Amid a Slump, a Crackdown for Venezuela

CARACAS, Venezuela — For a
glimpse into Venezuela’s
economic disarray, slip into a
travel agency here and book
a round-trip flight to
Maracaibo, on the other side
of the country, for just $16.
Need a book to read on the
plane? For those with hard
currency, a new copy of “50
Shades of Grey” goes for
$2.50. Forget your
toothpaste? A tube of Colgate
costs 7 cents.
Quite the bargain, right?
But for the majority of
Venezuelans who lack easy
access to dollars, such surreal
prices reflect a tremendous
currency devaluation and a
crumbling economy expected
to contract 7 percent this
year as oil income plunges
and price controls produce
acute shortages of items
including milk, detergent and
condoms.
“I’ve seen people die on the
operating table because we
didn’t have the basic tools for
surgeries,” said Valentina
Herrera, 35, a pediatrician at
a public hospital in Maracay,
a city near Caracas. She said
she planned to look for other
work because making ends
meet on her salary of 5,622
bolívars a month — $33 at a
new exchange rate unveiled
recently — was impossible.
Faced with tumbling
approval ratings as
Venezuelans reel from the
economic shock, President
Nicolás Maduro is
intensifying a crackdown on
his opponents, reflected in
last week’s arrest of Antonio
Ledezma, the mayor of
Caracas, and his indictment
on charges of conspiracy and
plotting an American-backed
coup.
Mr. Maduro, a protégé of
President Hugo Chávez, who
died in 2013, has adopted an
increasingly shrill tone
against critics of Venezuela’s
so-called Bolivarian
Revolution. As evidence
against Mr. Ledezma, Mr.
Maduro pointed to an open
letter this month calling for
“a national agreement for a
transition” that was signed by
Mr. Ledezma; Leopoldo
López, another opposition
figure who has been
imprisoned for the past year;
and María Corina Machado,
an opposition politician
charged in December with
plotting to assassinate Mr.
Maduro.
“In Venezuela we are
thwarting a coup supported
and promoted from the
north,” Mr. Maduro said over
the weekend on Twitter. “The
aggression of power from the
United States is total and on a
daily basis.”
Mr. Maduro is taking a page
from Mr. Chávez, who was
briefly ousted in a 2002 coup
with the Bush
administration’s tacit
approval, then made
attacking Washington and
locking up people suspected
of being putschists a fixture
of his government. But the
State Department has
disputed Mr. Maduro’s
claims, saying the United
States is not promoting
unrest in Venezuela.
At the same time, the move
by Mr. Maduro points to a
hardening in how opposition
figures here are treated.
Thirty-three of the 50
opposition mayors in the
country are now facing legal
action in connection with
antigovernment protests last
year that left 43 people dead,
according to Gerardo Blyde,
the mayor of Baruta, a
Caracas municipality.
One prominent opposition
mayor, Daniel Ceballos of the
city of San Cristóbal, has been
in jail for the past year, while
another, Enzo Scarano of the
industrial town of San Diego
in Carabobo State, was
transferred from jail to house
arrest last month because of
deteriorating health.
The arrest of Mr. Ledezma,
59, who was democratically
elected but had much of his
authority stripped away in
2009, has even some pro-
Chávez analysts questioning
the wisdom of Mr. Maduro’s
move. While Mr. Ledezma
joined a hardline faction of
the opposition last year
called “the Exit,” he was not
viewed as especially
prominent or influential.
“Fueling suspicion is a
distraction tactic from the
huge currency devaluation
we’ve had to withstand,” said
Nicmer Evans, a pro-Chávez
political consultant who is
among those on the left here
now openly criticizing Mr.
Maduro. “What’s not clear is
the proof of wrongdoing in
this case.”
With inflation soaring to a
rate of 68 percent, the
Venezuelan authorities are
seeking to manage the
economic crisis with a
complex web of three official
exchange rates. For instance,
some basic goods are
imported at rates of 6.3 and
12 bolívars to the dollar, but
a new floating rate of about
171 was introduced last week,
effectively reflecting a
devaluation of nearly 70
percent.
On the black market, which
some Venezuelans already
use to carry out basic
transactions, the rate is even
higher.
Even for some Chávez
loyalists, Mr. Maduro seems
to be in over his head in
dealing with the scramble for
hard currency. Jorge
Giordani, one of the late
president’s top economic
advisers, said this month that
Venezuela was emerging as
Latin America’s
“laughingstock,” citing
corruption and labyrinthine
bureaucracy as factors
accentuating the economic
quagmire.
“We need to acknowledge the
crisis, comrades,” said Mr.
Giordani, whom the
president ousted last year as
finance and planning
minister.
Indeed, some economists say
that the government’s
hesitance to overhaul its
perplexing currency controls
could intensify Venezuela’s
economic problems.
“The system is going
haywire,” said Francisco
Rodríguez, chief Andean
economist at Bank of America
Merrill Lynch, emphasizing
that galloping price increases
could soon enter the realm of
hyperinflation, accelerating
to triple digits this year and
to more than 1,000 percent in
2016 if policies are
maintained.
Mr. Maduro seems to
recognize that some
profound economic changes
are needed in Venezuela,
which commands the world’s
largest oil reserves, creating
the illusion of inexhaustible
wealth. He supports raising
the price of gasoline, which
costs less than 10 cents a
gallon at the strongest official
exchange rate; there is
considerable resistance to
such a shift even though the
fuel subsidy costs the
government more than $12
billion a year.
But ahead of congressional
elections this year in which
Mr. Maduro’s supporters
seem vulnerable, the
president is also seeking to
shore up his base.
Mr. Ledezma’s wife, Mitzy,
told Reuters on Sunday that
the president was showing
his dictatorial tendencies.
“He knows that every day
there are more opponents,”
she said.
Despite the widespread
complaints about hardship
and high levels of violent
crime, some here remain
loyal to Mr. Maduro out of
gratitude for a vast array of
social welfare programs.
“I’ll vote for Maduro until I
die,” said Marco Miraval, 77,
who sells coconuts in 23 de
Enero, a sprawling housing
complex that is a bastion for
pro-Chávez groups, pointing
to Mr. Maduro’s support of
subsidized university
education and health care.
He said Venezuela’s economic
problems were a result of
Washington’s pressure on the
government. “It’s because
they’re being sabotaged by
this economic war,” he said.
Still, while Venezuela’s
opposition remains divided
and hampered by the arrests
of some leading figures, Mr.
Maduro lacks the oratorical
skill of Mr. Chávez, who
skewered his opponents in
what often seemed like a
stream-of-consciousness
approach to governing that
kept many Venezuelans on
the edge of their seats.
“Maduro is trying to
consolidate his leadership
without having the charisma
to do so,” said Margarita
López Maya, a historian who
studies protest movements,
describing his latest moves as
amounting to “an excess of
authoritarianism.”
In the meantime, bizarre
prices persist for many basic
services, punishing those who
earn and save in bolívars
while benefiting an elite with
access to hard currency in
bank accounts abroad. For
instance, monthly broadband
service from the state
telecommunications
company costs less than the
equivalent of $1. The
monthly electricity bill for a
huge luxury apartment, with
air-conditioning on at all
hours, comes to less than $2.
Even that absurdly cheap
flight to Maracaibo is more
complicated than it appears
since some airlines have
trouble obtaining the dollars
they need to maintain their
planes.
“You’ll see things you’ll never
believe: half a dozen aircraft
from just one airline just
waiting on the ground
because they don’t have
parts,” said Nicolás Veloz, a
pilot based in Caracas.
For some Venezuelans who
are struggling to get by, the
economic disorder they see
explains the president’s
targeting of his opponents.
“Maduro is terrified, and so
he’s using more totalitarian
methods, putting politicians
in prison with so many
police,” said Eduardo de
Sousa, 28, a pharmaceutical
lab assistant. “They know that
the revolution is over, and
they’re scared.”