Every time we believe Venezuela has hit rock bottom, president Nicolas Maduro finds a way to surprise us. In the latest installment of Venezuela's social collapse, we find that the president of the socialist utopia has put the armed forces in charge of a new food supply system aimed at alleviating crippling shortages, in the process ceding even more power to a military apparatus that is already involved in everything from banking to imports. According to some interpretations, this is merely the latest step in the military's takeover of a government that has now lost virtually all support as well as authority to govern.
As WSJ reports, the head of the armed forces, Defense Minister Vladimir Padrino - who now becomes one of the most powerful people in the socialist government - will be in charge of transporting and distributing basic products, controlling prices and stimulating production, according to a decree published Tuesday in the official gazette. “All the ministries, all the ministers, all the state institutions are at the service and in absolute subordination” to Padrino’s so-called Great Sovereign Supply Mission, Maduro said in a televised address Monday night.
Venezuelan Defense Minister General Vladimir Padrino.
The appointment comes at a time of unprecedented crisis for Venezuela, where a full-blown food crisis has emerged over the past few months. Entire days are now spent outside stores waiting to buy a handful of basic items, with protests and looting rising sharply. Hoarding and flipping scarce goods have become a growth industry. Those who buy and resell, known as bachaqueros, are among the few succeeding in this economy.
As a result, the armed forces have swiftly repressed all opposition rallies as well as the food riots that flare up daily across the country.
As Bloomberg adds, in an attempt to regain control, President Nicolas Maduro has tapped loyal neighborhood groups, called CLAPs, and put them in charge of distributing as much as 70 percent of the nation’s food. The committees, whose meetings start with socialist anthems, are told they must wrest control of the food market from those reselling it illegally.
“There is an economic war being waged,” said Janette Carillo, 45, a local CLAP member who helped oversee the Catia food delivery. “Our job is to break the arm of the bachaquero,” she said. After taking on global powerhouses like Exxon Mobil and PepsiCo., the government is now targeting bachaqueros -- frantic, ordinary people who have abandoned jobs to wait in line all night in order to get by. The notion that they are part of a capitalist assault on Venezuela is hard to square with the facts. Meanwhile, opposition leaders contend that the food trucks exclude their followers.
"This is now a completely militarized government,” said Luis Manuel Esculpi, a security analyst in Caracas and former head of the armed forces commission in the congress. “The army is Maduro’s only source of authority.”
To be sure, since coming to power three years ago, Maduro has relied increasingly on the armed forces as a spiraling economic crisis pushed his approval ratings to record lows and food shortages led to lootings. Generals are already in charge of state companies importing the bulk of Venezuela’s food; they run the country’s largest bank, a television station and a state mining company.
Some see through the latest news as a de facto takeover by the local military, one which allows Maduro to quietly exit the scene of the crime and leave the local army to handle the upcoming revolution.
“Maduro is giving the keys to Miraflores [presidential palace] over to a military leader who is unable to confront the economic crisis,” said opposition deputy Julio Borges. “What this means is more roadblocks, more corruption and less production.”
The problem for the military is that by fully aligning themselves with the Maduro regime, they will also lose the people's trust, making violent conflict virtually inevitable.
A former high-ranking general said the new measures would end up discrediting the armed forces, “because now they’ll be responsible for sustaining a model that has no viability.” He said the move would also open more doors for corruption in a country the watchdog group Transparency International considers among the world’s more corrupt.
Meanwhile, the Maduro regime continues to hand over increasingly bigger chunks of the local economy to the army, most recently confiscating the plant of Kimberly-Clark which announced over the weekend that it was abandoning its local operations.
“If all the factories now have to run everything by the military, this isn’t going to make raw materials appear all of the sudden,” said Juan Pablo Olalquiaga, president of Venezuela’s industrial chamber, Conindustria. “The president is showing he does not understand how to manage the economy.”
Ultimately, Venezuela's real food shortage problem is less due to distribution, no matter if tasked to the military or private sector, it is the supply. The government plans to halve imports to make good on billions of dollars of bonds maturing later this year.
What is most surprising, however, is that Venezuela continues to sacrifice the well-being of its people to placate its creditors: for some inexplicable reason, the completely insolvent country, which recently may have seen much of its gold confiscated by Citigroup, refuses to default and instead allocate its dwindling reserves to providing the bare necessities for the population. But then we are reminded of an article we wrote in December 2014:
And suddenly everything becomes clear.