Two disturbing stories came out of Venezuela this weekend. The first involves the Miami Herald’s Andean bureau chief, who was detained for 48 hours after he asked for an interview with military officials in the city of San Cristobal. The Venezuelan government says that he didn’t have permission to report in the country. Repressive governments often use this kind of flimsy pretext when they don’t like the questions you’re asking -- but outside of violent dictatorships, I believe the customary practice is to take you to the airport and watch you get on a plane back home, not to arrest you.
The second is even more extraordinary -- so much so that I’m not even going to summarize it.
Thousands of Venezuelans lined up outside the country's equivalent of Best Buy, a chain of electronics stores known as Daka, hoping for a bargain after the socialist government forced the company to charge customers "fair" prices.
President Nicolas Maduro ordered a military "occupation" of the company's five stores as he continues the government's crackdown on an "economic war" it says is being waged against the country, with the help of Washington.
Members of Venezuela's National Guard, some of whom carried assault rifles, kept order at the stores as bargain hunters rushed to get inside….
Daka's store managers, according to Maduro, have been arrested and are being held by the country's security services. Neither Daka nor the government responded to requests for comment.
These stories are more connected than they might at first appear. The detained reporter was looking into upcoming municipal elections and the chronic shortages of basic goods that have plagued Venezuela. And the “military occupation” of an electronics retailer comes ahead of those elections, in which Maduro’s party is not expected to do well.
The roots of both of these issues go back to Chavismo, the left-wing ideology of former president Hugo Chavez, who used Venezuela's oil revenues to support huge social spending. Unfortunately, Venezuela’s heavy, sulfurous crude requires a lot of continual investment to keep it coming out of the ground, and much of that investment has been diverted. Since Chavez took office, Venezuela has been pumping less and less of the stuff:
This was basically OK as long as oil prices were rising. But in 2009, they fell precipitously, and they have yet to recover. For the last few years, they’ve been basically flat.
As a result, gross domestic product per capita is also basically flat; whatever the other benefits, the social welfare spending has not translated into an economy that can withstand stagnation in the oil sector:
As oil prices fell, the government inevitably ran into political trouble, which it has tried to manage with ill-considered economic interventions such as price controls. Shortages of basic household goods are common, and currency restrictions have sent the price of airline tickets soaring as Venezuelans resort to vacations as a way to get a hold of scarce foreign currency.
These restrictions tend to fall apart, creating the need for even more extreme measures. That is what we are now seeing. Politics and economics are never separable, but they are particularly entwined in Venezuela. And as the economics get worse, so does the government.