Caracas Chronicles

It was a year where political change looked closer than ever in two decades of chavismo. However, hope dissolved again. But this defeat was different: it left an entirely different Venezuela.

One is tempted to think that Hugo Chávez is rolling in his grave at Cuartel de la Montaña when he looks at the country Maduro rules over. There’s not much left of that gigantic State made of almost 30 ministries; all kinds of Missions and other social programs that kept a strong grasp on the needs and loyalties of the masses; a plethora of State-owned companies employing thousands of loyal chavistas and meant to produce from fertilizers to armored vehicles; a controlled economy where inflation was somehow an advantage for those benefiting of State-sponsored loans for buying cars and apartments or State-subsidized dollars to travel or import. 

Today, the Comandante’s ghost would be disappointed while looking at Christmases past. But Maduro could argue that more than 50 countries didn’t recognize him as president in January and February, and he’s still there. Or that he wasn’t ousted in what economists are calling the worst economic collapse in modern history. But this was more than a year in which Maduro survived pulling an impossible win from his enemies. 

What happened during the last three years, but especially in 2019, transformed the country deeply. 

Resizing to survive

The first aspect of this transformation is the new shape of the State and of the country as a nation-state. The Maduro regime took advantage of the economic collapse it caused to become a lighter, more adaptive structure that concentrates its currently meager funds in one goal only: staying in power, and nothing less. No more socialist utopias, no more international activism, no more big ideas; for the men and women who are still within the ruling elite, the Bolivarian revolution is just about remaining in safe grounds in a world full of dangers for the sanctioned traveler and extracting resources to make something out of the isolation.

Since the nationwide blackout of March, it has kept what remains of the national power grid on a rationing scheme that protects Caracas, Eastern Venezuela, and Guayana, where the main economic interests of the regime, oil and gold, are being exploited. Meanwhile, the West and the Llanos are kept in the dark for many hours every day. This has led to the disappearance of the State authority －and therefore, personnel and resources－ from most of the country. 

Instead of the mastodonic, ever-present State of the Chavez years, people in the Andes, Lara, or Zulia have to deal with scattered cells of power, which can be civilian, military, paramilitary, or criminal, depending on the specifics of the place; there’s no money or political will to sustain the State where it’s not really worthy. One telling episode of this use of the fait accompli of an unraveling country was the Zulia imposed governor letting looters sack everything, during the March blackout.

For the regime, the city could burn and its population could starve, as long as chavista interests remain untouched.

You can see the same pattern abroad: in those countries where the governments don’t recognize Maduro as President, the Venezuelan consulates and embassies are empty because diplomatic ties are cut, or personnel remains in place without pay, so Caracas is no longer forced to allocate scarce dollars in keeping those legations working. 

The shrinking of the chavista state is one of the main reasons behind this kind of economic liberalization we have seen in the last months of the year. It’s not that Maduro suddenly discovered the lure of the market economy, but that he’s simply unable to enforce the control measures of his Marxist education. Chavismo was able to turn a bug into a feature －for their own purposes, of course. A shift from the all-controlling revolutionary Leviathan to an absent state that sees mass migration as favorable (less protestors and less Clap boxes), and the resignation of droves of oil workers as a blessing.

Venezuela has a new currency, and it’s not the petro

This takes us to the second most distinctive feature of the deep change the country is going through: the increasingly extensive use of the US dollar, in what some economists call transactional dollarization. 

For years, Venezuelan economy had a sick interdependence with the fluctuation of the black market dollar rate, but now, especially after the March blackout, US dollars in cash or digitally transferred have taken over all kinds of transactions throughout the country. The bolívar soberano is still the official currency but it’s almost exclusively used in online banking, and the lack of cash and its declining value are leading it to a point where it will cease to exist. This year, the Venezuelan currency reached the point where its value was one trillion times less than when it started to devalue against the US dollar in February 1983, as Ricardo Haussman noted. How can the bolívar recover from this? How can we think that the dollar will not end up as our legal currency, as it happened in Ecuador and Panama?     

A paradox wearing fatigues

Venezuelan social media (especially in the diaspora), is riddled with frustrated people blaming the opposition and Juan Guaidó for having failed in toppling Maduro. But the fact is that the military once again faced a crossroad where it decided to stay supporting chavismo, as it did during the attempted coup of April 2002, the PDVSA strike of December 2002, and the 2018 fraudulent elections. Chavismo is still there most of all because it has been able to keep the Army on its side for 20 years. We all saw how, on April 30th, not even the defection of the head of Sebin was enough to spark a rebellion. During the rest of the year Sebin and DGCIM, with Cuban assistance, have unrooted all sprouting conspiracies.

2019 unveiled a paradox, however: the military support is critical for the dictatorship, yet the armed forces are losing relevance as a source of control and violence—even with the support of Cuban intelligence and Russian consultants and equipment. In fact, it is FAES and paramilitary colectivos who keep the population at bay. The brute force these entities have unleashed over our people －through  abundantly documented and denounced torture, kidnapping, rape, and murder－ has ensured there are no more significant demonstrations against the regime. The borders and the mines are now under the control of a patchwork of armed actors where it’s difficult to discern where the territory is controlled by the Army or the State, and where it’s a FARC cell, an ELN front, a Puerto Ordaz-based gang, or an unstable combination of all. 

Again, this is not the Venezuela that Army Lieutenant-Colonel Chávez wanted (although it’s the one he engendered). Instead of a strong military that orderly governs the country, the Venezuelan armed forces cannot avoid mass desertions and losing control of the territory. From now on, we can wonder what would happen if suddenly the high command decides to abandon Maduro.

With a military so weakened among irregular armed actors and foreign presence, turning it against him may not be enough to topple the regime.

The international arena

By the end of 2019, we can say that everybody has changed their approach to the crisis without saying so. Chavismo’s AA approach, “today I won’t be deposed,” changed to what is starting to look like a longer-term strategy. Russia is not just looking more comfortable with their Venezuelan interests, but, in fact, they have become more aggressive in expanding them. The Lima Group, whose future is compromised, turned its attention to the management of the Venezuelan migrant influx, and away from the restoration of Venezuelan democracy. And the U.S. seems to have changed its stance too, given that OFAC sanctions remain ineffective for regime change. 

Although the White House did make some louder movements like firing Ambassador John Bolton (along with his more gung-ho approach) from the Venezuela crisis team, it was too making a quiet shift in strategy, now evidenced by talks held by individuals close to Trump with the chavista regime. If Erick Prince’s meetings with Delcy Rodríguez were a simple hint of this change in strategy, Rudy Giuliani’s approach through the bolichicosphere and later confirmed telephone call with Maduro should leave no doubt about it. After all, with US private companies’ interests on the line (Chevron et al), a scenario in which Trump closes this chapter by saying they “made a great deal” looks more likely than declaring another Vietnam War in the tropics. 

Let’s not forget how irrelevant can Venezuela be to a man like Trump, who has no personal interest in the country and many more issues to absorb his narrow attention span. Lest not speak of how the American President has behaved in the international arena when it comes to Maduro allies as Vladimir Putin and Recep Tayyip Erdogan. 

The Guaidó problem

On January 23rd, 2020, Juan Guaidó will be remembered that a year went by since he took oath as caretaker president. Will he still be recognized as such? On January 5th he’s supposed to be re-elected as Speaker of the National Assembly －the condition needed to be considered the caretaker president to the eyes of those who still see Maduro as illegitimate－ but the Parliament is falling under the centrifuge of opposition politics and the efforts by chavismo of taking it over, as we have been registering in our Political Risk Report. 

So young Guaidó cannot count on retaining the role that made him internationally famous in 2019. If he does, he will still face the fact that he leads a shattering opposition, decimated by jail and exile, unable to replace the dictatorship and to solve any of the overwhelming hardships most Venezuelans are suffering under the complex humanitarian emergency. 

The eclosion of the bubble of hope around Guaidó left a landscape of cynicism and despise for all politicians: in the third quarter of the year, polls started to show more people disapproving Guaidó than supporting him (although he was still more popular than anyone in chavismo or the opposition). This is a problem for the caretaker president and his domestic allies, but also for all those governments who bet on him. What will the US, Colombia, Canada, and so many other countries do about the fact that Maduro remains in power in 2020, in terms of their relationship with Guaidó and Venezuela? Will they just slip away, turning down the volume and frequency of their declarations and actions regarding our country? 

What each country that recognized Guaidó will do will depend not only on Guaidó’s situation, but also on the respective impact of Venezuelan migration (a main issue for Colombia, Peru, Ecuador, Trinidad and Tobago) or their stance on Cuba and Russia (which is, for instance, very different between Canada and the U.S.). Anyhow, they will show in 2020 how important Venezuela is for them. The current course of cohabitation with the dictatorship is a bad score for the governments which demanded its end or even insinuated an armed intervention, but also for those like Mexico and Norway, which supported negotiations that delivered nothing, once again because chavismo did not have reasons for taking them seriously. Even the Chinese could be worried about the chances of recovering their investments in Venezuela.

Only two regimes, besides Maduro’s, are clear winners of the Venezuelan 2019. One is Cuba, forced to protect Maduro once Trump smashed the approachment with the U.S. started by the Obama administration. The other is the Eurasian power that is now enjoying the opportunity of establishing a strategic beachhead way beyond its hinterland: Russia.

The African-Russian model

Russia’s Rosneft has been assuming not only transport of sanctioned Venezuelan oil but also field operations, while the Russian military openly shows its presence in the country —at least as equipment provider and consultant. Moscow is more interested and more suited than Beijing to help Maduro and reap a benefit: the Russians know better how to deal with international sanctions and how to build power around an extractivist economy. It’s no coincidence that today’s Venezuela did not follow the path to become Cuba (zero political freedom, total control of the territory and the State, a relatively austere elite) or China (zero political freedom, massive infrastructure development, an astonishing economic buoyancy thanks to liberalization). Today’s Venezuela looks very much like Putin’s Russia: a country very criticized for its quality of life and human rights indicators, with more enemies than friends, where actually exists an opposition, though unable to threaten the stability of a deeply corrupt alliance of cronies.

Russians are not only modeling Venezuela. They are also taking advantage of the dismantling of the country as a nation-state, where the criminal and legal economies help fund the lavish lifestyle of the elite in Caracas, Lecheria, or Margarita. An equation we can see in the Gulf of Guinea: millions of people suffer violence and extreme poverty around the brilliant towers of the rich in Lagos, Abidjan, or Kinshasa. 

Life finds a way

Many of us thought that 2019 would bring change, that it would be Year 1 of the Venezuelan Renaissance. Although we were wrong about the possibility of rebuilding democracy, 2019 did bring change—even when it wasn’t the change we wanted.

For common folk in Venezuela things went from learning to live with the pran to learning to live without the pran—in case you’re new here, pranes in Venezuela hold the highest rank in a prison gang. The absence of the state is felt across the board: it’s felt by people in Maracaibo who spend many days in a row without power and running water, and it is felt by the businessman in Caracas who decides to invest in a restaurant or bodegón and makes a significant profit in dollars. These contrasting situations depend on the same variable, they require a complete disregard of public duties and laws by the authorities.

Actually, 2019 was a very important year, one that will be remembered. It was the year when many Venezuelans turned the page. When they realized their lives don’t depend on a higher power: there’s no government coming to put food in your mouth and there’s no one coming to help.

The options have been reduced to leaving or trying to do the best out of a situation you cannot change. 

By accepting the new terms of this reality, we may be able to think how this country can be turned into a functioning place where you can flip a switch and turn on the lights, have running water, feed your children, and have a government that is more than a FAES executioner with a death mask.

Is it positive that people stopped thinking about solving the bigger problem and are  focusing on their well-being? Hard to say. But what we know is that it is inevitable. The desire to live is something more powerful than ideologies and dogmas. Simply put, in the words mumbled by Jeff Goldblum in Jurassic Park: “Life, uh, finds a way.”