International Trade

Old Nick and the Bolivarian Revolution

“Flee the country where a lone man holds all power: it is a nation of slaves.” – Simon Bolivar, founder of the Venezuelan Republic

The Bolivarian Revolution of Hugo Chavez and his successor Nicolas Maduro has come full circle.

In Venezuela, 125 protesters have died since April. Hundreds of people are political prisoners of the Venezuelan government. Inflation has skyrocketed – at the time of this writing, one U.S. dollar is equivalent to 14,158 bolivars. Three-quarters of Venezuelans are losing weight. This is partially due to low oil prices (oil accounts for 95 percent of Venezuelan exports) and partially due to government corruption and mismanagement of the economy. Serving to illustrate the extreme hardships brought about by the current regime, the Venezuelan government has introduced a “Rabbit Plan” encouraging citizens to breed and eat rabbits to avoid starvation.

Almost as if he sought to compound these already monumental challenges, Venezuela’s President Nicolas Maduro recently became the world’s newest dictator after revising Venezuela’s constitution and replacing its opposition-heavy Congress in a sham election. Since that election (in which some 15 percent of Venezuelans participated after an opposition boycott), he has arrested opposition leaders in midnight raids, cracked down on protesters and fended off an attack on a military compound by dissidents (though it is believed the dissidents escaped with weapons). While protests have now mostly subsided due to government crackdowns, some members of the military have defected, raising the specter of civil war.

Venezuela was a functioning democracy for decades. In 1998, Venezuelans elected a man who promised a “Bolivarian Revolution” that would bring socialist equality to Venezuela – Hugo Chavez. Only six years earlier, Chavez had led a failed coup against the government. Tapping into Venezuela’s vast oil reserves, Chavez spent profligately to implement his socialist system. He antagonized the United States while praising Fidel Castro, Muammar Gadhafi and Bashar al-Assad. More than a whiff of voter fraud attended his elections, sometimes amid protests, but he remained incredibly popular. He died in 2013 and was replaced by his handpicked, far less eloquent successor, Nicolas Maduro.

Maduro’s ascension coincided with falling oil prices and recession. As the veneer wore off the Bolivarian Revolution, Maduro began eliminating checks and balances. He cracked down on protesters and briefly suspended the Venezuelan Congress. Finally, he rewrote the Venezuelan Constitution and replaced Congress with a handpicked “constituent assembly”, revealing the Bolivarian Revolution for what it was – a power grab.

The U.S. Treasury Department has imposed sanctions on Maduro and several other members of his government, and President Trump has declined to speak with the dictator until democracy has been restored in Venezuela. The President said of Venezuela’s ongoing crisis and descent into dictatorship, “We have many options for Venezuela, including a possible military option, if necessary.” Maduro seized on U.S. threats and actions as proof to support his conspiracy theories that the United States is funding the opposition in Venezuela and sabotaging the economy.

Vice President Mike Pence, while speaking in Colombia, said that “a failed state in Venezuela threatens the security and prosperity of our entire hemisphere and the people of the United States of America.” The vice president brings up an important point. The erosion of liberal democracy around the world has major economic implications. The U.S. Chamber of Commerce identified the following rule of law factors necessary to create a climate where business can thrive and that will attract foreign direct investment (FDI) – transparency, predictability, stability, accountability and due process. These features are generally waning or absent in countries where democracy is in retreat, including Venezuela. As can be seen with Venezuela’s increasingly dire economic situation, this negatively affects commerce as well. This observation is not lost on members of ALEC prompting the Task Force on International Relations to adopt a model resolution supporting the establishment of an ALEC Democracy and Governance Program.

Many countries have denounced Venezuela’s slide into dictatorship including other South American countries, the European Union, Canada and others.

Venezuela’s predicament is anything but peculiar. Today, dictators are often former democratically elected leaders that find ways to expand their power past its constitutional limits. Vladimir Putin pioneered this technique in the early 2000s, upending Russia’s democracy to rule (directly or indirectly) the country for the past 20 years. Turkey’s Recep Tayyip Erdogan quietly concentrated power in the office of the president until a failed coup in July 2016, after which he declared a state of emergency, purged political enemies and narrowly passed a constitutional referendum granting himself even more political power.

Now Old Nick Maduro has joined the ranks of former-elected-officials-turned-dictator. As the global phenomenon of democratic backsliding continues, Americans should keep in mind the sacrifices and eternal vigilance required to maintain a democracy. In the words of Benjamin Franklin, we only have a republic “if you can keep it”.


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