Venezuela’s implosion isn’t simply the case of a Latin American basket case doing the things that basket cases do. For much of the 20th century, Venezuela was the poster child for the successful South American republic: democratic when its neighbors were despotic, prosperous when its neighbors were poor, and stable all through the vagaries of the Cold War. Venezuela carved out a niche as the country that the U.S. State Department could highlight to make its case that democracy could work in Latin America.
That a nation once as prosperous as Venezuela could regress to this dystopian state is the first and most sobering lesson of the Venezuelan experience—proof that development gains aren’t permanent. Mismanage an economy badly enough, and the progress achieved in a generation evaporates dizzyingly fast.
Another lesson is that bad government can be as destructive as a great physical calamity. The scale of Venezuela’s implosion would suggest that the country had endured a war or a string of ghastly natural disasters. No such affliction came to Venezuela. Rather, it turns out that a country can endure wartime levels of destruction without a war—stemming from no force more destructive than the terrible policy decisions of its own government.
Moisés Naim
A cautionary tale for people who blindly assume progress is a one-way street, from poor to wealthy, from autocracy to democracy, from war to peace. There are similar signs of decay in many countries around the world: rampant inflation in Turkey, fueled by Erdoğan’s obstinance to impose his own economic policies; erosion of democratic institutions in Hungary and Poland, despite being members of the European Union; money laundering and tax evasion in London and US states from Wyoming to South Dakota. But in Venezuela, unfortunately, all these factors acted in unison to the country’s ruin.
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