In a contentious and highly irregular election on Sunday, Venezuela voted for the creation of a new constituent assembly, which would give President Nicolás Maduro increasing control of a divided and chaotic country. Since the vote, Maduro’s government has continued to arrest representatives of the country’s beaten-down opposition, and the Trump administration is placing new sanctions on Maduro. The Venezuelan president and successor to Hugo Chávez, who died in 2013, is presiding over horrific shortages of food and medicine, as well as increasing chaos and violence.
To discuss the recent events in Venezuela, I spoke by phone with Terry Lynn Karl, a professor emeritus of political science and Latin American studies at Stanford University and the author of The Paradox of Plenty: Oil Blooms and Petro-States. During the course of our conversation, which has been edited and condensed for clarity, we discussed how Maduro differs from Chávez, what the United States should and shouldn’t do to resolve the crisis, and why oil is a curse.
Isaac Chotiner: How would you describe what we are witnessing in Venezuela?
Terry Lynn Karl: I think what’s incredible is that we’re witnessing the collapse of a large, modern, wealthy country that has both a democratic and an authoritarian tradition. It’s only a few hours from the United States, and it has the world’s largest supply of crude oil. Venezuela is a powder keg, and the worst-case scenario is now civil war.
I think that scenario would create a refugee crisis. It could spread instability. It would spread even more criminality into Central America and the Caribbean than is already there, so this is a really big crisis, and it’s a crisis that nobody seems to be paying very much attention to.
What do you view as the main cause of this? Do you trace it to Chávez’s policies or Maduro’s?
I think it is rooted in the collapse of the two-party system and the democracy. There’s sort of a simple answer of how they got here, which is the collapse of oil prices, their overdependence on oil, the overspending of the Chávez government and now the Maduro government, the fact that there’s a government with no checks and balances, with its ultra-presidentialism relying on emergency decree, that quashes dissent and has massive corruption.
The problem with everything I just listed is that all of that existed in the democracy as well. All of it. The collapse of the party system is what led to Chávez. The party system collapsed, in my view, because it didn’t do anything for the poor. The slogan at that time was, “Where’s the oil money?” There’s all this money pouring in, and where is it? That’s what led to Chávez.
So, what Chávez did is the same thing the party system did, which is he depended overly on oil revenues, which account for over 96 percent of their exports. That’s how they get their foreign exchange. He raided the oil by starting to spend money on the poor with everything from 2 cent gasoline to free housing and medical care and the building of clinics.
All these things were, I believe, having lived in Venezuela for a very long time, very necessary and very admirable, but you can’t spend money you don’t have. The myth in Venezuela is that there’s enough oil revenues there to support whatever government is in power and whatever that government wants to do. That was the myth under the democracy, and it was the myth under Chávez, and it’s still the myth today.
So it seems like you are saying they would be undergoing varieties of crisis because of the reliance on oil, regardless of the characteristics of the regime.
Exactly. It tore apart the democracy that was a two-party system, which was a very flawed democracy. It is going to tear apart this government. It tore apart the military government in 1958. This is not just a Venezuelan problem. This is going to be Iraq’s problem as well, or it is an Iraq problem, or [the problem of] any oil exporter that only lives on oil. You cannot depend and run an economy on a single commodity that is extremely volatile.
Can you talk specifically about how it contributed to the collapse of the two-party system?
This is why Chávez is considered a huge hero to so many Venezuelans. The party system got very sclerotic, corrupt. It was spending money it didn’t have. It did all the things that we see now, except there was a solution, which was Chávez. What the party system did is it acted as if there was enough money for everybody, and then when Carlos Andrés Pérez got into power again for his second time—this was at the end of the ’80s—he had promised that he would give money to the poor. Instead he instantly did an about-face and installed a neo-liberal austerity program that raised the price of petroleum. He did it very abruptly, and so in 1989 there was a huge social explosion, much bigger killings than what we see today, by the way, and it’s called the Caracazo. State security forces of the party system then killed hundreds of protesters, and many people believe the number was in the thousands.
For Venezuelans who remember ’89, the party system was the enemy, and Chávez was the hero, because things got better under him first of all. The price of oil went up. He started opening free clinics, and primary education, and universal health care, and subsidized food, et cetera, et cetera, et cetera, but he acted as if there was enough money to sustain all this.
When you distribute money that you don’t have, you only have two solutions. You borrow—that’s what the United States does—or you print money. That’s also what the United States does. The problem with printing Venezuelan bolívares is nobody wants them. It’s one thing if you print dollars. It’s a whole other thing if you print bolívares, right? Nobody wants them. So, when they do that, they cause inflation, and right now inflation is predicted to be 720 percent.
How much of a clear line is there between Chávez and Maduro, especially in terms of attitudes toward opposition and a free press?
I think there’s a clear line, but there’s two really important differences. One is Chávez never did anything without an election that could be verified, so he kept winning elections, and when he would change something like the constitution, which he changed, there was a huge mandate to do that.
Today Maduro is not using free and fair elections in the same way that Chávez did. The crisis is much deeper, and the bottom line is that Chávez supporters still love Chávez. He died just in time, if I can put it that way. They still love him. He was a very powerful, charismatic, authoritarian leader, and they really were responsive to him. That is not the case with Maduro.
I don’t think Maduro is anything like the leader that Chávez was. I think the thing that was hard to understand about Chávez for Americans in this country is that Chávez was poor himself. He was dark-skinned. Venezuelans identified with him, not just in his notions of a rich country like this should not have so many poor people, but also in what he looked like and how he talked. He had a little bit, not quite, but he had some of the Fidel Castro touch, if I can put it that way. Maduro doesn’t have any of that, and when an authoritarian leader has that, he can rely on elections because he is likely to win, he or she, but Maduro doesn’t have any of that.
The solution of the American government at the moment seems to be slapping Maduro with sanctions. I’m wondering what you think the way out of this crisis is, if there is an alternative to the civil war that earlier you said you were afraid could come.
Well, I think the main thing is to do no harm, because the last thing anybody should want to do is to push Venezuela into a civil war. I want to say that that’s a possibility, because a) everybody has a gun in Venezuela, and b) there are two completely different narratives.
There’s a story that the Maduro people say, which is, “The reason we have an economic crisis is the wealthy in this country and the United States are waging economic war against us, and anything else is fake news.” Then there’s the opposition, which is divided. There are people who want to return to the party system, and they want austerity, and they want an unfettered market economy, which is never going to happen in Venezuela in my view, and they also, many of those people, favor a more violent confrontation with the government, no negotiations, et cetera. Then there’s an opposition called Primero Justicia, which has been insisting on a constitutional path, an institutional path to a better solution. The problem is that the first opposition has many more ties to the United States and portrays this as a socialism versus capitalism story.
In that context, what do you do? Well, I think the first thing you do is nothing unilaterally. The United States should not be unilateral because it plays right into the notion that we’re trying to overthrow this government. There’s a long history and tradition in Venezuela of U.S. involvement, and people believe that’s what’s happening even if it’s not.
The second thing is we really should do an arms embargo. Brazil has just suspended sales of tear gas to Venezuela, and I think we should suspend all weapons to Venezuela, because we don’t want any more weapons floating around there.
What role would taking action around oil play?
Talk of oil sanctions is extremely dangerous because it could actually plunge Venezuela into a much greater humanitarian crisis than it is in now. There’s no food. There’s no medicine. There’s no toilet paper. There’s no toothpaste. There’s nothing.
People are in line all the time, and there’s a huge black market that is benefiting the wealthier people, so you don’t want to create more of that, because that’s just going to be devastating, and it’s going to continue the economic freefall.
There are a lot of calculations here that are very, very tricky. The last one I would say is that Venezuela is very likely to have to default on its loans, and everybody with a memory remembers what happened when we had the Mexico crisis. We don’t like countries ... when I say “we,” I mean the international system, doesn’t like countries defaulting on loans. It’s a very dangerous thing because it can become contagious. If Venezuela does it, maybe Algeria and Angola, two oil countries in terrible straits right now, do it too.