The Foreign Service Journal, April 2019

THE FOREIGN SERVICE JOURNAL | APRIL 2019 41 ease,” the natural resource curse wherein abundant resources sold internationally in dollars lead to a gross overvaluation of the currency and a collapse of other export sectors. This is usually accompanied by rampant corruption and, over time, tends to breed a certain economic lethargy among the general population, which comes to expect handouts from the state. So while Venezuelan policymakers could have used the country’s ample resources—from land and minerals, to tourism and an educated workforce—to diversify its exports or build up manu- facturing, the country exported little aside from oil (and a few Miss Universes) from the 1970s onward. This is fine when oil prices are high—and Chavez profited from a boom to remain in power—but deadly when they fall. I saw the developing problems personally during the “Cara- cazo” of February 1989, when hundreds of people protesting a rise in Venezuela’s ridiculously low gasoline prices and other “neo-liberal” economic measures were killed. It was a rude awakening for the leisure class that was followed in 1992 by Chavez’s failed coup, and in 1993 by the impeachment for cor- ruption of President Carlos Andrés Pérez. Pérez was not the first corrupt leader who enriched his cro- nies and turned a blind eye to growing inequality. It is a well- trod path, not just in Venezuela and Latin America, but around the world. There are many formulas for stashing money, deny- ing wrongdoing and clinging to power by suppressing detrac- tors and subverting the political system. While Maduro has set new standards, taking Venezuela down to 169th out of 180 in Transparency International’s Corruption Perception Index, the country has a long tradition of corruption, with colorful stories such as the dictator Perez Jimenez forgetting a suitcase stuffed with $2 million on the runway during his escape in 1958. Corruption was less resented or hidden during Venezu- ela’s relatively successful decades from the 1960s to the 1990s, especially when oil money was flowing freely and more people were getting a cut. But it was always there in many shapes and forms—from outright theft, gifts to politicians, bank accounts in tax havens and apartments in Miami and Panama to Ven- ezuela’s omnipresent palanca . This system, whereby one gets something done in a badly functioning administration through the “lever” of connections, seems to be part of Venezuelan culture, where family and friends often count more than society as a whole. So throughout the 1980s and 1990s the scene was slowly being set for change. The poor were literally massing in the hills of Caracas ready to support a charismatic leader such as Chavez, whose upbringing, color and culture more closely rep- resented their own than that of his white upper-class prede- cessors. A brilliant populist, he was the right man at the right time—his rise to power largely the result of the corruption and self-serving policies of his predecessors and the Venezuelan elites. While they were aghast at his election as president in 1998, which would have been unimaginable a decade earlier, it should not have been a surprise. Most commentators took a wait-and-see attitude. U.S. Ambassador to Venezuela John Maisto famously said: “Watch what Chavez does, not what he says.” Chavez in Power Indeed, for the first two years Chavez did more or less the right things. While steadily drifting leftward in his rhetoric, he hired orthodox economists and courted the private sector, even visiting the New York Stock Exchange. His oil-fueled spend- ing on the poor was effective enough to make a real difference in their lives and substantially lower poverty and inequality. Power and the pernicious influence of that puppet master, Fidel Castro, had not yet poisoned his thinking. In fact, he appeared to be a good man who had won a strong popular mandate to reform a system that no longer addressed the needs of most of its citizens. It was an incredible opportunity, and he had the money to make it happen. I was fortunate to meet Chavez briefly in 1999 during a sur- prisingly informal visit to the statue of Simon Bolivar in Paris. His charisma was palpable and, far from attacking me as a Yankee imperialist—which became his byline later—he jokingly chided me for having abducted one of Venezuela’s attractive women. Even then, however, all was not rosy. I was also present when Corruption was less resented or hidden during Venezuela’s relatively successful decades from the 1960s to the 1990s, especially when oil money was flowing freely and more people were getting a cut.