With the Venezuelan economy predicted to shrink 10% this year and an anticipated inflation rate of 700%, the government of President Nicolas Maduro has been ruling by executive decree.
The country is currently mired in a food crisis of unprecedented proportions. Severe shortages of basics like milk, eggs, and flour have driven tens of thousands of citizens across the border into Colombia searching for food. At the sight of shelves full of food, they weep.
The crisis goes beyond food shortages. CNN Money reports:
Venezuela is deep into a humanitarian crisis — people are dying in ill-equipped hospitals and many live without basic food items. Venezuela can’t pay to import goods because its government is desperately strapped for cash after years of mismanagement of its funds, heavy spending on poorly-run government programs, and lack of investment on its oil fields.
International humanitarian organizations have been mostly blocked from assisting because Maduro doesn’t trust them. Instead, Maduro issued a decree recently ordering citizens to leave their jobs in the private sector to be put to work in the fields:
“Trying to tackle Venezuela’s severe food shortages by forcing people to work the fields is like trying to fix a broken leg with a band aid,” Erika Guevara Rosas, Americas’ Director at Amnesty International, said in a statement.
President Nicolas Maduro is using his executive powers to declare a state of economic emergency. By using a decree, he can legally circumvent Venezuela’s opposition-led National Assembly — the Congress — which is staunchly against all of Maduro’s actions.
According to the decree from July 22, workers would still be paid their normal salary by the government and they can’t be fired from their actual job.
It is a potent sign of tough conditions in Venezuela, which is grappling with the lack of basic food items like milk, eggs and bread. People wait hours in lines outsides supermarkets to buy groceries and often only see empty shelves.
Venezuela once had a robust agricultural sector. But under its socialist regime, which began with Hugo Chavez in 1999, the oil-rich country started importing more food and invested less in agriculture. Nearly all of Venezuela’s revenue from exports comes from oil.
With oil prices down to about $41 a barrel from over $100 about two years ago, Venezuela has quickly run out of cash and can’t pay for its imports of food, toilet paper and other necessities. Neglected farms are now being asked to pick up the slack.
Maduro’s actions are very similar to a strategy the communist Cuban government used in the 1960s when it sought to recover sugar production after it declined sharply following the U.S. embargo on Cuban goods. It forced Cubans to work on sugar farms to cultivate the island’s key commodity.
Such slave labor is common in Communist countries. Stalin, Mao, the Khmer Rouge — all created forced labor camps to try and boost agriculture because of socialism’s failures. (The Khmer Rouge also sought to create a rural utopia as they emptied the cities, killing more than a million of their own citizens in the process.)
The decree may be a signal that the military is gaining increasing power:
This latest action by Maduro may also be a sign that at least one other leader may be calling the shots on this issue. Earlier in July, Maduro appointed one of the country’s defense ministers, Vladimir Padrino, as the leader of a team that would control the country’s food supply and distribution.
It’s powerful role, especially at a time of such scarcity in Venezuela.
“The power handed to Padrino in this program is extraordinary, in our view, and may signal that President Maduro is trying to increase support from the military amid a deepening social and economic crisis,” Sebastian Rondeau, an economist at Bank of America, wrote in a research note.
Maduro is almost certainly going to need a loyal military if he expects to stay in power. To that end, you can imagine the soldiers being first in line to receive the limited food resources available in the country.
But even the military has its limits as far as backing Maduro’s play. Every time you think it can’t get worse for the people of Venezuela, it does. There may come a point that to avoid total collapse, the military would reluctantly move in and oust Maduro.
What they can do that Maduro isn’t doing can’t be readily seen.