Venezuela’s Capital Is Booming. Is This the End of the Revolution?On the poorer outskirts of the city, residents continue to struggle with water shortages and malnutrition. And in the countryside beyond, Venezuela is falling apart, with residents lacking even the most basic services, like electricity and the police.
But the wealthier areas dotting the capital have undergone a striking economic boom in recent months.
Shopping malls that were deserted six months ago are bustling, and imported SUVs course through the streets. New restaurants and bars are popping up weekly in the wealthier parts of town, their tables packed with foreign businessmen, fashionable locals and government insiders.
After years of nationalizing businesses, determining the exchange rate and setting the price of basic goods — measures that have long contributed to chronic shortages — Mr. Maduro seems to have made peace with the private sector and let it loose. And while the country’s economy continues to contract overall, the declining regulations have encouraged companies serving the wealthy or the export market to invest again.
The way the Times article phrases this makes it sound like they are two independent movements, the whole of the country shrinking because of Maduro, and Caracas doing quite well because of "reforms", but in fact they are the exact same motion. If the overall economy is contracting but the high income areas are growing, that means that investment is shifting from basic goods to luxury goods and capitalist consumption - at the expense of consumer goods production. That is why bars and malls are exploding. Meanwhile the rest of the country is left behind. Maduro thinks he is saving the country by allowing dollarization to occur but really he is just selling the country out.
In a sign of newfound market confidence, about 100 Venezuelan companies have applied to issue new bonds in 2019, the highest figure in a decade. The country’s biggest rum producer, Ron Santa Teresa, last week completed the country’s first new issue of shares on the local stock exchange in 11 years.
The government has slashed red tape and turned a blind eye to taxation, fueling a boom in private exports of everything from oil to chocolate, enriching the politically connected and traditional business elites.
Imports by private companies overtook those done by the state for the first time in Venezuela’s modern history last year, according to Mr. Molino, the economist.
“There’s a lot of money going around at the moment, you just need to know how to find it,” Zairet López, an accountant, said recently at a packed music festival in Caracas, which charged a $70 entry fee, or the equivalent of 14 months’ worth of the country’s minimum salary.
In short: the United States has succeeded in a bloodless regime change. The same party and the same president are still in control but the economy is quickly bending in the direction the global order has always wanted it to. Everything Chavez did is either undone or in the process of being undone. State industries are in the process of being privatized, market controls are fading away, the economy has become dollarized (say hello to dollar denominated debt...), and pre-revolution inequality is already back. For papers like the Times, it is regrettable but necessary. For Elliot Abrams it is a resounding success of maximum pressure. For the average Venezuelan, it is painfully sad.
To borrow a closing thought:
“This is savage capitalism that erases years of struggle."
