Venezuela's Path to Dictatorship (and Economic Collapse)

While the United States grapples with a solution for the military transition next year in Afghanistan, reaching a deal with Iran on their nuclear program, and (still!) managing the fallout from NSA revelations with international implications, Venezuela seems to have gone under the radar or perhaps has simply not been deemed a high enough priority these days. Should it be though? Venezuela is certainly no friend of America’s, and hasn’t been for years – former President Hugo Chavez, who died this past March, was constantly and publicly cold towards the United States.

Nicolas Maduro

However, Venezuela is worth keeping an eye on more than ever today, due to the outspoken aggressor that is President Nicolas Maduro and the state of his economy. It was reported today that the Venezuelan assembly narrowly passed a measure giving Maduro what are known as “decree powers” – that is, enabling Maduro to unilaterally create laws without the oversight of any legislative body. Talk about frightening: the man who has publicly referred to his opponents as “capitalist parasites” and frequently mentions his plan to fight and win the “economic war” now has the unchecked power to do so.

This drastic measure is in response to an existing – and already severe – problem. Venezuela has been experiencing historic inflation lately, at an annual rate of 54%. Along with one of the highest inflation rates in the world, Venezuela has severe shortages of many necessary items, such as toilet paper, and essential cooking supplies such as sugar, oil and milk. Economically speaking, the country is dangerously close to a freefall, where perhaps not even the shock therapies that have been implemented in countries such as Bolivia in the 1980s or Eastern Europe after the Cold War will be enough to mitigate the damage.

Soldiers outside a Daka store

Maduro, however, is not the answer, and nor are his policies. Recently, the Maduro government took over a chain of electronicstores, demanding the stores to sell their products at egregiously low bargain prices. Maduro claimed that these “capitalists” had excessive profit margins too high, and that clearing out their inventory by selling at discounted prices would stimulate the economy. This was before Maduro had been granted “decree power” – imagine what laws he may implement now that he has that power.

Besides the economic impact this could have on the international market, these conditions, sustained in a country long enough, that breed disillusionment among citizens and ultimately, spawn terrorist cells. South America knows all too well the perils of having a dictator-like government and a barely functioning economy: the 1970s and 1980s historically were filled with various terrorist organizations from Bolivia to Peru to Colombia (and even Venezuela) that resulted in millions dead and violent government changes. Today, with more global connectivity than ever before, the threat of terrorist influence in Venezuela should be taken very seriously by the United States. Nicolas Maduro has “decree power” for one year – it will continue to be important to observe the repercussions from the sidelines as he inevitably spins Venezuela’s economy further out of control.