Mike Shelton Returns to Venezuela – 27 Years after Leaving Peace Corps
Mike Shelton Returns – 27 Years after Leaving Peace Corps
I had the pleasure of returning to Venezuela last month, 27 years after finishing a three-year tour as a Peace Corps Volunteer. In the intervening years I have lived in Guatemala, Zaire, Pakistan, Mexico and Bolivia as a Foreign Service Officer stationed at our embassies in those countries. All of those countries were fascinating, colorful, even enjoyable (except Zaire) but none of them seemed as comfortable and happy as Venezuela had seemed to me from 1969 to 1972. So when I learned that I had to attend a meeting in Caracas on October 25, I quickly blocked out the rest of the week for some vacation time in order to visit my second Peace Corps site, the town of La Grita in the Andes. What follows are some observations about the country, the people, the state of the economy and the political situation.
Venezuela is in an economic recession right now. Economic output for the first half of 1999 was 9% less than for the first half of 1998, primarily due to the fall of oil prices but also due to political uncertainties which have slowed investment to a trickle. With oil prices rebounding, GDP for the year may only be 5% less than in 1998 but unemployment is still a staggering 15% officially and maybe 20% in reality.
You certainly could not tell that Venezuela was in a recession by looking at the traffic. Car traffic has choked Caracas worse than ever now that freeways cross the valley dropping thousands of cars into crowded, narrow streets where parking is as scarce as hen’s teeth. Gasoline is still cheaper in Venezuela than in any other country in the world with a liter of premium gasoline selling for less than 13 cents which means a gallon costs only 48 cents. Private firms are now allowed to sell gasoline but the prices are still controlled by the government so the service stations compete for the customer’s purchases of food, lottery tickets and car trinkets. Unleaded gasoline is available but few cars purchase that slightly more expensive fuel. Starting in 2000, the government will require that all new cars take only unleaded fuel.
The abundance of oil continues to be Venezuela’s curse and blessing. Oil exports still account for over half of the country’s export earnings and 70% of the government’s revenue. There are three problems with this dependency on oil. First, the economy is subject to bust and boom cycles with the world price of oil. Second, the exchange rate is distorted by the abundance of dollars coming in from oil exports. Third, all the revenue from oil creates opportunities for corruption and robs people of incentive to work for their own income.
It seems crazy to think the bolivar is overvalued because the currency collapsed in the 1990’s. When I was a volunteer there, and for many years afterwards, the exchange rate was 4.3 bolivares to the dollar. Now it is 632 bolivares to the dollar. Nonetheless, a Big Mac hamburger in Caracas costs 1,900 bolivares, over three dollars, considerably more than in the U.S. In other words, inflation has risen faster than the currency has fallen. People have adjusted to the shrunken value of the currency by carrying around huge wads of bills. The largest value bill available in most banks is only 5,000 Bs, less than $8.00. One of the most intriguing exhibits at the handsome museum of fine arts in Caracas is something that looks like a large quilt hanging on the wall from a distance. Up close you discover that it is bundles of 10 and 20 bolivar notes tied together. Its title: “So much and yet so little”
After the meeting in Caracas, we flew to Merida in a Boeing 737. The plane has to squeeze down into the valley, through the clouds and land at the very beginning short runway in order to stop before the asphalt terminates. In order for the planes to slow in time, the runway is sloped rather steeply, especially the last third. The sloped runway also helps the planes take off more quickly. I was pleased discover a four new, private airlines flying to Merida.
Downtown Merida had hardly changed with its narrow streets, handsome plazas and storefronts right on the street. But behind the storefronts were some changes. One of the old houses had been converted into a handsome cybercafe. Dozens of students from the University of the Andes clustered around the computers every evening surfing the internet.
Surrounding the old city, Merida now has miles of handsome suburbs. Most of the areas we saw were clearly built as subdivisions with scores of similar two story white houses with red tile roofs and small grass yards. We stopped to look for a highway map at a modern, strip mall complete with grocery store and drug stores.
We rented an under-powered Fiat with stick shift at a great price, 93,000 Bs for three days, unlimited mileage. Then we headed south through the Andes for La Grita. The map promised me a paved road but I could not remember any such road from my Peace Corps days. Initially, we dropped lower and drove through lush, green valleys, following streams and taking pictures. Then the road started climbing. We kept asking people along the way and they assured us we could get to La Grita. As the road climbed we went past well-tended fields of potatoes, carrots, cabbage, corn and lettuce. Dairy cows and oxen watched us climb the switchbacks. The sun gave way to clouds and pretty soon we were driving up into the cloud. Just when the fog got really thick, the road narrowed and the white line disappeared. Then it started raining. We inched along with only 15 feet of visibility until finally the road started sloping downward. Eventually the road widened again and we dropped below the clouds in time to watch the sun set.
As I drove into La Grita, I realized we had been driving down the valley where I used to work. In 1971, I used to ride my motorcycle up the valley from La Grita on what was then a dirt road. The next day we drove back up that valley and I found two of the rural schools where I had taught sports and gardening. The schools had been rebuilt and the villages were certainly more prosperous. One reason for the prosperity was a new Frito Lay factory in La Grita that bought up all the potatoes that the farmers could produce. The factory produces potato chips that are exported throughout the Andes, all the way down to Chile.
La Grita had doubled in size and the tin-roofed, cinder-block slum where I used to live had been converted into two or three story middle class houses. We stayed in a modest motel that had cable TV wired into each room. I was able to watch the Yankees win the World Series live! After the game I wandered around the quiet, steep streets looking for familiar spots. Young kids stood in the corners and sat in the plazas, flirting and joking.
The newspapers each day carried full and startling accounts of the National Constituent Assembly struggling to write a new constitution. While we were there, they debated a “right to life” article with the Catholic Church pushing for the article to apply from the moment of conception through old age, which raised questions about abortion and euthanasia. One clause approved tentatively would require the news media to report only truthful information. This raised a cry of protest from the editors who pointed out that they reported what people said and often could not verify if that was true.
Every chance I could I asked Venezuelans what they thought about their new President, Hugo Chavez, and his determination to get a new constitution approved. Most of them approved of Chavez and have high hopes that he will end corruption and turn the economy around. According to the polls, Chavez still has an 80% approval rating. At the same time, many people were cynical about the new constitution. They said it would be very similar to the 1961 constitution except that it will allow extend the presidential term to six years and allow the president to be re-elected once. This means Chavez could stay in office 12 years, they pointed out, or even longer if he says the 1990 election under the old constitution does not count, the say way that Fujimori is justifying his campaign for a third term as president of Peru.
I heard Chavez give a speech at the Organization of American States in Washington. He spoke clearly, compassionately, in simple sentences without notes or script. He asserted he had followed democratic practices so far and he would continue to do so by putting the draft constitution up for approval with a referendum. He is handsome, confident, extremely energetic and obviously charismatic. He referred to his attempted coup in 1992 as a “bold gesture” to change a moribund, corrupt, non-democratic government.
The amazing thing is that Venezuela is still democratic considering the economic and political turmoil during this past decade. There were two coup attempts, the traditional political parties, COPEI and AD, have become totally discredited and the currency collapsed. After 40 years of civilian, democratic government (and some outside pressure) Venezuela can be expected to maintain a semblance of democracy but one has to wonder what will happen when the Chavez administration fails to fulfill the enormous expectations it has raised.
Mike Shelton, November 1999
