Last week a Reuters investigation detailed how more than half of public investment churns into secretive funds controlled by Chavez with no oversight by auditors or congress.
One fund, called Fonden, swallowed about US$100 billion. Some was spent on white elephants — an abandoned newsprint factory, a “city of aluminum” — and on ill-fated investments in Ecuadoran bonds and Lehman Brothers-issued derivatives. In a functioning, accountable democracy this would be a huge scandal, but Venezuela’s government — plus state prosecutors and media — ignores it.
“That is not Chavez’s money. That money belongs to 29 million Venezuelans and as such the information should be available to everyone,” said Carlos Ramos, an opposition legislator.
Harassing the private sector — investment evaporated amid expropriations — and bungled management of multiplying state enterprises translated into shrivelled agriculture and industry. Huge imports fill the gap, though you would never guess it from Orwellian rhetoric trumpeting “food sovereignty” and “manufacturing independence.”
The result is increased dependence on oil, now accounting for 96 percent of export earnings versus 80 percent a decade ago. That is why so many Venezuelans end up on pavements selling knick-knacks (they are counted as employed), or watching the clock in decaying state enterprises.
This does not add up to collapse. There are always petrodollars to stuff into cracks. However, analysts say that, regardless of who wins the election, Venezuela faces a grim economic reckoning. The economy is growing now only because of a splurge in government spending and borrowing, mostly from China.
In the headquarters of PDVSA, his office overlooking Avenida Libertador, one of Chavez’s top oil officials told me that the boss started as a pragmatist, but turned ideological after opponents tried to oust him in a 2002 coup and general strike — soon after which oil revenues began booming.
Then, in hushed tones of heresy: “It was a historic opportunity that was wasted. He doesn’t understand economics. Chavez doesn’t know how to manage. As a manager he’s a disaster.”
Venezuela’s revolution has no gulags, no torture chambers, but in wasted potential lies tragedy. Here was a sublimely gifted politician with empathy for the poor and the power of Croesus — and the result, fiasco.
Neither side likes to acknowledge it but the revolution is in many ways a continuum of oil-fuelled populism dating back half a century, notably that of the giddy, spendthrift 1974-1979 administration of Carlos Andres Perez, the mercurial president Chavez tried to overthrow in 1992. The difference is Chavez had even more money, more power, more showmanship.
It was easy to overlook the blunders while he strutted the stage, singing and dancing, blowing kisses, riding a bike, a horse, a tank, holding court from his desk, blending folk tales with ideological thunder, commandeering airwaves to talk and talk, sometimes for eight hours straight, oratorical marathons which exhausted aides, paralyzed opponents and sucked up the oxygen.
If Chavez were healthy he would have walked this election, his skills of enchantment steeled, as ever, by control of state resources and institutions. Instead, he has rationed his public appearances and relied on television to simulate the magic of old while his youthful opponent, Henrique Capriles, bursts into villages, towns and cities denouncing their dilapidation.