Caracas Chronicles

Original art by @modográfico

The moment when chavismo finally made sense to me came while I was gazing around the duty free shops at Maiquetía airport.

I remember it vividly. It was at the tail-end of one of my trips home. We had just celebrated the Copa América 2007, and the government had spent lavishly on stadiums and festivities surrounding the tournament.

The country seemed drunk on petro-dollars, and all people cared about was scoring more. Everyone obsessed over cupos, credit cards and carpetas. Who you knew – in the government, in the military, at the bank, at the car dealership – determined your access to either dollars or the subsidized things you could buy with them. Caracas was one of the most expensive cities in the world. The city was one giant SUV-ed, breast-implanted, eighteen-year-old-Scotch marinated party.

Nobody cared about creating things. Entrepreneurship became a dirty word. The solar system had been replaced with the Cadivi cupo, and the entire country was orbiting around it.

In the midst of this craziness, I remember stopping by the Swarovski store in Maiquetía Airport. I had seen the little figurines at the Panama airport, but the ones here were priced much cheaper when you used the black market dollar exchange rate. Only then did I realize that they were being priced at the official – and artificially low – rate.

Caracas was one giant SUV-ed, breast-implanted, eighteen-year-old-Scotch marinated party.

In other words, some bastard was getting cheap dollars to import Swarovski figurines, surely pocketing the change and then some.

The realization that the government was, in effect, subsidizing our consumption of Swarovski crystal figurines hit me hard. I then realized that everything, everything, hinged on this.

It’s hard to imagine, but Hugo Chávez did not always control the purchase and sale of dollars. During the first three years or so of his administration, the dollar floated around according to – gasp – the laws of supply and demand. Inflation was relatively low, and XXIst Century Socialism was in its teething stages. Venezuela was normal, revolution-arily speaking.

It was only in 2003, in the heat of the government’s political problems, that the exchange controls still in place today came to be. CADIVI was born.

CADIVI stood for Comisión de Administración de Divisas, and it was the government office through which dollars were sold at below-market rates to specific sectors. If you wanted to import medicine, you got dollars! If you wanted to import food, you also got dollars! If you sold airline tickets in local currency and wanted to repatriate your earnings, here are your dollars! If you wanted to travel overseas, you also got dollars – but up to a limit.

It was money for nothing and trips for free.

Of course, a black market sprouted, one in which the actual price was higher than the official one. Not everyone could get all the dollars they wanted. Buying cheap and selling at market price was the name of the game..

Some bastard was getting cheap dollars to import Swarovski figurines, surely pocketing the change and then some.

And while the economics of CADIVI were ghastly, its politics were sheer chavista genius.

Chavismo can be faulted for many things, but ignorance about Venezuela is certainly not one of them. Everything, from naming the country after Simón Bolívar to the movement’s unyielding militaristic tendencies, is rooted in a profound knowledge of the nation’s symbols and its essence.

Venezuelan society is, in essence, a rentist society. That is why CADIVI made sense. It forced the middle classes and the business elite to focus on something other than overthrowing the government. It zeroed them in on what they do best: scoring oil rents.

Misión CADIVI, as I christened it, became just like any other Misión, the generic name given to government social programs. Like the others, Misión CADIVI was an attempt at political control barely disguised as social policy. People stopped being political opponents and basically became your clients. In picking and choosing who had access to dollars, the government had absolute power to reward and punish whomever it chose. Divide and conquer is the natural offshoot of this perverse strategy.

The place where Misión CADIVI yielded the highest returns was, of course, the military. Who wanted to kick the government out when there were so many petro-dollar bowls to dip your spoon in? It’s no wonder that, in a deliciously frank moment, Aristóbulo Istúriz once said that exchange controls were a “political” measure, and that if they were ever eliminated, the government would be overthrown. He was exactly right.

Cadivi forced the middle classes and the business elite to focus on something other than overthrowing the government.

Of course, CADIVI is gone now, but in its place we have its more dilapidated, Tropical Mierda cousin, the CLAP box. Its purpose – political control – is the same. It’s no more a coherent social policy than CADIVI was. Subsidies are just the way chavismo hands out whatever oil rents it has to potential political opponents. They neutralize society.

As I write this, my mind wanders to 2008, when Misión CADIVI ruled. At the time, the term didn’t catch on. On this blog, I railed against what CADIVI was doing to us as a society, but people wouldn’t listen. In fact, the opposition ran on a platform to preserve the misiones that were, essentially, deeply enslaving. Opposition candidates did not dare say they would do away with CADIVI. They lionized the very tool that was killing us.

That year I went to the wedding of a dear friend, only to be shocked at the luxury surrounding the event. I listened to stories of the Caracas’ elite partying – the furniture brought in from France, the ice sculptures shipped from New York, the non-stop sushi bars. The middle class, obsessed with flying overseas to raspar el cupo, was also part of this. 35,156 billion dollars were allocated to subsidized credit card and travel expenses over the course of 14 years. The hangover from this binge is now evident in the face of kids eating from the garbage.

Venezuela was too busy being subsidized to think about the consequences. In exchange, all the government asked was that you tacitly agree to be enslaved.

It worked magnificently.