Last Thursday, an annual Venezuelan ritual took place.
Venezuelans of every social class and all sides of the political spectrum sat down to watch and comment on the Miss Venezuela, the country's
national beauty pageant. As a Venezuelan expatriate, I find it hard to take the
whole thing seriously. As an analyst, though, I have to find a way to explain
Putting the obvious, snarky comments aside ("We Venezuelans
are vain and sexist" would be the knee-jerk explanation), it's worth pointing
out that the pageant is one of the few remaining places where Venezuelans can
watch honest competition and hard work play themselves out. Beauty queens go
through months of rigorous training, and in the end the competition is deemed
fair, with the outcome based (mostly) on merit alone.
This is a rare occurrence in revolutionary Venezuela, since
chavismo has done its best to extinguish Venezuelans' work ethic.
The notion of work ethic -- grossly defined as the idea
that, on average, the harder you work and the more productive you become, the
further you will go -- is a hard sell in Venezuela. In a country where taxes literally spout from the ground, and where generous public
spending allows for goods like gasoline to be practically free, there
is little incentive to be productive. This may reflect what academics term
the "natural resource curse."
Chavismo took this shortcoming and exacerbated it. Its
policies and laws view competing on merit as a "bourgeois," capitalist idea, contrary
to the Twenty-First-Century Socialism it espouses.
Take, for example, the nation's banking sector. Venezuelan
banks have few branches, and most customers usually have to wait for hours for
the simplest of transactions.
Before Chávez came to power, Venezuelan banks competed for
their customers. Now, the government sets everything. It fixes the interest rates they
charge. It decides how to allocate their loan portfolio
by forcing banks to loan
X percent of their deposits to Y industry. It forces banks to act as middlemen
for its bizarre foreign exchange policies, and it sets the guidelines through which banks must comply
with all of these aspects.
The end result is that banks simply have no incentive to
compete. The only time they do "compete" is when the government decides who
gets to purchase government bonds. Even then, "competition" is just a byword
for "political lobbying," as the allocation of bonds is not done via an auction
but, rather, assigned discreetly to banks whose owners are on good terms
with the governing clique.
When it comes to the military, the situation is similar.
Before Chávez, military promotions were decided on a fixed set of criteria --
courses taken, awards obtained, etc. Of course the process was politicized, but
it was not unheard of for non-political military men to ascend to the top of
After Chávez centralized all decisions on military promotions
in the office of the president, all of this changed. Merit-based competition
inside the military has completely disappeared. Instead, the president promotes
the people who show the most loyalty to him, his party,
and his policies.
Venezuela's labor regulations are a
prime example of how the government has declared war on hard work. Instead of
rewarding productivity, it forbids companies from firing inefficient workers.
It also sets limits on overtime. The end result is that private companies
frequently complain that their workers simply do not show up for work -- and
they can't do anything about it.
There isn't an industry or sector in Venezuela that isn't
hampered by overbearing government regulations, whether they are price
controls, labor rigidities (as outlined above), or foreign-exchange
restrictions. The result is a society that expends most of its energy on
schemes for getting rich quick.
Venezuelans waste countless hours looking to take advantage
of the opportunities in the country's dual exchange-rate system. By traveling
overseas, they can access cheap dollars they can then sell at seven times their
value in the black market. This practice, colloquially known as the "raspaíto,"
has become one of the main growth industries in Venezuela. Everyone, from the
country's millions of informal street vendors to the businessmen making billions
off juicy government contracts to provide electrical plants, seems to be
exploiting opportunities to seek arbitrage that have flourished under the
Venezuelans are not lazy. People there work very hard, as
witnessed by the massive traffic jams one encounters in Caracas at six in the
morning. But it seems their hard work is not geared towards being productive,
but to dealing with, and trying to take advantage of, the country's socialist
policies. This means the link between hard work and reward is broken.
This week, President Nicolás Maduro asked for special powers to "fight
corruption." It's ironic, given how the corruption of Venezuelans' values is
part of his movement's legacy.
Juan Nagel is the Venezuela
blogger for Transitions, co-editor of Caracas
Chronicles, and author of Blogging
the Revolution. Read the rest of his posts here.
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