"Food lines are part of our daily existence," exclaims one member of the Venezuelan public, as people line up for hours outside state-owned supermarkets to buy regulated staple goods, or, as Bloomberg reports, pay three times as much from street hawkers. However, on the other side of the fence in Southern Caracas, President Maduro's "21st Century Socialism" looks a little different as Bloomberg notes 100s of brand new (admittedly Chinese) cars await new owners following the Defense Minister's pledge to purchase 20,000 autos for the armed forces. Simply put, in order to maintain the appearance of utopia, Maduro ensures military personnel don't have to contend with the economic chaos in the rest of the country.
Fifteen years after Chavez started his revolution in “21st century socialism,” South America’s largest oil producer is running out of money, the economy is contracting and companies and investors are deserting what was Latin America’s richest nation in 1980.
Inflation has more than doubled and the bolivar slumped 76 percent against the dollar on the black market since Maduro came to office in April 2013 describing himself as the “son of Chavez.” More importantly to his support, the poverty rate has started to rise, climbing to 32 percent at the end of last year from a record low 25 percent in 2012, according to the National Statistics Institute.
Discontent over rising prices, soaring crime and mounting shortages sparked nationwide protests in February that were put down by soldiers and police resulting in 43 deaths, according to the public prosecutor’s office.
So why no riots? Why no violent uprisings? Simple - Military personnel don’t have to contend with the economic chaos in the rest of the country.
Since Maduro came to power 17 months ago, the armed forces have created their own television channel, housing program and bank, the only military-owned one outside Iran and Vietnam.
A third of Venezuela’s 28 ministers and half the state governors are now active or retired officers, mostly companions of former paratroop commander and late President Hugo Chavez.
“The military remains the only element guaranteeing political stability under Maduro’s weak government,” Diego Moya-Ocampos, an analyst at consulting firm IHS Country Risk, said by phone from London. “As an outsider, Maduro had to give the generals a bigger role in managing the country to keep them on-board. He has militarized politics.”
Maduro named a brigadier general as economy vice-president on Sept. 2, the second most important post in the cabinet. He now has eight active or retired officers in the cabinet, up from five in 2012, the year before Chavez died.
And to ensure their continued confidence...
While the Venezuelan people line up for hours outside state-owned supermarkets to buy regulated staple goods, or pay three times as much from street hawkers (with one in four basic goods were unavailable at any given time in January, the last month for which figures are available).
Venezuela’s national parade ground at the Fort Tiuna military base presents a scene that local civilians can only dream of -- stalls laden with goods and no waiting lines.
The 43 trucks and tents at the market in the military base on Aug. 22 were loaded with subsidized milk, cooking oil and detergents -- goods that are out of stock in most shops.
The market with everything from subsidized meat to baby strollers, along with loans, new cars and apartments,
For some context as to what this means... Cars are particularly prized in Venezuela because they don’t lose value amid the world’s highest inflation as their prices tend to track the dollar... and so...
At Fort Tiuna in southern Caracas, hundreds of new Chinese cars glistened in the parking lots, after former Defense Minister Diego Molero pledged in May of last year to purchase 20,000 autos for the armed forces.
That compares with just eight new cars imported into the country of 29 million people in August, according to the Venezuelan Automotive Chamber.
The problem is... the people are starting to get it...
Maduro’s popularity is falling. The president’s approval rating dropped to a record low of 39 percent in August from 60 percent in December, according to Caracas-based polling company Hinterlaces.
“We have always supported this government, mobilizing the people in shantytowns, campaigning for them,” said Jacqueline Zuniga, 39, coordinator of the Women’s Movement and member of the ruling United Socialist Party. “They give us nothing in return.”
“This is a disgrace, not the socialism Chavez had in mind,” Villalonga, 52, said by telephone from Barquisimeto, Lara. “I feel impotent in front of this rigged system that favors the military.”
“There’s a political cost Maduro will pay for prioritizing the soldiers over the poor neighborhoods,” Hugo Perez Hernaiz, sociology professor at Central University of Venezuela in Caracas, said by telephone. “The size of this cost will be seen in the next elections.”
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Coming to America soon?