Archive for May 17th, 2010

Interview from El Nacional with Moises Naim

May 17, 2010

This is a joint post between yours truly and Daniel Duqenal because we think that this interview of Moises Naim in El Nacional is an excellent vision of what has happened and is happening in Venezuela.  Nothing really that Daniel or myself have not written in one way or another, but Mr. Naim says it as clear as it is possible.  You can read the Spanish Original here (by subscription) or here.


The current situation in Venezuela is as complex as the words of Moisés Naím are clear and strong . His unmistakable style has always been lucid during his long career in international political economy. Today, he talks about the consequences of the policies implemented in the country, rather than recommendations for their solution because he is convinced that the President will maintain his devastating policies. “Chavez will not hear anything different from what he believes, even though reality sends him strong signals that he is wrong.”

– What is the economic diagnosis of the country? –
The same as that of all Venezuelans. What more needs to be said of a country that has simultaneously extraordinary oil revenues and the highest inflation in the world? Not even African countries without governments and devastated by war have higher inflation than Venezuela. What can we say about the management of a country that has the largest energy resources in the hemisphere but that forces its people to live in a constant nightmare of blackouts and electricity rationing? A country whose policies have the effect of driving massive amounts of capital overseas and the its best trained people, and whose government gives to other countries and without anyone’s’ permission the  nation’s wealth while the vast majority live in misery? The cruelest irony of all this is that the President who claims to be the best at understanding the situation and the suffering of the poor is the one that has imposed the most devastating policies for those same poor. There is no “mision“, grants, gifts, subsidies or other handouts that he can give to poor Venezuelans, that can offset the impact of the combination of inflation, unemployment and murders in which he has condemned them to live.

– Capitalism or socialism, market or state? –

I believe in a strong state and that it executes well the things that the market and the private sector cannot do or should not do. Police, justice, defense and so on.
The market will not solve education, health, or the insecurity of people in the neighborhoods. That has to be done primarily by the state. But to be effective, the State must be selective. It cannot do everything. The Manichean debate between state and market, between capitalism and socialism is a waste of time and serves only to deceive the unwary. It is obvious that it takes both. It is not one or the other, but how to cleverly combine government and market.

– What do you think is the most serious problem in the economic sphere? –
There are many and they are all well known. But perhaps one of the main mistakes President Chávez has made  is to fall in love with an economic model that depends for its success on this country’s scarcest resource:  efficient government officials. When the President nationalizes companies right and left, they are handed over to officials who don’t have the faintest idea of how to manage such activities. And what we’ve seen is that despite the efforts and good will, or sometimes simply because of laziness or corruption these  nationalized companies quickly collapse. And if the government officials are efficient, why distract them, forcing them to produce sardines  or operate cement industries? Top officials should be put in charge of the public functions that are a priority for the country, those that if are not carried out by the state no one else will perform. If the state does not produce sardines, rice or cement, others can do it. But if it does not ensure that people are not  kidnapped or killed when returning from work, then who will? Protection and personal safety is a service that the rich can buy from the private sector. But the overwhelming majority of Venezuelans depends on the government to protect them and their family.
For Venezuelans it  matters less who is the owner of this or that company, than the fact that their children are being murdered on a daily basis while the President does not seem to be too concerned.

– What will be the result of all these policies? –
When a credible accounting of what has happened in Venezuela in these last ten years is carried out, we will discover that we lived through one of the most important episodes in the economic history of the world in terms of wealth destruction, loss of productivity and waste of resources that the country desperately needed to lift people out of poverty. Many wars have produced less material damage than the economic policies of these times. Today there are more murders in one weekend in Caracas than in Kabul.

-If you had the power for deciding measures an taking decisions on economic matters, what would you do?
One of the paradoxes of the situation we find ourselves in is that it is not even worth talking about what should be done on economic matters. What good is it to talk about the devastating effects which has the fact that the Government steps with one  foot all the way on the accelerator of consumption , while at the same time pushing strongly on the pedal that brakes the supply. It maintains an aggressive monetary policy and massive public spending which stimulates consumption , while at the same time and almost daily  it announces decisions that cuts  the supply needed to satisfy the booming consumption. We see how the President constantly thunders against speculation and corruption only to follow his laments and threats with measures that everyone knows boost speculation and  provide even more lucrative opportunities for corruption. He claims to suffer for the poor while his Government has become a very efficient poverty producing machine.
Do you think the Government will abolish the capitalist system and replace it with a socialist system? Do you think it will be able to achieve it?
I only know what the President of the Republic says. And Chavez is sincere, repetitive and emphatic with that. Why should I not believe him when he says he hates capitalism and adores socialism? It is one thing for us not to like it, but it is something else to refuse to listen to what a leader say. Until now he has maintained all of his promises on matters of public policy, even if the policies  don’t work and lead him not to failure regarding his promises about results.

-Why do you think the President is so committed to policies that have not worked?

Because he suffers from ideological necrophilia. He is in love with dead ideas. I don’t know what are the psychological motives that lead him to be in love with a vision that he has proof that has not worked anywhere. And he does not need to know history. It should be sufficient for him to see what is happening to him and the country. At the beginning, the socialist promises and the rhetoric of resentment, racism and revenge gave him political dividends, but the bet on fundamentalist socialism has not been won by anyone in the world. At the end those attempts have always created immense human suffering and the political failure of the fundamentalists that promote them. I don’t know if the love for those dead ideologies that the President has are chronic and addictive. Perhaps he will fall out of love with those bad ideas that he is infatuated with once he finally realizes that things are not working. But for now that love has blinded him. It is a pity that millions of Venezuelans have to pay the immense human costs engendered by Chavez’ blind passion.

-How do you judge the performance of the Venezuelan opposition?
With frustration, understanding and hope. Frustration, because it is difficult to see how it makes mistakes over and over again. Understanding, because the opposition to strong regimes is always fragmented, clumsy, easily sabotaged by the regime and prone to score goals against itself. And hope, because there is no doubt it has matured and learned from its errors. It is admirable to see the persistence and disposition of many in the opposition to continue their fight despite the risks that implies. How dangerous and costly is to be part of the opposition and how easy and lucrative it is to be Chavista! And it is quite revealing that despite this there is opposition everywhere: in the universities, high schools, the workers movement, the business sector, the farmers and cattle ranchers, in the world of culture and science. From the statements of some military that we have read recently in the press even in the Armed Forces. And even within Chavismo. Even the Cubans that come here end up being anti-Chavez.

What are your projections for the parliamentary elections?
That the opposition will have more representatives in the Assembly that at any time during the Chavez era. It will be interesting to see how he will adapt to a situation in which he no longer controls everything and everyone, all of the time. The muscles you don’t use for a decade become atrophied. And the President has spent too much time without exercising the muscles that allow for the reaching of  compromises with those that do not share your ideas, the negotiation with opposition politicians and the search for agreement with other social forces. All of this is known in other countries –and was known in the old Venezuela– as democracy…