“We seek the union of Venezuela” – Anti-government protests in Altamira Square, Caracas
Venezuelan President Nicolás Maduro and his political opposition agree on practically nothing. One exception stands out: they both recognize their economy is in freefall.
Given that the IMF forecasts inflation will top 700 percent and the economy will contract seven percent over the coming year, the question is not whether the Venezuelan economy is tanking, but if it will be possible to stop the current crisis from devolving into a state of emergency.
A recent report by Agence France-Presse spells out the conventional wisdom on why the South American nation finds itself edging towards the brink: “An economic crisis sparked by the falling oil price has led to a political crisis in Venezuela.”
Indeed, Venezuela’s economy — which makes 95 percent of its export earnings off of crude — has been devastated by the global price drop. But the standard narrative gets the direction of causation wrong. The country’s extreme political polarization is not the result of its plunging economy as the economy’s freefall is a consequence of polarization — and the accompanying political gridlock that makes compromise on measures to fix the economy impossible.
While plummeting oil prices might have catalyzed Venezuela’s economic collapse, political polarization predates low prices. In early 2014, when a barrel of oil cost over three times what its worth now, tension between Maduro’s supporters and the opposition erupted into violent clashes across the capital of Caracas. Since then, ever-worsening polarization has repeatedly made it impossible to devise remedies for the country’s economic woes.
So while dire economic straits certainly exacerbate political tension, it’s highly unlikely the economy would be on the point of collapse if Venezuela’s political divide hadn’t widened into a seemingly unbridgeable gulf.
Worse yet, now that the government is split between an opposition-led parliament and Maduro’s administration is in control of the executive, the widening gulf between Maduro’s leftist supporters and the center and center-right opposition threatens to make current gridlock permanent. While chronic shortages and the looming prospect of a debt default dominate headlines, the most pressing problem Venezuela confronts is not economic. It’s political. And unless opposition leaders and Maduro’s Chavista supporters find a way to mend the country’s ever widening political divide, economic crisis will become a constant state — in large part as a result of politics.
International observers and Venezuelan leaders alike have agitated for a host of contrasting proposals to fix the country’s economic problems. Financial experts advocate devaluing the Bolívar to curb inflation and cut back on Caracas’ infamous queues for basic goods. Maduro’s government has called for greater control over the national budget and private sector in an emergency decree it recently tried and failed to pass. Meanwhile, many opposition leaders — who now hold a majority in parliament following a landslide victory in January — pledge that they will work towards a recall referendum to remove Maduro from power if that’s what it takes to cut spending, avoid a default, and dodge an even worse economic crisis.
Often, however, all sides have devoted more energy to defending specific measures that align with their respective ideologies than confronting the big-picture problem; if political stalemate is the status quo, no plans for reform – however enlightened – will be translated into law and implemented.
As Maduro’s supporters accuse the opposition of sabotaging Venezuelan sovereignty and key opposition figures make Maduro’s ouster their primary goal, only a few national figures are focusing on overcoming an increasingly poisonous style of politics. Chief among them is Henrí Falcon, governor of Lara state and a Chavista turned moderate opposition leader.
Falcon has taken flak for putting dialogue ahead of diatribe, but his audacious attempts to mend the political gap offer hope that turning back the tide of polarization isn’t a lost cause — at least not yet.
Falcon breaks the mold of Venezuelan politics. While he has vocally criticized Maduro’s mismanagement of the economy and failed development projects the government has launched in his state, he recently broke with the majority of the opposition leaders to join Maduro’s working group on economic policy.
As a result of walking the middle ground, both the opposition and ex-president Hugo Chávez have labeled him a “traitor.” However, his tendency to work with both sides has also prompted Maduro to call him a “peacemaker” and “exception,” and has allowed him to rank as the opposition leader considered most trustworthy according to nation-wide polls.
Falcon’s tendency to work with both government and opposition supporters provides a model other leaders must follow if they want to mend the country’s economic ills — and Falcon knows it.
While the typical news blurb chalks up Venezuela’s political brawls to its plunging economy, Falcon took to Twitter last week to set the record straight. “We must restrain ourselves from ideological confrontation in order to take on ordering the economy,” he wrote.
Rather than peddling particular economic measures, Falcon proposes Venezuela’s underlying problem — political polarization — will be resolved only when “understanding” and “dialogue” replace “fights” and confrontation.”
Taken at face value, his prescription can appear to be an overly simplistic response to the complex set of interrelated economic dilemmas Venezuela currently faces. Moreover, ending political polarization is much easier said than done. However, until a greater number of government and opposition leaders converge towards consensus — if not on specific economic policies, or at least on recognizing each other as legitimate, democratic opponents — Venezuela’s political dilemma will continue to make its economic one impossible to solve.
“Political differences have something in common: the economic crisis affects us all equally,” Falcon writes. Only when Venezuela begins to overcome its political differences will an end to its economic crisis become possible.
Will Freeman is a senior at Tufts University, majoring in Political Science. He has previously worked for ThinkProgress and the Uruguayan El Observador.
Image Attribution: “Venezuela Protests Against the Nicolas Maduro Government” by The Photographer, licensed under Public Domain