With each passing day, it is getting harder and harder for Hugo Chávez’s remaining political and journalistic allies to defend his policies. Last week, the Venezuelan president announced a significant devaluation of the bolívar, Venezuela’s national currency, thereby making a major inflation problem even worse. “Latin America learned in the 1980s that policies like this do not work,” Harvard economist Ricardo Hausmann, who served as Venezuela’s minister of planning in the early 1990s, told Bloomberg News.
Venezuela already has the highest inflation rate in Latin America, thanks to the gradual Cubanization of its economy under Chávez. Annual inflation (the official rate calculated by the central bank) was 25 percent in 2009; it could be higher -- perhaps much higher -- this year. Even before the devaluation, the Associated Press was reporting that “some Venezuelan analysts estimate prices could rise by more than 35 percent.”
So how does Chávez propose to deal with inflation? He will use the military to prevent Venezuelan merchants from raising the prices of consumer goods. “Go ahead and speculate if you want, but we will take your business away and give it to the workers, to the people,” Chávez said yesterday on his television show. Welcome to “Bolivarian” socialism.
The attacks on economic freedom in Venezuela have been accompanied by new attacks on political and judicial freedom. In mid-December, Judge María Lourdes Afiuni was arrested by Venezuelan police after she ordered the release of a banker named Eligio Cedeño, who had been detained arbitrarily since 2007 on politically motivated charges. (Other judges and lawyers involved in the Cedeño case have faced harassment in the past.) A trio of United Nations human-rights experts has called for Judge Afiuni’s “immediate and unconditional release.”
It would be nice if governments across the region echoed that statement and championed her cause. But given their track record, I don’t expect much. Latin American officials have hardly lifted a finger to save Venezuelan democracy. They have been largely silent about Chávez’s establishment of a near-dictatorship.
Venezuela is not yet another Cuba. But as the devaluation controversy and the imprisonment of Judge Afiuni suggest, it is rapidly heading in that direction.