Venezuela political crackdown accompanies economic chaos

For a glimpse into Venezuela’s economic disarray, slip into a travel agency here and book a round-trip flight to Maracaibo, on the other side of the country, for just $16 (€14).

Need a book to read on the plane? For those with hard currency, a new copy of 50 Shades of Grey goes for $2.50. Forget your toothpaste? A tube of Colgate costs 7 cents.

Quite the bargain, right? But for the majority of Venezuelans who lack easy access to dollars, such surreal prices reflect a tremendous currency devaluation, a crumbling economy expected to contract 7 per cent this year, as oil income plunges and price controls produce acute shortages of items including milk, detergent and condoms.

“I’ve seen people die on the operating table because we didn’t have the basic tools for surgeries,” said Valentina Herrera (35), a paediatrician at a public hospital in Maracay, a city near Caracas.

She said she planned to look for other work because making ends meet on her salary of 5,622 bolívars a month - €29 at a new exchange rate unveiled recently - was impossible.

Tumbling ratings

Faced with tumbling approval ratings as Venezuelans reel from the economic shock, President Nicolás Maduro is intensifying a crackdown on his opponents, reflected in last week's arrest of Antonio Ledezma, the mayor of Caracas, and his indictment on charges of conspiracy and plotting a US-backed coup.

Maduro, a protégé of former president Hugo Chávez, who died in 2013, has adopted an increasingly shrill tone against critics of Venezuela’s so-called Bolivarian Revolution.

As evidence against the opposition, Maduro pointed to an open letter this month calling for “a national agreement for a transition” that was signed by Ledezma; Leopoldo López, another opposition figure who has been imprisoned for the past year; and María Corina Machado, an opposition politician charged in December with plotting to assassinate Maduro.

"In Venezuela we are thwarting a coup supported and promoted from the north," Maduro said over the weekend on Twitter. "The aggression of power from the United States is total and on a daily basis."

Maduro is taking a page from Chávez, who was briefly ousted in a 2002 coup with the Bush administration's tacit approval, then made attacking Washington and locking up people suspected of being putschists a fixture of his government. But the US State Department has disputed Maduro's claims, saying the US is not promoting unrest in Venezuela.

At the same time, the move by Maduro points to a hardening in how opposition figures are treated. Thirty-three of the 50 opposition mayors in the country face legal action in connection with anti-government protests last year which left 43 people dead, according to Gerardo Blyde, the mayor of Baruta, a Caracas municipality.

One prominent opposition mayor, Daniel Ceballos of San Cristóbal, has been in jail for the past year, while another, Enzo Scarano of the industrial town of San Diego in Carabobo state, was transferred from jail to house arrest last month because of deteriorating health.

Wisdom questioned

The arrest of Ledezma (59), who was democratically elected but had much of his authority stripped away in 2009, has even some pro-Chávez analysts questioning the wisdom of Maduro’s move.

While Ledezma joined a hardline faction of the opposition last year called “the Exit”, he was not viewed as especially prominent or influential.

“Fuelling suspicion is a distraction tactic from the huge currency devaluation we’ve had to withstand,” said Nicmer Evans, a pro-Chávez political consultant who is among those on the left here now openly criticising Maduro. “What’s not clear is the proof of wrongdoing in this case.”

With inflation soaring to a rate of 68 per cent, the Venezuelan authorities are seeking to manage the economic crisis with a complex web of three official exchange rates.

For instance, some basic goods are imported at rates of 6.3 and 12 bolívars to the dollar, but a new floating rate of about 171 was introduced last week, effectively reflecting a devaluation of nearly 70 per cent.

On the black market, which some Venezuelans use to carry out basic transactions, the rate is even higher, at around 190 bolívars to the dollar.

Even for some Chávez loyalists, Maduro seems to be in over his head in dealing with the scramble for hard currency. Jorge Giordani, one of the late president's top economic advisers, said this month that Venezuela was emerging as Latin America's "laughing stock", citing corruption and labyrinthine bureaucracy as factors accentuating the economic quagmire.

“We need to acknowledge the crisis, comrades,” said Giordani, whom the president ousted last year as finance and planning minister.

Indeed, some economists say that the government’s reluctance to overhaul its perplexing currency controls could intensify Venezuela’s economic problems.

“The system is going haywire,” said Francisco Rodríguez, chief Andean economist at Bank of America Merrill Lynch, emphasising that galloping price increases could soon enter the realm of hyperinflation, accelerating to triple digits this year and to more than 1,000 per cent in 2016 if current policies are maintained.

Changes needed

Maduro seems to recognise that some profound economic changes are needed in Venezuela, which commands the world’s largest oil reserves, creating the illusion of inexhaustible wealth.

He supports raising the price of gasoline, which costs less than 10 cents a gallon at the strongest official exchange rate; there is considerable resistance to such a shift even though the fuel subsidy costs the government more than $12 billion a year.

But ahead of congressional elections this year in which Maduro’s supporters seem vulnerable, the president is also seeking to shore up his base.

Despite the widespread complaints about economic hardship and high levels of violent crime, some in Venezuela remain loyal to Maduro out of gratitude for a vast array of social welfare programs.

“I’ll vote for Maduro until I die,” said Marco Miraval (77), who sells coconuts in 23 de Enero, a sprawling housing complex that is a bastion for pro-Chávez groups, pointing to Maduro’s support of subsidised university education and health care. He said Venezuela’s economic problems were a result of Washington’s pressure on the government.

“It’s because they’re being sabotaged by this economic war,” Miraval said. Still, while Venezuela’s opposition remains divided and hampered by the arrests of some leading figures, Maduro lacks the oratorical skill of Chávez, who skewered his opponents in what often seemed like a stream-of-consciousness approach to governing that kept many Venezuelans on the edge of their seats.

“Maduro is trying to consolidate his leadership without having the charisma to do so,” said Margarita López Maya, a historian who studies protest movements, describing his latest moves as amounting to “an excess of authoritarianism”.

In the meantime, bizarre prices persist for many basic services, punishing those who earn and save in bolívars while benefiting an elite with access to hard currency in bank accounts abroad.

For instance, monthly broadband service from the state telecommunications company costs less than the equivalent of $1. The monthly electricity bill for a huge luxury apartment, with air-conditioning on at all hours, comes to less than $2.

Even that absurdly cheap flight to Maracaibo is more complicated than it appears since some airlines have trouble obtaining the dollars they need to import spare parts and maintain their planes.

“You’ll see things you’ll never believe: half a dozen aircraft from just one airline just waiting on the ground because they don’t have parts,” Nicolás Veloz, a pilot based in Caracas.

For some Venezuelans who are struggling to get by, the economic disorder they see around them explains the president’s targeting of his opponents.

“Maduro is terrified, and so he’s using more totalitarian methods, putting politicians in prison with so many police,” said Eduardo de Sousa, (28), a pharmaceutical lab assistant. “They know that the revolution is over, and they’re scared.”

New York Times service