighten internet rules, which could lead to further censorship in a country where several news organizations that Chavez believes are favoring the opposition have been harassed or even closed down.

Miguel Octavio, who runs a great weblog in English on Venezuela called The Devil’s Excrement (which is a term coined by a Venezuelan poet for oil in case you are wondering), is very concerned and goes so far to say “To all those that always say that Venezuela is a democracy under Chavez, the President’s proposal that the Enabling Bill extend for up to 18 months is simply a Constitutional coup and a disregard for the mandate given by the people to the new National Assembly that will be sworn in on Jan. 5th.”

Armando Duran, Resident Fellow at the University of Miami’s Center for Hemispheric policy has just published a paper “Cuba and Venezuela: Long Live the Revolution!” in which he concludes “Under the Cuban banner of “socialism or death,” now begins a new stage in the transition from representative democracy to totalitarian socialism in Venezuela, with unknown consequences for the rest of Latin America.”

Chavez himself faces presidential elections just before the Enabling Law ends in 2012, and now observers at looking at his administration to see whether any semblance of democracy survives. The real test will come if Chavez loses the popular vote in 2012, as it seems unlikely that he will hand over power peacefully. There is far greater risk of violent confrontation between supporters of Chavez and the opposition and social unrest in the months ahead.


3 Responses to Is Venezuela Headed to Become Cuba?

  1. turbut says:

    Cubanismo is unlikely ever to work in Venezuela and Chavez will most likely become a victim of his own socialist policies. Nothing damages a government`s reputation more than high inflation rates, which hurts everyone, including the poor and the working class, where most if not all his supporters are found. Cuba has already indicated that keeping hundreds of thousands of people on the government payroll is unsustainable in the long run. It is likely that violence in the streets will take place, whether Chavez wins or loses in 2012. Like I have said in my last post, ruling by decree has not been seen since Hitler was in power. The results of that is still fresh in my memory.

  2. Thanks for this post. I almost certainly agree with what you are saying. I have been talking about this subject a lot lately with my father so may possibly this will get him to see my point of view. Fingers crossed!

  3. Turbot says:

    I have spent a year in Venezuela and therefore have some knowledge to the social conditions there. Chavez is taking The Pueblo down a track that leads to nowhere and, even though the country has enormous oil reserves, it takes time and money to develop them. The only real economically viable market for the oil is in the Americas and that market could potentially shrink for Venezuela, given that resources are being developed elsewhere thus creating less dependence on foreign (Venezuelan)oil, for clearly, if oil can be obtained from other markets in the Americas, few, if any, will deal with Venezuela, as long as Chavez is in power.
    The socially underprivileged in Venezuela are being exploited and manipulated to keep Chavez in power, but freedom is an ingrained feeling in all humans and El pueblo Venezolano will hopefully soon see Chavez for what he is.

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