Corruption, falling oil prices and talk of a coup: The end of Chavez’s socialist dream in Venezuela

Special Report: It is two years since Hugo Chavez’s death but to his followers it feels like a lifetime. Venezuela is collapsing amid falling oil prices, rampant corruption, political oppression – and dark rumours of an imminent coup

The government says the body of Hugo Chavez is where it should be, encased in the black marble tomb set in the courtyard of a small military fort overlooking Caracas under the guard of four Hussars and touched by the hands of a constant stream of pilgrims. But then it says a lot of things. Such as claiming that the United States backed a recent plot to bomb the presidential palace. And how in Venezuela all is well.

But Adriangela Yomeiny is content to believe what she’s told and on this morning, a public holiday for Mardi Gras, she has come to pay homage. First she inspects the exhibits tracing the rise and untimely death of Mr Chavez from cancer in March 2013, pausing at his hairbrush and a mock-up of his favourite dessert that looks a lot like vomit. It’s when she gets to the tomb itself, lilies on its lid, that she crumbles.

“Seeing him in this condition, it’s… hard,” says Ms Yomeiny, 30, wiping away her tears. She has come with her son from their home in a local barrio, one of the overcrowded, often violent hillside slums that surround Venezuela’s capital city. “I will always be with Chavez, with the revolution, with Communism.” Hers is the love that has kept the Chavez socialist experiment in Venezuela alive, even after his death.

It’s also the love that his hand-picked successor, Nicolas Maduro, a former union leader and bus driver, must now depend on. Ms Yomeiny seems ready to oblige. The economic crisis now upon Venezuela, with worsening shortages of daily needs like milk and medicines, is the fault of opposition politicians, she says. “They are garbage. They have evil in their blood.” But when asked if she loves Mr Maduro as she did Mr Chavez, she hesitates. “I like him,” she finally says. “But Chavez was unique”.

Yet can the faith of Ms Yomeiny and those like her – the “Chavistas” still enamoured of the Bolivarian revolution that Mr Chavez began in 1999 – last much longer? It is an urgent question as doubts grow that Mr Maduro, who barely won the election against his opposition rival Henrique Capriles in 2013, can complete his term. Each day brings fresh rumours of impending violence and rebellion.

Tensions spiked dramatically last week on the first anniversary of last year’s anti-government rioting that left 43 people dead and occasioned the surrender to the authorities of Leopoldo Lopez, a prominent opposition figurehead, who remains in jail today. Facing charges of inciting last year’s unrest, he is quite clearly a political prisoner. Meanwhile late on Thursday, armed intelligence agents arrested the Mayor of metropolitan Caracas, Antonio Ledezma, also aligned with the opposition, apparently without warrant.

Opposition leaders said yesterday that allegations linking Mr Ledezma, 59, to the alleged coup plot cited by President Maduro, were false and demanded his immediate release. “He’s in good spirits and very optimistic of demonstrating that he has no links with any wrongdoing,” his lawyer, Omar Estacio, said after briefly visiting the mayor with his wife Mitzy early yesterday. The US has also repeatedly denied that it is involved in trying to destabilise the South American nation.

In a statement, the public prosecutor’s office said Mr Ledezma would be formally accused of “presumed involvement in conspiratorial acts to organise and carry out violent acts against the democratically constituted government.”

News of the arrest suggests a President digging in, his willingness to act as a dictator, ignoring all due process, fed by paranoia. It was first broken on Twitter by David Smolansky, also a close ally Mr Lopez and the mayor of el Hatillo, another Caracas municipality. Earlier, he had told The Independent that the conditions that sparked last year’s unrest were far more dire now. And people are far angrier.

“I hope that Venezuela doesn’t fall into civil war, because it is the worst thing that can happen to any country. But right now we are at the worst moment; we are in our biggest crisis,” he said inside his office, listing three principal factors: the failing economy, staggering rates of violent crime and corruption. All are ruinous and interconnected. Corruption, Mr Smolansky asserted, has sucked $20bn (£13bn) out of the economy. And the economy’s downward spiral spawns ever greater tides of violence.

While fantasy and magical thinking may be the hallmarks of the Maduro regime, speculation about Venezuela, the country with the largest oil reserves in the world, being on the brink of spinning apart is not idle.

“It would be a disaster and it could develop into a civil war,” warned Oscar Alvan, a university teacher and political commentator for El Universal newspaper. He noted that while many members of the military are embedded in the government, there are others in the professional military who are privately despairing of Mr Maduro and could yet try to oust him. “It is a very explosive situation.”

Corruption is mostly well-concealed and in Venezuela takes all forms. The US recently attempted but failed to take a senior Maduro official into custody for alleged drug trafficking during a brief trip overseas. “The most important legal industry, oil, is run by the government and the most important illegal industry, drug trafficking, is allegedly also run by the government,” Mr Smolansky averred.

And corruption has been the inevitable result of Venezuela’s rigged foreign exchange system. Put simply, the government maintains two artificial rates for imports first of vital goods like medicines and for regular imports, say cars, of 6.3 and 12 bolivars to the US dollar respectively. But on the black market 170 bolivars buys one dollar. It is just too easy to game the system and reap the profits that the huge disparities offer. A week ago, the regime quietly gave a nod to reality and accepted the black market rate as a legitimate third exchange level, devaluing the country’s currency by 69 per cent overnight.

For a glimpse of how unevenly the spoils of Mr Chavez’s supposed socialist utopia are shared, you might have passed by the old Officers’ Club and Hotel at Fuerte Tiuna, the largest military base in Venezuela, on the south side of Caracas, last Tuesday. Not everyone is allowed in of course. It is for military brass and their friends, often top party officials. A pair of heavily guarded green gates to one side of the club’s entrance leads to the house President Maduro lives in.

While the rest of the country was under a strict dry law – a total ban on alcohol sales for the four days of Mardi Gras – the elite was having a party. The perplexing boom-boom-boom of a fiesta in full swing sounded from beyond the lobby and from up a short flight of stairs. A few more steps and suddenly there was Cancun, or a version of it. Sun chairs occupied by barely dressed bodies fringed giant pools on two different levels, cash bars were weighed down with bottles of rum, whisky and tequila. A disco dance troupe did its frantic routine for revellers to follow. It was just before noon.

More than 24,000 murders were recorded in Venezuela last year. This year, Caracas alone is averaging 35 murders a day. Many locals choose simply not to go out after dark. Crews billeted in Caracas with American air carriers are ordered to stay in their hotels, no exceptions. Billboards throughout town go dark at night, because the power grid is crumbling. The shortages started to get serious in December as collapsing oil prices proved the final straw for a wildly mismanaged economy.

Oil accounts for 95 per cent of export earnings. In the years since Mr Chavez came to power, oil output has dropped 25 per cent and huge quantities are essentially given away, to neighbours to curry favour or to Venezuelans for whom petrol is roughly one penny a gallon – or basically free. Items that today are almost impossible to find in the capital include milk, baby milk, nappies, deodorant, soap and shampoo. So too are many medicines. Also absent from the shelves are condoms, bringing the threat of increased HIV rates and unwanted pregnancies from unprotected sex. Queues form outside supermarkets before dawn and purchases are being rationed by the government. Military police patrol checkouts to quell fights.

“It’s horrible, horrible,” lamented Lina Lorusso, 77, in the aisles of a San Lorenzo supermarket in the Chacao district of Caracas, jealously clasping a bag of beans and two cans of peas. It’s the third supermarket she had tried that day. “I have watched people hitting each other and shouting. If you find anything it’s three times more expensive than it used to be.” Ms Lorusso arrived in Venezuela 57 years ago from Bari in southern Italy. Now she is watching as her grandchildren go back to Italy. “The situation here is like it was when I left,” she explains, her lower lip trembling. “Please help us.”

“It’s like a post-war economy with hyper inflation, shortages, fixed prices and the country’s capacity to produce goods destroyed,” Amabilis Castillo, 27, a treasury products analyst for an international bank, explained. A possible default by Venezuela on its ever-expanding debt is also looming.

President Maduro, according to the most recent polls, has seen his support fall to a perilous 22 per cent. When he took to the airwaves a week ago to trumpet foiling one more conspiracy to topple him most observers rolled their eyes, including the US which dismissed as “ludricous” any notion it had played a part. Since becoming President, he has spoken of more than a dozen purported such plots. But this time he said an ex-general had been arrested and 10 other officers implicated. If the added flourish that jets were to bomb the palace was fantasy, his fears of a military mutiny may have had more foundation. Within hours Venezuela’s high command was on television reiterating its loyalty to the President.

The regime has just given the military permission to use lethal arms against protesters. Meanwhile, it has shown no inclination to listen to foreign calls for the release of Mr Lopez, who, were he free, could play a key role in parliamentary elections due as early as September. “[Maduro] knows he is weak, he knows that he has huge disapproval numbers and he is deploying as many police as he can to repress any protests because they could spell the end of his time in power,” says Mr Smolansky.

The crisis presents the opposition with its best opportunity yet to turn the page on the Chavez era and steer Venezuela back to a free-market democracy. The continued imprisonment of Mr Lopez may also be playing into their hands. “If I were Maduro I would release Lopez as soon as possible,” comments Professor Alvan. “Jail is good for Lopez, politically.” However, they still lack unity, with Mr Lopez and his supporters, including Mr Smolansky, emphasising street protests and people pressure to force Mr Maduro from office. Meanwhile the former candidate Mr Capriles, who is still a provincial governor, is urging caution, saying the first priority is to win the parliamentary elections later this year.

President Maduro’s best hope for survival in office may be a recovery of oil prices. His government is showing willing in the meantime to tackle some of the craziest parts of the Chavez legacy. It has started airing TV spots aimed at softening the population to some increase in petrol prices and has also raised the cost of public transport by about 40 per cent, even though it remains absurdly low.

Rumours persist that Mr Chavez died long before it was actually announced nearly two years ago and the body displayed was a dummy. But whether or not the chunk of marble touched by Ms Yomeiny contains the body of the late President matters far less than how much longer she and her neighbours remain patient with the economic depredations they are now facing. If the day comes when they too abandon President Maduro and turn against him, all bets will be off on what could happen to Venezuela.