Publish in Perspectives - Wednesday, February 19, 2014
Presidents Nicolas Maduro and Raul Castro in Cuba in January. (Photo: Marcelo Garcia/ Prensa Presidencial)
The days of the Caribbean Anschluss of Venezuela and Cuba are numbered.
BY BEATRICE E. RANGEL
Raul Castro must have regretted his
persistent demand to have Nicolas Maduro
succeed President Chavez. The man who survived the collapse of the Soviet Union
and managed to avert a domestic rebellion triggered by food scarcity and
inflation anointed a leader to rule Venezuela who has excelled at these trades.
And as Venezuela turns slowly but surely against a Head of State that was not truly elected and who seems to have lost touch with reality many moons ago, Raul Castro must feel like Colonel Aureliano Buendia felt when facing death. "He saw the clowns doing cartwheels at the end of the parade and once more he saw the face of his miserable solitude when everything had passed by and there was nothing but the bright expanse of the street and the air full of flying ants with a few onlookers peering into the precipices of uncertainty."
But if economic mismanagement was the cause of the fall of Nicolas Maduro, political autism explains Raul Castro's choice. Indeed, for half a century the Castro brothers have reigned over a country that lost to exile its middle class; that exhausted all avenues for value creation and that enjoyed the impunity that geopolitical parity confers to some territories. Under such conditions the Cuban leaders could hardly perceive the startling differences between Cuba and Venezuela when President Chavez opened the way to a Caribbean Anschluss between the two countries.
Venezuela, in contrast with Cuba, had experienced -- albeit its multiple imperfection -- democratic rule for over 40 years. Venezuela had been creating a middle class that at the moment of President Chavez’ election in 1998 accounted for 20 percent of the population, down from its peak in the 1980s of 25 percent. From the economic viewpoint, oil exploitation had fostered the development of the service and the real estate sectors. Decentralization had created power nuclei around the country that were not as strong as the federal government, but injected into the population a sense of belonging to diverse and competitive regions.
This country profile differed widely from that of Cuba in the 1950s when the Castro brothers seized power. Public policy approaches therefore needed to be different. Cold blooded, brutal power-seizure techniques were not easy to impose in Venezuela at the turn of the century. President Chavez managed to secure the Anschluss on account of his great charisma and capacity to transfigure himself to blend with every individual. He also devised a set of public policies that aimed at hooking people to his regime through consumption. Aggregate demand was boosted across the income strata. For the rich: the bonds issuance that also served the purpose of facilitating deals with 'friendly colleagues" like the Kirchners; Evo Morales; Daniel Ortega and Rafael Correa. For the poor: handouts through the so called social missions. To the military: extra payments through PDVSA and to his associates: zillions of dollars in corruption and graft. But as President Chavez passed away victim to cancer and the world energy system took a turn for the worse given that high oil prices fostered the development of new hydrocarbon reservoirs such as tar sands, the days of the Anschluss were marked. Also the slowing down of growth rates in BRIC countries reduced demand for commodities which in turn reduced energy consumption.
Venezuela discovered then that it had $2 billion in reserves while its outstanding debt is $80 billion. As liquidity dwindled away and President Chavez died, Nicolas Maduro and Raul Castro found themselves trapped in a suffocated system. As lines grew in size and waiting time both saw their fortunes take a dip into the valley of despair. Add to the mix the fact that Venezuelans resent and blame the Cubans for all their misfortunes and you will understand why Mr. Castro today shares time and space with Colonel Buendia.
Beatrice Rangel is CEO of AMLA Consulting Group, a business development advisory firm in Miami. She wrote this column for Latinvex.
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