From the March 12, 2008 New York Sun
March 12, 2008
by Jaime Daremblum
President Chavez tried hard to start a war, or at least look like he wanted to start a war. His excuse, of course, was the raid on Colombian rebels by Colombian troops — on Ecuadorian soil. What all this had to do with Venezuela might not have been clear to outsiders, but Mr. Chavez knew what he was doing. His posturing was strategic, designed to deflect public attention from the increasingly evident failures of his regime. He desperately needed something big to distract disaffected Venezuelans from his failures, and a skirmish with Colombia might have done the trick.
Creating an external conflict to distract attention from internal trouble is a favorite trick of every strongman. Think of Argentina's General Leopoldo Galtieri who instigated war with Great Britain over the Falkland Islands in an effort to draw attention away from his military junta's disastrous policies.
Mr. Chavez hoped that stirring up trouble with Colombia would serve a similar end and divert Venezuelans' attention from the breakdown of his "Bolivarian Revolution." For Mr. Chavez, it didn't matter that the leader of the Revolutionary Armed Forces of Colombia (FARC), Raul Reyes, was killed in Ecuador, not Venezuela; the killing was a useful pretext for diversionary blustering and threats.
Leave aside the fact that information found on Reyes's laptop confirms that Mr. Chavez is a sponsor of FARC, the terrorist group that has been waging an "insurgency" in Colombia since the 1960s. Mr. Chavez was goading the Ecuadorian government, provoking it to overreact to what is finally a fairly mild incident, because he hopes no one will notice that his "Bolivarian Revolution" is crumbling and his popular support rapidly eroding. Not even a $100 price tag on a barrel of oil can hide his failures anymore.
Among these failures are food shortages — staples such as milk are in short supply in much of the country following years of government interference in production decisions — and the highest inflation rate in Latin America and the Caribbean — 22.5% last year, in spite of price controls over many products. This combination of shortages and high inflation takes a particular toll on the poor, whom Mr. Chavez had counted among his most loyal followers, but who are now beginning to doubt the wisdom of backing him.
To shore up their support, Mr. Chavez established new price controls, which — as anyone could have predicted — have further discouraged production and worsened inflation. The well-off turn to the black market for goods, but the poor, whom Mr. Chavez claims to protect from price increases, are increasingly left in need.
Displaying something like an inverted Midas touch, Mr. Chavez also has managed to weaken the oil industry, the lifeblood of Venezuela's economy. Although the regime keeps the data hidden from the public, many telltale signs point to deep trouble in this vital industry. Oil output has been declining for almost three years, ever since Mr. Chavez ousted most of the managers of the national oil company, PDVSA, and replaced them with his cronies.
More recently, PDVSA abruptly ceased permitting customers the usual 30 days to pay for oil and started demanding payment within a week after shipment. This new practice has brought to light the cash shortage afflicting PDVSA — a shortage aggravated by the fact that contractual disputes with Exxon Mobil and other oil companies have caused tribunals in London, New York, and the Netherlands' Antilles to freeze PDVSA assets.
The cash crunch at PDVSA is especially threatening to Mr. Chavez because he barters oil for support inside and outside of Venezuela. Right now he makes 300,000 barrels of oil available at below-market prices every day. Cuba, for instance, gets 65,000 barrels a day (almost 24 million barrels per year), in addition to other gifts that amounted to $2.3 billion between 2006 and 2007 alone.
As a result of those blunders, Mr. Chavez is no longer able to spend his way out of trouble, as he has done throughout his tenure as president; at least he cannot do so without further endangering the stability of PDVSA and aggravating inflation. This hampers his ability to address the growing dissatisfaction of the Venezuelan people over food shortages and other problems such as rampant crime.
And this is why stirring up a conflict with Colombia made so much sense to Mr. Chavez. Amid mounting internal problems of his own creation — problems that he can no longer manage simply by throwing money at them — Mr. Chavez was hoping that an old trick might just work, and that conflict with Colombia would distract Venezuelans from their own problems and spark patriotism and renewed support for his regime. Luckily, Colombia did not fall into Mr. Chavez's trap. It would be luckier still if the people of Venezuela came to see once and for all who their "comandante" really is.
Ambassador Jaime Daremblum is a Hudson Institute Senior Fellow and directs the Center for Latin American Studies.
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