Tuesday, August 18, 2015

Venezuela--A Portrait of Collapse

While Tainter's thesis about the collapse of complex societies rests on the immediate causes--costs of increased complexity outstripping the ability to sustain those costs--it would be foolish to dismiss other theories concerning how the increased costs come about. A recurring theme, especially on a national level, is corruption. Leaders siphon off money to their own pockets or the pockets of their cronies; decision as to government expenditures cease to be about the good of the nation or people, but whether the program is one open to graft or solidifying personal power. Socialism is generally just the sugar coating to make it palatable, offering "free" goods and services to a populace in exchange for giving up power to the corrupted government. The problem is that eventually, the corrupted government runs out of other people's money, and then the free goods disappear, the smile fades, and the iron fist of power comes out.

Venezuela's fate is inexorably linked to corruption. Roger F. Noriega, writing for the American Enterprise Institute, states:
Venezuela is a narcostate, controlled by senior political leaders and security officials who have used state resources and state-owned companies in the cocaine trade. ...

... It may be difficult to understand why a government whose officials have access to vast oil revenues would see the need to be involved in smuggling illicit drugs. According to eyewitness sources, beginning in 2005, Chávez personally directed the exchange of vast sums of oil revenue for cocaine with the Colombian Fuerzas Armadas Revolucionarias de Colombia (FARC) guerrillas to sustain their war against the democratically-elected government of President Álvaro Uribe — a bitter foe of Chávez.

Like no Latin American leader before him, Chávez put all of the state’s resources at the disposal of his transnational organized-crime network. In addition to encouraging other governments to refuse to cooperate with US antidrug efforts, he used his diplomatic muscle to brazenly defend his criminal allies. In 2009, for example, he rallied regional governments — including the United States, for a time — to demand that Manuel Zelaya, an alleged drug smuggler, be restored to the presidency in Honduras. He also has sustained governments in Bolivia, El Salvador, and elsewhere that collaborate in the illegal drug trade.

Even before assuming power, Chávez maintained close ties with FARC, the guerrilla group that has turned its focus from a radical armed struggle to narcotrafficking. As Colombia has taken the upper hand in its conflict with the guerrillas in the last decade, FARC’s drug-smuggling operations have been flushed out in the open—as has Venezuela’s complicity in these criminal activities.

A 2009 report of the US Government Accountability Office noted, “According to US officials, Venezuelan government officials have provided material support, primarily to FARC, which has helped to sustain the Colombian insurgency and threaten security gains achieved in Colombia.” Apparently, by the time that assessment was written, Chávez already had integrated FARC into his scheme to smuggle cocaine, benefiting his political survival and agenda.

On March 1, 2008, Colombian forces captured the “smoking gun”: FARC computer records documenting the intimate role of numerous Venezuelan officials in FARC smuggling activities. The US Department of the Treasury used that information to designate several senior government officials as drug kingpins. Venezuelan intelligence officials Hugo Armando Carvajal Barrios and Henry de Jesús Rangel Silva and former Justice and Interior Minister Ramón Emilio Rodríguez Chacín were declared kingpins and were among Chávez’s most trusted confidantes and operatives.
 It is eye opening to review some of what Venezuelans have received in return for choosing a corrupt government:

Due to the currency controls in Venezuela that have hampered imports, along with a fall in the price of oil and raging inflation, food shortages are commonplace across the country. Venezuelans queue through the night to be the first in the supermarkets when they open to grab what they can. Stores are being looted with surges in crime rates further damaging the country, smuggling is rife with smugglers raiding stores and selling goods from Venezuela to bordering Columbia making a profit.
In some hospitals, they had less than a third of the medical supplies they require. Almost every patient told me they had to buy at least some of their drugs on the street.
Oncologists said that people who were diagnosed with breast cancer sometimes had to wait more than 18 months for treatment, while surgeons said that other patients often die while waiting for operations.
It's not just a lack of medicines that is making life difficult. Spiralling inflation, which topped 600 percent in July 2015, has meant that doctors' salaries are now worth less than £10 per month.
The NGO Venezuelan Medical Societies Network estimates that in the last few years approximately 10,000 medical graduates have left the country.

This, again, though, is partly a result of government imposed price controls. For instance, veterinary medicines (which are not subject to price controls) are apparently still available to those willing to pay the steep prices. (Conversely, in the United States which faces different pricing incentives, veterinary medicines often cost much less than their prescription counterparts).

    ... there are at least 10 mega-gangs currently operating in Venezuela, a product of prison culture transferred from jails to poor neighborhoods. Two organizations have become especially popular, and have had numerous confrontations with authorities: El Picure and El Juvenal.
      Cedeño explains that “mega-gangs” are defined by the number [of] men in the group and the firepower they possess. Each mega-gang is comprised of at least 60 members, and are known to carry AK-47 and AR-15 rifles, as well as explosives.
        He says the government’s failure to curb criminal-gang activity reached its peak with the creation of “peace zones,” territories that are off-limits to police, where gang leaders are left to impose their will unabated.
        However, the one "crime" on which the government is seriously cracking down is "hoarding." 
          In Zulia state, 718 security personnel participated in a raid in the municipality of Guajira, uncovering a cache containing 176,000 liters of gasoline, 1,260 liters of vehicle oil, 2,000 cases of beer, as well as nearly 20 tons of essential food items, including two tons of sugar, three tons of rice, and a half ton of cooking oil. Additionally, 10 individuals suspected of hoarding were arrested.
            “These seizures represent a hard blow to the bachaqueo fomented by the economic war in the country,” affirmed Interior Minister Gustavo González López, referring to the associated practices of hoarding, contraband, and speculation by individuals and private businesses that have generated chronic shortages and exacerbated inflation.
              ... The Head of State additionally pledged to redouble security efforts against the illicit practice of reselling known as bachaqueo as part of his government’s overall fight "to put an end to the menacing plan that they have against our economy.”
                Resellers, or bachaqueros, make a living by buying key products at government-regulated supermarkets and selling them on the black market for outrageous profit. The vendors, often from poor neighborhoods, work in groups that have been likened to mafias for the way they will rig the market and bribe distributors to provoke scarcity. They are also known to pay people to wait in line at state supermarkets in order to access the carefully regulated merchandise, causing lines to be much longer than necessary.
                  National Assembly President Diosdado Cabello has also urged socialist party (PSUV) mayors to take steps to confront bachaqueo in their municipalities.

                  So, we have here multiple ear-marks of state heading into collapse and failure: (i) a corrupt government in league with trans-national criminal organizations; (ii) socialism/"bread and circuses" resulting in unaffordable social programs and price controls, and (iii) economic collapse, (iv) shortages of food and products, (v) increased crime, (vi) criminalization of "hoarding", and (vii) looking to foreign conquests to prop the whole thing up.

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