Caricom after Chavez

Hugo Chavez

By Herman Silochan


Port of Spain, Trinidad: Arriving from ice cold Canada this week, it’s easy to forget how hot this part of the world can be; shorts, t-shirts and slippers rule daily wear. Islanders go about their business, oblivious to much of the outside world, except for their overseas families; even the Laventille crime scene where gangs have been burning houses in rival territories, make page three. People don’t really care, after all its gang warfare, and if “they kill each other, all the better for us” is a common refrain.


I ask quite a few about the death of Hugo Chavez in neighbouring Venezuela and I get a shrug. The three major weekend newspapers did their standard obituaries but what is lacking, I find, is any new independent analysis of the future of Venezuelan-Caribbean relations. After all Trinidad is eyesight away, both nations shorelines having witnessed hundreds of years of movements of people and goods – mostly contraband – and of course transshipment of billions of narcotics in the last half of the 20th century and well within the 21st. One top security man insisted to me that Trinidad is in fact a narco-state and not an oil producing one. Actually, I heard this several times in one weekend chatting with some retired bankers.

But there is an economic concern among regional bankers with the demise of Chavez. For the next six or seven months after the legislated Venezuelan election of Chavez’ successor, uncertainty will reign, as new internal political alignments will certainly take place. If Chavez’s hand-picked successor, Nicolas Maduro wins, some of the “chavismo” will linger on in the far future, with populist policies still winning the hearts and minds of the poorer classes. Indeed, during Chavez’s 14 year rule, he successfully reduced poverty levels for the lowest of the lowest classes by almost 25 percent.

However, if the conservative challenger, Henriqué Capriles who closely lost to Chavez in the last election, rebounds and wins,  a lot of internal and external policies will be scrapped and/or revamped.

What were the factors which sustained Chavez’s successful populism? Oil, oil, oil. Succinctly, the price of oil. When he came to power in 1999, oil prices had already begun to rise to around $80 a barrel. By 2008 it reached a record $146 a barrel. This time period coincided with Chavez’s successful export of anti-colonialist rhetoric – read the United States – because he was able to back it up with cheap credits and gifts to surrounding governments. He sustained the Cuban shaky economy with oil delivery of 100,000 barrels a day, worth annually about $3 billion. In his Petro Caribe plan, 17 independent Caribbean states [except Barbados and Trinidad and Tobago] benefited to the tune of $14 billion. Then there was an accompanying ALBA Caribe Fund and ALBA Food Fund dispensing in total almost $202 million [all figures in US$].

As the price of oil began to falter and even drop in the past two years, so did Chavez’s influence. While his popularity at the grass roots level remained, he did not have the same international iconic clout as Fidel Castro.

What has also been happening globally is that anti-Americanism has waned since the election of Barack Obama and the winding down of two expensive wars. As it is, no one seeking political office in the Americas today will resort to USA bashing to gain points.

The Economist Magazine, in this week’s commentary on Chavez, called it a “rotten legacy.” By subsidizing the Cuban economy with Venezuelan surplus money, it was putting off the inevitable that Castro’s successors will have to face, that Cuba is basically bankrupt. Then Venezuela itself had to devalue its currency by 32 percent last month. While the slogans kept the Chavez image going, underneath in the real world, all commodity prices began to decline. To make matters worse, Venezuela had to mortgage some of its future oil production to energy hungry China. Then with foreign investments slowing to a trickle, the economy relied almost 100 percent on oil, at the mercy of international price fluctuations.

But beyond the economics of running a country is the social reality of everyday life; true the dirt poor did benefit, but for how much longer? Already, factions within the ruling party have emerged. Chavez has been seen to debasing all functioning institutions gathering power into a one man operation. The resulting cronyism, scratch-my-back departmental relations has rendered many operations to ineffectiveness.

On top of that, in the past 14 years Venezuela had the highest murder rate in the Americas and one of the highest in the world. Acting President Maduro admitted that his country had 16,000 homicides in 2012. It is also acknowledged that the National Guard and the military is riddled with criminal elements shipping out of the country the massive cocaine amounts through the Caribbean.

As the financial reality set in, beyond the criminal, either of Chavez’s successors will have to take a hard look at its oil backed foreign policy.

So far it doesn’t look too good for CARICOM. Maybe, with the coming United States oil surplus, we shall all fall back into the imperialist sphere of influence.

So much for socialist solidarity.