The political and economic climate in Venezuela has become increasingly hostile for entrepreneurs and the private sector since 1998, when Hugo Chávez became president and ushered in his “Bolivarian Revolution” — a series of sweeping economic and political changes aimed at helping the poor which instead led to high inflation, shortages of basic goods, and the growth of a large informal sector.
Moreover, Chávez frequently accused the private sector of conspiring with the CIA, the domestic opposition, the Colombian government, and other actors to topple his presidency and the Bolivarian Revolution. The resulting social and political cleavages among Venezuelans have become so strong that political disagreements have even created bitter feuds among family members.
Since 2013, CIPE has been working with the Federation of Chambers of Commerce and Production (FEDECAMARAS) to strengthen the capacity of local entrepreneurs and promote the values of democracy and free market initiative in Venezuela. FEDECAMARAS is a private, non-profit civil association with over 250 business association members encompassing 13 business sectors and 23 regional state chambers. Despite the hostile political and economic climate that took root under Chávez and has persisted under his successor Nicolás Maduro, FEDECAMARAS has worked tirelessly to strengthen the Venezuelan business climate through the principles of economic freedom and democracy. Continue reading
By Gustavo Guerrero and Laura Boyette
The economic and political climate in Venezuela today has grown to crisis levels as the government consolidates power and limits the freedoms of entrepreneurs and the private sector through harmful legislation and the nationalization of private businesses. In the face of these challenges, the Federation of Chambers and Associations of Commerce and Production (FEDECAMARAS) continues working hard to advocate for policies that will grow the Venezuelan economy and provide more opportunities to young entrepreneurs, both of which are essential to creating a brighter future for Venezuela. In May Jorge Roig, President of FEDECAMARAS, sat down for an interview with CIPE and discussed the role of the private sector and its advocates in Venezuela.
Roig stressed the importance of cooperation between business, society, and government, saying that without engaging these groups in dialogue, substantive change will not occur. In recent years, the Chávez and Maduro governments have depicted the private sector and organizations such as FEDECAMARAS as the source of Venezuela’s economic problems, claiming they have political aspirations. However, Roig defined the role of FEDECAMARAS very clearly – not to be a political power, but rather to influence it on behalf of entrepreneurs. Furthermore, organizations such as FEDECAMARAS not only protect free enterprise, but also support democratic values and act in the best interests of the society as a whole. Continue reading
To anyone who has traveled frequently to Venezuela, the deterioration of the country is palpable. By day, people fear driving and getting stuck in traffic because motorcycle thugs will tap on their window, show a gun, and demand the handover of cell phones and cash. By night it is worse: going out on the town could involve robbery, kidnapping, and risk of death, so the streets are empty on Friday and Saturday nights in a city that previously boasted an active nightlife.
Shopping is another sad tale — commercial malls show a lack of maintenance, and stores have little merchandise. The common refrain you hear everywhere is “no hay,” or “there aren’t any.” You hear that when asking for anything from cell phones to toilet paper. You hear it in restaurants, too, where chefs somehow manage to figure out how to cook without basic staples such as cooking oil or flour.
If you can even get an airline ticket to Venezuela—international carriers are prevented from taking their profits out of the country, so they are curtailing flights—you will find prices depend entirely on the exchange rate you are able to obtain. If you change money at official rates you will pay $25 for a sandwich and a cup of coffee. If you are lucky enough to obtain the parallel exchange rate—which is running upwards of 10 ten times the official rate—the same meal will cost you $2.50.
How do Venezuelans cope with living this way? There are significant segments of society that still support the government of Nicolás Maduro despite its inability or unwillingness to tackle the huge economic problems the country faces, and which they have mostly caused. As the economy worsens, however, it seems unlikely that even the poorest segments of Venezuelan society who supported Hugo Chavez and now Maduro will continue to provide that support. Continue reading
Recent developments concerning property rights violations and popular riots in Venezuela remind us that democratic and economic development is not always a gradual forward-looking process but instead is characterized by periods of progress as well as setbacks. Separation of powers, property rights, the rule of law, the respect of human rights and the rights of minorities are essential components of a functioning democratic and free market system.
Reflecting on the challenging situation in Venezuela and the business community’s experience of threats to private property rights, Jorge Roig, President of the Venezuelan Federation of Chambers of Commerce FEDECAMARAS, was invited by the Free Enterprise and Democracy Network to share his views in the latest Economic Reform Feature Service article. Continue reading
Youth taking part in anti-government protests. Photo: Reuters
CIPE’s partner CEDICE Libertad joins many other organizations in Venezuela and throughout the world in denouncing the Venezuelan government’s violations against human rights, extending from individual freedoms all the way to citizens’ property rights.
In the past, CEDICE warned in much of its analysis that a crisis might be inevitable if the country continued to implement its radical economic policies. CEDICE mentioned this in the following cost-benefit analyses: utility of popular power laws, the limitations of government profits and the government’s true incentives, public policies pertaining to the education sector, and the law project for territory management in Spanish, which clearly foreshadow the current situation.
On February 17, CEDICE published a press release denouncing the Venezuelan government’s violations of human rights and individual freedoms. Below you can find the English version of this document.