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Venezuela’s economic crisis dominates all as key vote approaches

McClatchy

Misael León still believes in Venezuela.

Standing in the muggy shade on his farm, the native of Medellín, Colombia, said he’s optimistic that someday, someone’s going to fix his adopted country.

León has had a bad run of it lately – the same run that’s brought this resource-rich nation to its knees.

He describes life as a fight for survival. He struggles to find food for his family. One of the first words out of his mouth is “escasez” – shortage – a reference to a nationwide lack of everything, from food to laundry soap to car parts.

León gets milk, eggs and some meat from the animals he raises on the northern edge of Venezuela’s agricultural region. But he has to buy basics such as rice, flour, pasta and sugar. Supplies of those items are scarce.

Rancher Misael Leon explains how he and his family scrape by. Leon believes the government should give farmers and other producers a reason to work.

“Anywhere you go in Venezuela, any city, any village, you’ll see a line to buy food,” he said. “And that’s not the worst part. Worse is that you stand in line, and when you get to the place where you make the purchase, the food is all gone.”

Eighteen days traveling across Venezuela last month, talking to people in all walks of life about their country, found León’s observation repeated dozens of times. Venezuela is in crisis, its economy shrinking, its oil wealth no longer generating the kind of money the country needs to import products, its farms and factories no longer producing enough to satisfy its citizens.

That, however, is where the agreement ends. The cause of the shortages remains a hotly debated topic that pits the country’s current socialist rulers against an opposition rooted in its business classes.

The conflict is expected to play out Sunday, when Venezuelans go to the polls to decide control of their National Assembly, a 167-member governing body that’s their version of Congress in the United States.

Shortages of food and other basic items will be one of the biggest issues on their minds.

León is one of many who blame the government for allowing things to get so bad. The people in power caused Venezuela’s drastic fall in production, he says. They confiscated farmland as well as private factories that produce staples like cement, iron and car batteries. Then they put people with no expertise in charge of those resources.

León describes a vicious cycle where even feed for animals is hard to come by. That has driven feed prices up, so León is forced to buy less and lower-quality food for his cows, which causes them to produce less milk. His income has dropped so much that he now feeds his hog scraps and food waste from a local restaurant. He drives a cab to supplement his income. He tries to hang on.

The Venezuelan government tries to hang on by rationing supplies, limiting how much and when customers can buy them. The last digit of a person’s government-issued ID determines which day of the week he or she can make purchases.

To buy diapers, parents must present their baby’s birth certificate, as well as their own IDs.

The idea is to stop people from hoarding supplies and selling them at several times the price on the black market. Grocery trafficking is a real thing in Venezuela.

The Marxist solution

Six years ago, a Venezuelan man hired León to run a ranch near San Juan de los Morros, a city of about 30,000 a few hours’ drive southwest of Caracas, the country’s capital. The ranch supported hundreds of cows and other livestock.

The government confiscated all but 100 acres several years ago, León said, and divided the ranch into smaller parcels. It awarded those parcels to people who had no idea how to farm, León said.

The new arrivals sold off the animals and anything else that came with the property, and then abandoned the land, León said. Today, only one or two still live on the property. León said he can’t work the land now because it doesn’t belong to him or the ranch’s original owner. So it sits empty.

Neither León nor the landowner could do anything about the expropriation, the result of the effort by the late President Hugo Chávez, who in many ways still rules Venezuela, though he died nearly three years ago, to break the grip Venezuela’s rich had on the country’s critical resources.

There’s a lot of people who say Venezuela has no future. I say yes, there is a future in Venezuela.

Misael León, farmer

Chávez often accused the Venezuelan “oligarchy” of idling their property in order to sabotage the economy and undermine his government. So the National Assembly passed laws that gave him authority to expropriate private property deemed idle or not being used appropriately. That power passed to Chávez’s handpicked successor, current President Nicolás Maduro, after Chávez died March 5, 2013.

The laws have been a flashpoint for growing bitterness between the well-off and the poor, the producers and the “pueblo.”

“They try to half-solve one problem with another problem,” León said.

Efforts to contact Venezuelan government officials for comment on this story were unsuccessful.

Surviving

Some 80 miles south of San Juan de los Morros on Highway 2 lies Calabozo, a dusty city next to a major reservoir in the heart of the Venezuelan plains.

Calabozo is the home of ranchers Rolando Sosa and his wife, Jeannette Montoya, who tell a story almost exactly like León’s.

But they don’t share León’s optimism for the future.

Rancher Rolando Sosa believes the government has crushed food production by seizing huge swaths of farmland giving it to people who don't know what they're doing.

Sosa and Montoya still seethe with anger at the government. In 2008, they said, a group of people they believe had the favor of the Chávez government made a claim against a small section of their land, saying it was idle.

Sosa and Montoya said they fought the claim, but that only resulted in the government confiscating all of their ranch, leaving them just the house and the fenced yard around it.

The people who were awarded the ranch let the land and livestock go to waste, Sosa said.

Finally, after six years of fighting, the government returned about 40 percent of the land to Sosa and Montoya, with restrictions on how they can use it. Animals were emaciated. They said part of the land had been burned, and equipment was broken.

Imagine paying $40 for a gallon of milk in the United States and you get an idea of how runaway food prices can strain a Venezuelan family budget.

They’ve restored order since then. Sosa maintains a small but healthy-looking herd of cattle. The grass appears decently irrigated. The yard and house are tidy and pleasant.

But it hasn’t been enough. Discouraged by their prospects, both of their sons followed the path of many young Venezuelans and moved out of their native country. Their daughter will move to the United States soon, they said.

The family’s breakup was the hardest pill to swallow.

“The human capital of a ranch and those who know best how to run a ranch are your children,” Sosa said. “There was no reason to do all the damage they caused us. Above all, the damage to our family. The human part, right?”

‘Economic war’

In Caracas, Lisandro Pérez pounded his desk with his left fist.

“The government must put these people in jail!” he shouted.

President Nicolas Maduro and his supporters blame Venezuela's business leaders for shortages of food and other necessities. They say businesses are raising prices and restricting supplies to sow dissatisfaction with the government.

Pérez was talking about Venezuela’s business leaders. He believes they’re breaking the Fair Price Law, a piece of legislation passed by the National Assembly that restricts sellers’ profit margins to 30 percent. As evidence, he cites seemingly overnight doubling or tripling of prices on things such as flour or cooking oil.

“They want a profit of 80, 90, 100, 150 percent without concern for the population,” he said. “In truth, they aren’t interested in the needs of the Venezuelan. The only thing that interests them, fundamentally, is their own profits.”

Pérez is principal at the José Gregorio Hernández elementary school in Caracas’ 23 de Enero neighborhood and a leading figure in the United Socialist Party of Venezuela, whose members control most of the country’s government. His office, a narrow, neutral-colored triangle just inside the school’s front door, is an homage to Chávez and the socialist revolution the late president started.

A 2014 calendar, topped with a photo of Chávez in a Caracas rainstorm at the last major political rally where he appeared, hangs on Pérez’s wall. The message on the photo is a popular rhyme around Venezuela these days: “Chávez vive. La patria sigue.” It doesn’t have quite the same ring in English: “Chávez lives. The fatherland continues.” A doll of Simón Bolívar, Venezuela’s principal founding father, sits on his desk.

Many of the businesspeople Pérez accuses of economic sabotage are members of Fedecamaras, a nationwide coalition of business leaders. Besides raising prices, Pérez said, Fedecamaras members have been hiding and exporting their products to stir up discontent with a government they hate and will do anything to remove.

This is what the Venezuelan government has dubbed “the economic war.” Never mind long lines; the prices of food and other necessities have risen so much that even people making decent wages can barely afford enough to survive.

With the shortages, prices of corn flour, for example, needed to make Venezuela’s essential food item, the arepa, often reach 200 bolívares for a one-kilogram package.

Converted to U.S. dollars, that’s less than 25 cents. But it’s 1 percent of the 20,000 bolívares – about $22.40 – considered a respectable monthly wage here. Imagine paying $40 for a gallon of milk in the United States and you get an idea of how runaway food prices can strain a budget. Beans, another Venezuelan staple, require even a bigger slice of income at 350 bolívares, or 39 cents, per kilo.

“Those are prices of violence. Those are prices that they set to foment violence in the country,” Pérez said. “The government must put them in prison. You put half the people at Fedecamaras in prison, and the economic war will end.”

Bad blood

The government has produced no evidence of a large-scale conspiracy to hide or otherwise limit supplies of essentials. But Fedecamaras has a long history of giving the government reason for mistrust.

On April 11, 2002, Venezuelan military leaders, some say with the help of the United States government, orchestrated a coup against Chávez, briefly removing him from power. Fedecamaras head Pedro Carmona took his place. Carmona immediately declared the constitution void, dissolved the National Assembly, dismissed the Supreme Court and appointed a cabinet of business leaders and other sympathizers.

The coup failed within a few days under protest from the public and military figures loyal to Chávez, as well as political leaders of other Latin American countries. Chávez returned to power. Carmona fled to Colombia.

Six months later, Fedecamaras, now under the guidance of Carlos Fernández, was behind a one-day nationwide strike that ground life in Venezuela to a halt but failed to achieve its declared objective: the resignation of Chávez.

Fedecamaras pushed another nationwide strike in December 2002. Again, the goal was to oust Chávez. This one lasted two months and cut deeply into the country’s critical oil production and exports, devastating the economy.

Again, Chávez’s government survived. Fernández was arrested on Chávez’s orders and charged with treason, rebellion and inciting criminal acts. A judge dropped the treason charge and placed Fernández under house arrest.

Santiago Guaramato, a doctor in the large city of Puerto Ordaz, agrees with Lisandro Pérez that Fedecamaras is at it again, working to undo the government of Maduro, Chávez’s successor.

Guaramato said he’s never seen Venezuela in such a bad state. His patients struggle to find medicines they need, and when they do find them, they’re prohibitively expensive.

“It’s not spontaneous,” he said. “This situation – the shortages, the prices grotesquely high . . . this is measured. This is studied. This is calibrated with a goal in mind.”

No peace in the valley

At 10,000 feet above sea level, Mucuchies feels a world away from the turbulence that’s making Venezuela feel like a country at war.

The city of about 6,000 is built on a steep, green mountainside some 400 miles southwest of Caracas.

It’s quiet here. Instead of a steady rumble of cars, trucks and motorcycles, you hear wind in the mountains and birds chirping. The air is crisp and breezy – a contrast to the stagnant heat in the plains just 50 miles to the east but more than 9,000 feet below.

It’s easy to imagine – wrongly – that the problems plaguing Venezuela haven’t taken hold here.

The farmers in Mucuchies struggle with the same skyrocketing costs of production and roller coaster profits. The government distributes seed, fertilizer and other products to farmers at controlled prices, but many can’t get enough. They buy black market and imported products to fill in the gaps. But those products keep getting more expensive because Venezuelans buy them with their country’s currency, the bolívar, whose value has plummeted relative to the U.S. dollar.

José Castillo, one of many who rotates garlic, potatoes, carrots and broccoli on the slopes around Mucuchies, said the government lets him buy enough chemicals for 50 of his 1,000 acres. The rest he buys on the black market – at 10 times the cost.

Security is another issue, even in the quiet of the mountains. Yhovany Quintero, another Mucuchies farmer, said he slept in a tent next to his garlic field for 22 nights in September to protect it from thieves who’ve been known to poach crops approaching maturity.

Food for life

Will Sunday’s election make a difference? Sosa and Montoya say no. No matter what voters want, they believe the ruling United Socialist Party of Venezuela will rig the results so its candidates stay in power.

León disagrees. He thinks Venezuelans are so frustrated that there’s no way the socialists can keep control of the government.

“There’s a lot of people who say Venezuela has no future. I say yes, there is a future in Venezuela,” León said. “Why? How? Give confidence to the producer. Incentivize them so that they produce. . . . What can the government do so that people work? Here’s what I say: Don’t give them food. Teach them to produce it.”

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