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How	
  we	
  lost	
  democracy:	
  Lessons	
  from	
  Venezuela	
  
By	
  Miguel	
  Angel	
  Santos	
  
	
  
This	
  speech	
  was	
  originally	
  delivered	
  at	
  the	
  firm	
  Kim	
  
and	
  Chang	
  in	
  Seoul,	
  South	
  Korea,	
  on	
  July	
  2014.	
  
	
  
I	
  come	
  from	
  a	
  family	
  of	
  immigrants.	
  My	
  father	
  was	
  born	
  in	
  rural	
  Galicia,	
  Spain,	
  in	
  
1933;	
   he	
   spent	
   most	
   of	
   his	
   childhood	
   and	
   adolescent	
   years	
   under	
   an	
   iron-­‐‑fist	
  
dictatorship,	
  a	
  country	
  marred	
  by	
  economic	
  hardship	
  in	
  the	
  aftermath	
  of	
  a	
  bloody	
  civil	
  
war.	
  His	
  mother	
  died	
  when	
  he	
  was	
  twelve.	
  He	
  managed	
  to	
  graduate	
  from	
  high	
  school	
  
and	
  was	
  among	
  the	
  few	
  accepted	
  into	
  the	
  University	
  of	
  Santiago	
  de	
  Compostela,	
  one	
  of	
  
only	
  four	
  universities	
  existing	
  in	
  Spain	
  at	
  the	
  time.	
  But	
  neither	
  he	
  nor	
  my	
  grandfather	
  
had	
  enough	
  money	
  to	
  pay	
  for	
  his	
  living	
  expenses	
  in	
  Santiago.	
  
	
  
Hence,	
  when	
  he	
  turned	
  seventeen,	
  my	
  father	
  decided	
  to	
  follow	
  the	
  footsteps	
  of	
  his	
  
brothers,	
   who	
   had	
   previously	
   sought	
   their	
   fortunes	
   outside	
   of	
   Franco’s	
   Spain.	
   He	
  
borrowed	
  from	
  an	
  elderly	
  aunt	
  in	
  order	
  to	
  buy	
  his	
  ticket	
  and	
  boarded	
  the	
  Julio	
  Cesar,	
  a	
  
transatlantic	
  voyage	
  to	
  Montevideo.	
  	
  From	
  Uruguay	
  he	
  bounced	
  to	
  Argentina,	
  where	
  he	
  
was	
  kicked	
  away	
  by	
  General	
  Peron	
  back	
  to	
  Uruguay,	
  before	
  finally	
  landing	
  in	
  Venezuela	
  
in	
   1958.	
   His	
   arrival	
   would	
   coincide	
   with	
   the	
   overthrowing	
   of	
   a	
   cruel	
   military	
  
dictatorship	
  and	
  the	
  beginning	
  of	
  a	
  political	
  system	
  that	
  would	
  be	
  considered	
  a	
  poster	
  
child	
   of	
   democracy,	
   human	
   rights,	
   and	
   economic	
   progress	
   for	
   the	
   following	
   twenty	
  
years.	
  
	
  
In	
  Caracas,	
  my	
  father	
  met	
  and	
  almost	
  immediately	
  married	
  my	
  mother,	
  who	
  had	
  
made	
   her	
   way	
   from	
   Morocco,	
   where	
   she	
   had	
   been	
   born	
   during	
   the	
   period	
   of	
   the	
  
Spanish	
  Protectorate.	
  They	
  both	
  worked	
  very	
  hard	
  to	
  raise	
  their	
  four	
  children	
  in	
  much	
  
better	
  conditions	
  than	
  those	
  of	
  their	
  own	
  childhoods.	
  
	
  
I	
  treasure	
  early	
  memories	
  from	
  our	
  visits	
  to	
  my	
  father’s	
  brothers,	
  my	
  uncles,	
  who	
  
had	
  settled	
  in	
  Argentina	
  and	
  Brazil,	
  countries	
  then	
  shattered	
  by	
  military	
  dictatorships	
  
and	
  hyperinflation.	
  My	
  father	
  considered	
  himself	
  lucky	
  for	
  having	
  settled	
  in	
  Venezuela,	
  
a	
  place	
  –	
  he	
  kept	
  on	
  repeating	
  –	
  “with	
  a	
  stable	
  currency,	
  a	
  rampant	
  economy,	
  where	
  
you	
   can	
   achieve	
   anything	
   you	
   want	
   with	
   hard	
   work	
   and	
   determination.”	
   I	
   still	
  
remember	
   the	
   soft	
   tone	
   of	
   his	
   voice,	
   his	
   repeating	
   the	
   syllables	
   distinctively	
   to	
  
emphasize	
  his	
  points,	
  and	
  the	
  spark	
  in	
  his	
  blue	
  eyes	
  when	
  he	
  referred	
  to	
  Venezuela.	
  
	
  
As	
  a	
  child,	
  I	
  remember	
  being	
  puzzled	
  by	
  his	
  remarks:	
  I	
  thought	
  that	
  it	
  was	
  axiomatic	
  
in	
  every	
  place	
  in	
  the	
  world	
  that	
  thriving	
  in	
  life	
  was	
  just	
  a	
  matter	
  of	
  hard	
  work.	
  The	
  
years	
  ahead	
  would	
  only	
  prove	
  how	
  wrong	
  I	
  was,	
  but	
  I	
  am	
  getting	
  ahead	
  of	
  myself.	
  
	
  
Back	
  then	
  Venezuela	
  was	
  experiencing	
  the	
  most	
  spectacular	
  economic	
  growth	
  of	
  
any	
  country	
  between	
  1950	
  and	
  1977:	
  Income	
  per	
  capita	
  grew	
  at	
  a	
  rate	
  of	
  2.9%	
  a	
  year	
  
for	
  a	
  grand	
  total	
  of	
  111%.	
  
	
  
As	
  he	
  had	
  been	
  deprived	
  from	
  the	
  opportunity	
  to	
  attend	
  university,	
  nothing	
  made	
  
my	
   father	
   prouder	
   and	
   happier	
   than	
   attending	
   his	
   children´s	
   commencement	
   and	
  
graduation	
  ceremonies.	
  But	
  by	
  the	
  time	
  I	
  finished	
  my	
  graduate	
  studies	
  the	
  country	
  was	
  
already	
  in	
  free	
  fall.	
  
	
  
In	
  the	
  twenty	
  years	
  spanning	
  from	
  1978	
  to	
  1998,	
  income	
  per	
  capita	
  fell	
  sharply,	
  
losing	
   25%	
   of	
   its	
   1977	
   peak	
   level.	
   Once	
   one	
   of	
   the	
   world’s	
   greatest	
   success	
   stories	
  
turned	
  into	
  one	
  of	
  the	
  most	
  spectacular	
  growth	
  failures.	
  We,	
  the	
  privileged	
  ones,	
  lucky	
  
enough	
   to	
   have	
   hardworking	
   parents	
   who	
   cared	
   about	
   our	
   education	
   and	
   invested	
  
heavily	
   in	
   us,	
   barely	
   noticed	
   the	
   steep	
   decline.	
   As	
   it	
   tends	
   to	
   happen,	
   the	
   loss	
   was	
  
unevenly	
  distributed	
  across	
  social	
  strata.	
  	
  
	
  
Oblivious	
   to	
   the	
   social	
   pressure	
   pot	
   that	
   was	
   mounting,	
   I	
   decided	
   to	
   follow	
   the	
  
advice	
  of	
  my	
  parents	
  and	
  went	
  to	
  work	
  in	
  the	
  private	
  sector.	
  “You	
  will	
  have	
  stability,	
  
they	
  will	
  pay	
  better;	
  you	
  will	
  be	
  able	
  to	
  raise	
  a	
  family”.	
  They	
  were	
  prescribing	
  the	
  same	
  
recipe	
  they	
  have	
  followed;	
  unaware	
  of	
  the	
  fact	
  that	
  the	
  underlying	
  social,	
  political	
  and	
  
economic	
  conditions	
  were	
  changing	
  dramatically.	
  We	
  received	
  many	
  warning	
  signals,	
  
but	
  decided	
  to	
  ignore	
  them.	
  
	
  
We	
  chose	
  to	
  ignore	
  the	
  massive	
  riots	
  of	
  1989	
  and	
  the	
  two	
  failed	
  coups	
  staged	
  by	
  
Hugo	
  Chavez	
  in	
  1992.	
  In	
  spite	
  of	
  the	
  fact	
  that	
  all	
  these	
  events	
  had	
  massive	
  approval	
  
amongst	
   the	
   population	
   at	
   large,	
   once	
   they	
   were	
   somehow	
   suffocated,	
   we	
   went	
   on	
  
living	
  our	
  lives	
  as	
  usual.	
  
	
  
Without	
  realizing	
  it,	
  I	
  was	
  following	
  the	
  path	
  so	
  many	
  of	
  my	
  comrades	
  had	
  taken.	
  
We	
   considered	
   ourselves	
   too	
   good	
   to	
   be	
   involved	
   in	
   politics.	
   By	
   a	
   singular	
   mix	
   of	
  
ignorance,	
   self-­‐‑indulgence	
   and	
   arrogance,	
   we	
   inadvertently	
   decided	
   to	
   punish	
   the	
  
representatives	
  of	
  our	
  rotten	
  political	
  system	
  by	
  walking	
  away	
  from	
  politics	
  and	
  policy.	
  
We	
  did	
  not	
  see	
  at	
  the	
  time	
  that	
  by	
  doing	
  so	
  we	
  were	
  sawing	
  the	
  floor	
  where	
  we	
  had	
  
been	
  standing.	
  
	
  
We	
  did	
  not	
  realized	
  back	
  then	
  that	
  we	
  had	
  been	
  living	
  in	
  a	
  bubble,	
  as	
  an	
  affluent	
  
minority	
   that	
   reaped	
   the	
   benefits	
   of	
   oil	
   rents	
   and	
   haphazardly	
   coexisted	
   with	
   a	
  
majority	
  largely	
  deprived	
  of	
  all	
  benefits	
  of	
  modern	
  life.	
  A	
  large	
  banking	
  crisis	
  in	
  1994-­‐‑
1996,	
  ill-­‐‑handled	
  by	
  our	
  old	
  political	
  establishment,	
  and	
  the	
  ensuing	
  victory	
  of	
  Hugo	
  
Chavez	
  in	
  the	
  presidential	
  elections	
  of	
  1998,	
  shattered	
  our	
  reality	
  and	
  awoke	
  us	
  to	
  the	
  
nightmare	
  of	
  autocracy	
  and	
  socialism.	
  
	
  
Chavez	
   seized	
   the	
   political	
   momentum	
   and	
   passed	
   a	
   new	
   Constitution	
   extending	
  
the	
   presidential	
   term	
   to	
   six	
   years	
   and	
   allowing	
   for	
   immediate	
   reelection.	
   The	
   new	
  
Constitution	
   eliminated	
   the	
   public	
   financing	
   of	
   political	
   parties,	
   a	
   change	
   nearly	
  
imperceptible	
  to	
  us	
  at	
  the	
  time,	
  which	
  in	
  fact	
  reduced	
  the	
  room	
  of	
  maneuver	
  of	
  the	
  
opposition	
   dramatically.	
   He	
   then	
   proceeded	
   to	
   call	
   nationwide	
   elections	
   to	
   “re-­‐‑
legitimize”	
   all	
   powers,	
   winning	
   a	
   large	
   majority	
   at	
   all	
   levels,	
   presidency,	
   state	
  
governors,	
  majors,	
  and	
  representatives	
  in	
  the	
  National	
  Assembly.	
  Having	
  conquered	
  all	
  
executive	
   and	
   legislative	
   powers,	
   Chavez	
   moved	
   on	
   to	
   control	
   the	
   judiciary	
   and	
  
electoral	
  council.	
  
	
  
By	
  the	
  time	
  we	
  woke	
  up	
  and	
  reacted,	
  well	
  into	
  the	
  new	
  millennium,	
  it	
  was	
  all	
  too	
  
late.	
  To	
  make	
  things	
  worse,	
  a	
  large	
  and	
  sustained	
  boom	
  in	
  oil	
  prices	
  ensued,	
  allowing	
  
the	
  government	
  to	
  progressively	
  eliminate	
  the	
  private	
  sector,	
  either	
  by	
  bankruptcy	
  or	
  
plain	
  expropriation,	
  without	
  having	
  much	
  impact	
  on	
  consumption.	
  Over	
  the	
  next	
  years,	
  
we	
  saw	
  all	
  of	
  our	
  democratic	
  freedoms	
  and	
  civil	
  liberties	
  vanish	
  gradually	
  in	
  front	
  of	
  
our	
   eyes.	
   All	
   private	
   TV	
   stations	
   and	
   most	
   of	
   the	
   newspapers	
   where	
   shut	
   down,	
  
expropriated,	
   or	
   appropriated	
   by	
   a	
   corrupt	
   elite	
   who	
   made	
   overnight	
   fortunes	
   in	
  
exchange	
   for	
   surrendering	
   the	
   news	
   and	
   broadcasting	
   to	
   government	
   propaganda.	
  
Private	
  property	
  was	
  undermined,	
  thousands	
  of	
  production	
  units	
  and	
  land	
  plots	
  were	
  
expropriated,	
   invaded,	
   and	
   harassed	
   with	
   impunity.	
   Many	
   opposition	
   leaders	
   were	
  
prosecuted	
  and	
  jailed,	
  or	
  expelled	
  from	
  the	
  country	
  into	
  exile.	
  The	
  socialist	
  government	
  
imported	
  guns	
  and	
  massively	
  distributed	
  them	
  among	
  the	
  population,	
  in	
  an	
  effort	
  to	
  
create	
   local	
   militias	
   that	
   could	
   protect	
   them	
   in	
   the	
   event	
   of	
   a	
   coup	
   or	
   rebellion.	
  
Eventually,	
   they	
   lost	
   grip	
   on	
   these	
   thugs	
   and	
   Venezuela	
   became	
   one	
   of	
   the	
   most	
  
dangerous	
   countries	
   in	
   the	
   world.	
   According	
   to	
   official	
   figures	
   more	
   than	
   120,000	
  
homicides	
  have	
  been	
  registered	
  over	
  the	
  fifteen	
  years	
  since	
  Chavez	
  became	
  president	
  
for	
  the	
  first	
  time;	
  24,000	
  alone	
  in	
  2013.	
  
	
  
Political	
   parties	
   were	
   not	
   banned,	
   but	
   were	
   rather	
   nullified.	
   Private	
   donations	
  
decreased	
  sharply	
  as	
  the	
  industrial	
  apparatus	
  went	
  into	
  bankruptcy,	
  was	
  expropriated,	
  
or	
   switched	
   hands	
   to	
   the	
   government	
   new,	
   government-­‐‑sponsored,	
   business	
   elite.	
  
Political	
   parties,	
   activists	
   and	
   non-­‐‑governmental	
   organizations	
   receiving	
   funds	
   from	
  
abroad	
  were	
  prosecuted	
  on	
  the	
  grounds	
  of	
  treason.	
  Without	
  public	
  financing	
  and	
  no	
  
media,	
  the	
  voices	
  and	
  impact	
  of	
  the	
  political	
  opposition	
  were	
  reduced	
  to	
  a	
  minimum.	
  
	
  
More	
   than	
   ten	
   years	
   ago,	
   while	
   I	
   was	
   working	
   at	
   the	
   private	
   family	
   office	
   of	
   a	
  
Venezuelan	
  tycoon,	
  my	
  whole	
  life	
  changed.	
  He	
  called	
  me	
  one	
  day	
  into	
  his	
  office	
  and	
  
said	
  	
  “Chavez	
  is	
  going	
  to	
  step	
  down…	
  we	
  need	
  to	
  be	
  prepared	
  for	
  the	
  transition”.	
  He	
  
also	
  said	
  that	
  some	
  people	
  were	
  preparing	
  a	
  transition	
  government	
  plan	
  and	
  suggested	
  
that	
  I	
  help	
  them	
  to	
  organize	
  their	
  ideas.	
  So	
  I	
  did.	
  It	
  was	
  a	
  turning	
  point.	
  The	
  people	
  I	
  
met	
  were	
  highly	
  qualified	
  professionals,	
  seasoned	
  at	
  their	
  respective	
  areas	
  of	
  expertise,	
  
and	
  concerned	
  about	
  the	
  fate	
  of	
  our	
  country.	
  After	
  spending	
  years	
  analyzing	
  our	
  social	
  
ailments,	
  they	
  had	
  gathered	
  to	
  draft	
  a	
  comprehensive	
  policy	
  plan;	
  a	
  set	
  of	
  remedies	
  to	
  
tailored	
  to	
  our	
  particular	
  circumstances	
  and	
  history.	
  We	
  worked	
  hard	
  together,	
  were	
  
together	
   the	
   day	
   Chavez	
   barely	
   overcame	
   a	
   military	
   coup,	
   in	
   April	
   2003;	
   and	
   sat	
   in	
  
front	
   of	
   the	
   TV	
   screen	
   together	
   more	
   than	
   a	
   year	
   later,	
   as	
   he	
   won	
   the	
   presidential	
  
referendum	
  of	
  2004.	
  
	
  
In	
  the	
  aftermath	
  of	
  the	
  referendum,	
  we	
  decided	
  to	
  launch	
  a	
  think-­‐‑tank	
  called	
  “Social	
  
Alliance”.	
  I	
  resigned	
  my	
  position	
  and	
  went	
  on	
  to	
  work	
  there,	
  compiling	
  and	
  editing	
  the	
  
outcomes	
  of	
  our	
  work	
  of	
  all	
  those	
  years.	
  In	
  2006	
  we	
  published	
  all	
  of	
  these	
  proceedings	
  
in	
  a	
  book,	
  Venezuela:	
  A	
  National	
  Alliance	
  to	
  Attain	
  Development,	
  which	
  became	
  highly	
  
influential	
  at	
  the	
  time	
  and	
  granted	
  most	
  of	
  us	
  an	
  advisory	
  position	
  in	
  all	
  the	
  opposition	
  
presidential	
  bids	
  that	
  came	
  later.	
  
	
  
Since	
  then,	
  quite	
  simply	
  put,	
  I	
  have	
  worked	
  on	
  a	
  transition	
  plan	
  for	
  a	
  transition	
  that	
  
never	
  occurred,	
  and	
  served	
  as	
  macroeconomic	
  advisor	
  for	
  four	
  presidential	
  candidates	
  
in	
   three	
   presidential	
   elections	
   (such	
   is	
   Venezuela).	
   We	
   have	
   fought	
   hard	
   in	
   every	
  
campaign,	
   2006,	
   2012	
   and	
   then	
   2013,	
   under	
   increasingly	
   difficult	
   political	
  
circumstances.	
  
	
  
We	
   have	
   been	
   deprived	
   from	
   access	
   to	
   media,	
   facing	
   the	
   almighty	
   propaganda	
  
apparatus	
  of	
  the	
  state.	
  We	
  have	
  been	
  forced	
  to	
  run	
  highly	
  constrained	
  campaigns	
  from	
  
a	
  financial	
  standpoint,	
  and	
  face	
  an	
  elite	
  that	
  does	
  not	
  blink	
  at	
  politically	
  abusing	
  of	
  the	
  
massive	
   oil	
   windfall.	
   We	
   lost	
   the	
   first	
   election,	
   in	
   2006,	
   amidst	
   a	
   large	
   boom	
   in	
   oil	
  
prices,	
   by	
   a	
   landslide:	
   63%-­‐‑37%.	
   We	
   lost	
   the	
   second,	
   in	
   October	
   2012,	
   the	
   last	
  
showdown	
  of	
  Hugo	
  Chavez,	
  by	
  11%.	
  The	
  third,	
  in	
  April	
  2013,	
  might	
  have	
  gone	
  either	
  
way.	
   As	
   reported	
   by	
   the	
   National	
   Electoral	
   Council,	
   we	
   were	
   defeated	
   by	
   Nicolas	
  
Maduro	
  -­‐‑	
  Hugo	
  Chavez´s	
  heir	
  -­‐‑	
  by	
  a	
  margin	
  of	
  1.4%.	
  
	
  
It	
  was	
  a	
  disheartening	
  defeat,	
  since	
  irregularities	
  surrounding	
  the	
  electoral	
  process	
  
outscored	
  by	
  millions	
  the	
  200,000-­‐‑vote	
  difference.	
  We	
  might	
  have	
  won	
  in	
  April	
  2013,	
  
yes,	
  but	
  we	
  lacked	
  the	
  institutions	
  necessary	
  to	
  enforce	
  our	
  victory.	
  We	
  are	
  aware	
  of	
  
the	
  large	
  number	
  of	
  flaws	
  and	
  manipulations	
  within	
  the	
  Venezuelan	
  electoral	
  system,	
  
but	
  we	
  choose	
  to	
  use	
  it	
  anyway.	
  Elections	
  are	
  the	
  way	
  we	
  have	
  chosen	
  to	
  bring	
  about	
  
political	
  change.	
  	
  We	
  want	
  to	
  do	
  it	
  the	
  way	
  we	
  are,	
  resolved	
  but	
  pacific,	
  while	
  at	
  the	
  
same	
  time	
  holding	
  on	
  to	
  the	
  principles	
  we	
  believe	
  in.	
  
	
  
Since	
   then,	
   the	
   economic	
   crisis	
   has	
   accelerated,	
   public	
   protests	
   have	
   become	
  
widespread,	
   and	
   rampant	
   inflation	
   and	
   a	
   nationwide	
   scarcity	
   of	
   basic	
   goods	
   have	
  
thrown	
   the	
   country	
   into	
   chaos.	
   Political	
   repression	
   has	
   accelerated,	
   with	
   opposition	
  
leaders	
  and	
  majors	
  being	
  jailed	
  with	
  little	
  or	
  none	
  justification,	
  and	
  without	
  the	
  due	
  
legal	
  process.	
  
	
  
I	
  wish	
  I	
  could	
  have	
  brought	
  to	
  you	
  a	
  full	
  story	
  of	
  hope.	
  We	
  are	
  not	
  there	
  yet,	
  but	
  we	
  
are	
   still	
   fighting,	
   and	
   we	
   are	
   getting	
   closer.	
   I	
   am	
   still	
   determined,	
   as	
   most	
   of	
   my	
  
comrades	
  fighting	
  daily	
  in	
  the	
  streets	
  and	
  in	
  every	
  corner	
  of	
  Venezuela,	
  to	
  reestablish	
  
the	
  country	
  conditions	
  that	
  attracted	
  my	
  father	
  and	
  millions	
  of	
  other	
  immigrants	
  from	
  
around	
  the	
  world	
  sixty	
  years	
  ago.	
  I	
  dream	
  of	
  that	
  place	
  that	
  made	
  my	
  father	
  proud	
  and	
  
grateful:	
  A	
  country	
  where	
  hard	
  work	
  and	
  determination	
  can	
  lead	
  people	
  to	
  live	
  a	
  better	
  
life.	
   Amazingly,	
   the	
   more	
   restricted	
   the	
   campaigns	
   that	
   we	
   run	
   and	
   the	
   higher	
  
inequality	
  in	
  access	
  to	
  media	
  and	
  financing,	
  the	
  more	
  votes	
  we	
  have	
  managed	
  to	
  get.	
  
	
  
	
   The	
  Venezuelan	
  experience	
  may	
  seem	
  far-­‐‑fetched	
  for	
  someone	
  standing	
  in	
  the	
  
thriving	
  economies	
  of	
  northeast	
  Asia.	
  I	
  find	
  that	
  thought,	
  the	
  idea	
  that	
  any	
  country	
  has	
  
surpassed	
  an	
  elusive	
  development	
  and	
  institutional	
  threshold,	
  after	
  which	
  there	
  is	
  no	
  
regression,	
  not	
  only	
  delusive	
  but	
  also	
  extremely	
  dangerous.	
  
	
  
Democracy	
  can	
  never	
  be	
  taken	
  for	
  granted.	
  Politics	
  and	
  policies	
  cannot	
  be	
  left	
  at	
  the	
  
mercy	
  of	
  the	
  political	
  establishment.	
  There	
  are	
  times	
  when	
  long	
  disconnects	
  between	
  
political	
  elites	
  and	
  their	
  constituencies	
  create	
  a	
  significant	
  leadership	
  vacuum,	
  as	
  it	
  did	
  
in	
  Venezuela.	
  As	
  we	
  have	
  learnt,	
  political	
  vacuums	
  tend	
  to	
  be	
  filled	
  by	
  authoritarian	
  
figures,	
  which	
  storm	
  onto	
  the	
  political	
  scene	
  carrying	
  a	
  message	
  of	
  reivindication.	
  They	
  
erect	
  themselves	
  as	
  fighters	
  of	
  social	
  injustice,	
  and	
  in	
  the	
  process	
  awaken	
  the	
  worst	
  
fears	
  and	
  resentments	
  underlying	
  society.	
  They	
  polarize	
  the	
  debate	
  and	
  degenerate	
  its	
  
language.	
  By	
  then	
  it	
  may	
  be	
  too	
  late.	
  
	
  
Reestablishing	
  democracy	
  and	
  progress	
  after	
  these	
  long	
  episodes	
  of	
  autocracy	
  and	
  
stagnation	
  comes	
  at	
  a	
  high	
  cost:	
  blood,	
  sweat	
  and	
  tears.	
  That	
  is	
  yet	
  another	
  reason	
  of	
  
why	
  we	
  should	
  care	
  about	
  the	
  least	
  advantaged,	
  and	
  the	
  process	
  of	
  politics	
  and	
  policy-­‐‑
making.	
  If	
  we	
  do	
  not	
  do	
  it	
  out	
  of	
  conviction,	
  solidarity	
  and	
  human	
  kindness;	
  we	
  should	
  
do	
  it	
  out	
  of	
  necessity.	
  If	
  not,	
  those	
  stigmatized	
  and	
  marginalized	
  by	
  the	
  political	
  system,	
  
will	
  eventually	
  come	
  after	
  us,	
  and	
  will	
  bring	
  our	
  system	
  of	
  priviledges	
  to	
  ashes.	
  The	
  
new	
  saviors	
  will	
  tend	
  to	
  concentrate	
  power,	
  inhibit	
  political	
  and	
  economic	
  freedom,	
  
often	
  crashing	
  economies	
  into	
  bankrupcy.	
  	
  	
  
	
  
After	
   years	
   of	
   stagnation,	
   growing	
   inequality,	
   and	
   hopelessness,	
   people	
   may	
   be	
  
willing	
  to	
  trade	
  some	
  freedoms,	
  and	
  even	
  democracy,	
  in	
  exchange	
  for	
  recognition	
  and	
  
entitlement.	
   Throughout	
   all	
   these	
   years,	
   as	
   we	
   gradually	
   lost	
   our	
   civil	
   liberties,	
   we	
  
reached	
  out	
  to	
  those	
  we	
  had	
  previously	
  ignored,	
  in	
  desperation.	
  Needless	
  to	
  say,	
  it	
  did	
  
not	
  work.	
  As	
  Amartya	
  Sen	
  has	
  rightly	
  pointed	
  out,	
  no	
  one	
  is	
  willing	
  to	
  defend	
  a	
  system	
  
from	
  which	
  she	
  derives	
  no	
  benefits.	
  

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How we lost democracy

  • 1.   How  we  lost  democracy:  Lessons  from  Venezuela   By  Miguel  Angel  Santos     This  speech  was  originally  delivered  at  the  firm  Kim   and  Chang  in  Seoul,  South  Korea,  on  July  2014.     I  come  from  a  family  of  immigrants.  My  father  was  born  in  rural  Galicia,  Spain,  in   1933;   he   spent   most   of   his   childhood   and   adolescent   years   under   an   iron-­‐‑fist   dictatorship,  a  country  marred  by  economic  hardship  in  the  aftermath  of  a  bloody  civil   war.  His  mother  died  when  he  was  twelve.  He  managed  to  graduate  from  high  school   and  was  among  the  few  accepted  into  the  University  of  Santiago  de  Compostela,  one  of   only  four  universities  existing  in  Spain  at  the  time.  But  neither  he  nor  my  grandfather   had  enough  money  to  pay  for  his  living  expenses  in  Santiago.     Hence,  when  he  turned  seventeen,  my  father  decided  to  follow  the  footsteps  of  his   brothers,   who   had   previously   sought   their   fortunes   outside   of   Franco’s   Spain.   He   borrowed  from  an  elderly  aunt  in  order  to  buy  his  ticket  and  boarded  the  Julio  Cesar,  a   transatlantic  voyage  to  Montevideo.    From  Uruguay  he  bounced  to  Argentina,  where  he   was  kicked  away  by  General  Peron  back  to  Uruguay,  before  finally  landing  in  Venezuela   in   1958.   His   arrival   would   coincide   with   the   overthrowing   of   a   cruel   military   dictatorship  and  the  beginning  of  a  political  system  that  would  be  considered  a  poster   child   of   democracy,   human   rights,   and   economic   progress   for   the   following   twenty   years.     In  Caracas,  my  father  met  and  almost  immediately  married  my  mother,  who  had   made   her   way   from   Morocco,   where   she   had   been   born   during   the   period   of   the   Spanish  Protectorate.  They  both  worked  very  hard  to  raise  their  four  children  in  much   better  conditions  than  those  of  their  own  childhoods.     I  treasure  early  memories  from  our  visits  to  my  father’s  brothers,  my  uncles,  who   had  settled  in  Argentina  and  Brazil,  countries  then  shattered  by  military  dictatorships   and  hyperinflation.  My  father  considered  himself  lucky  for  having  settled  in  Venezuela,   a  place  –  he  kept  on  repeating  –  “with  a  stable  currency,  a  rampant  economy,  where   you   can   achieve   anything   you   want   with   hard   work   and   determination.”   I   still   remember   the   soft   tone   of   his   voice,   his   repeating   the   syllables   distinctively   to   emphasize  his  points,  and  the  spark  in  his  blue  eyes  when  he  referred  to  Venezuela.     As  a  child,  I  remember  being  puzzled  by  his  remarks:  I  thought  that  it  was  axiomatic   in  every  place  in  the  world  that  thriving  in  life  was  just  a  matter  of  hard  work.  The   years  ahead  would  only  prove  how  wrong  I  was,  but  I  am  getting  ahead  of  myself.     Back  then  Venezuela  was  experiencing  the  most  spectacular  economic  growth  of   any  country  between  1950  and  1977:  Income  per  capita  grew  at  a  rate  of  2.9%  a  year   for  a  grand  total  of  111%.     As  he  had  been  deprived  from  the  opportunity  to  attend  university,  nothing  made   my   father   prouder   and   happier   than   attending   his   children´s   commencement   and   graduation  ceremonies.  But  by  the  time  I  finished  my  graduate  studies  the  country  was   already  in  free  fall.    
  • 2. In  the  twenty  years  spanning  from  1978  to  1998,  income  per  capita  fell  sharply,   losing   25%   of   its   1977   peak   level.   Once   one   of   the   world’s   greatest   success   stories   turned  into  one  of  the  most  spectacular  growth  failures.  We,  the  privileged  ones,  lucky   enough   to   have   hardworking   parents   who   cared   about   our   education   and   invested   heavily   in   us,   barely   noticed   the   steep   decline.   As   it   tends   to   happen,   the   loss   was   unevenly  distributed  across  social  strata.       Oblivious   to   the   social   pressure   pot   that   was   mounting,   I   decided   to   follow   the   advice  of  my  parents  and  went  to  work  in  the  private  sector.  “You  will  have  stability,   they  will  pay  better;  you  will  be  able  to  raise  a  family”.  They  were  prescribing  the  same   recipe  they  have  followed;  unaware  of  the  fact  that  the  underlying  social,  political  and   economic  conditions  were  changing  dramatically.  We  received  many  warning  signals,   but  decided  to  ignore  them.     We  chose  to  ignore  the  massive  riots  of  1989  and  the  two  failed  coups  staged  by   Hugo  Chavez  in  1992.  In  spite  of  the  fact  that  all  these  events  had  massive  approval   amongst   the   population   at   large,   once   they   were   somehow   suffocated,   we   went   on   living  our  lives  as  usual.     Without  realizing  it,  I  was  following  the  path  so  many  of  my  comrades  had  taken.   We   considered   ourselves   too   good   to   be   involved   in   politics.   By   a   singular   mix   of   ignorance,   self-­‐‑indulgence   and   arrogance,   we   inadvertently   decided   to   punish   the   representatives  of  our  rotten  political  system  by  walking  away  from  politics  and  policy.   We  did  not  see  at  the  time  that  by  doing  so  we  were  sawing  the  floor  where  we  had   been  standing.     We  did  not  realized  back  then  that  we  had  been  living  in  a  bubble,  as  an  affluent   minority   that   reaped   the   benefits   of   oil   rents   and   haphazardly   coexisted   with   a   majority  largely  deprived  of  all  benefits  of  modern  life.  A  large  banking  crisis  in  1994-­‐‑ 1996,  ill-­‐‑handled  by  our  old  political  establishment,  and  the  ensuing  victory  of  Hugo   Chavez  in  the  presidential  elections  of  1998,  shattered  our  reality  and  awoke  us  to  the   nightmare  of  autocracy  and  socialism.     Chavez   seized   the   political   momentum   and   passed   a   new   Constitution   extending   the   presidential   term   to   six   years   and   allowing   for   immediate   reelection.   The   new   Constitution   eliminated   the   public   financing   of   political   parties,   a   change   nearly   imperceptible  to  us  at  the  time,  which  in  fact  reduced  the  room  of  maneuver  of  the   opposition   dramatically.   He   then   proceeded   to   call   nationwide   elections   to   “re-­‐‑ legitimize”   all   powers,   winning   a   large   majority   at   all   levels,   presidency,   state   governors,  majors,  and  representatives  in  the  National  Assembly.  Having  conquered  all   executive   and   legislative   powers,   Chavez   moved   on   to   control   the   judiciary   and   electoral  council.     By  the  time  we  woke  up  and  reacted,  well  into  the  new  millennium,  it  was  all  too   late.  To  make  things  worse,  a  large  and  sustained  boom  in  oil  prices  ensued,  allowing   the  government  to  progressively  eliminate  the  private  sector,  either  by  bankruptcy  or   plain  expropriation,  without  having  much  impact  on  consumption.  Over  the  next  years,   we  saw  all  of  our  democratic  freedoms  and  civil  liberties  vanish  gradually  in  front  of   our   eyes.   All   private   TV   stations   and   most   of   the   newspapers   where   shut   down,   expropriated,   or   appropriated   by   a   corrupt   elite   who   made   overnight   fortunes   in   exchange   for   surrendering   the   news   and   broadcasting   to   government   propaganda.   Private  property  was  undermined,  thousands  of  production  units  and  land  plots  were  
  • 3. expropriated,   invaded,   and   harassed   with   impunity.   Many   opposition   leaders   were   prosecuted  and  jailed,  or  expelled  from  the  country  into  exile.  The  socialist  government   imported  guns  and  massively  distributed  them  among  the  population,  in  an  effort  to   create   local   militias   that   could   protect   them   in   the   event   of   a   coup   or   rebellion.   Eventually,   they   lost   grip   on   these   thugs   and   Venezuela   became   one   of   the   most   dangerous   countries   in   the   world.   According   to   official   figures   more   than   120,000   homicides  have  been  registered  over  the  fifteen  years  since  Chavez  became  president   for  the  first  time;  24,000  alone  in  2013.     Political   parties   were   not   banned,   but   were   rather   nullified.   Private   donations   decreased  sharply  as  the  industrial  apparatus  went  into  bankruptcy,  was  expropriated,   or   switched   hands   to   the   government   new,   government-­‐‑sponsored,   business   elite.   Political   parties,   activists   and   non-­‐‑governmental   organizations   receiving   funds   from   abroad  were  prosecuted  on  the  grounds  of  treason.  Without  public  financing  and  no   media,  the  voices  and  impact  of  the  political  opposition  were  reduced  to  a  minimum.     More   than   ten   years   ago,   while   I   was   working   at   the   private   family   office   of   a   Venezuelan  tycoon,  my  whole  life  changed.  He  called  me  one  day  into  his  office  and   said    “Chavez  is  going  to  step  down…  we  need  to  be  prepared  for  the  transition”.  He   also  said  that  some  people  were  preparing  a  transition  government  plan  and  suggested   that  I  help  them  to  organize  their  ideas.  So  I  did.  It  was  a  turning  point.  The  people  I   met  were  highly  qualified  professionals,  seasoned  at  their  respective  areas  of  expertise,   and  concerned  about  the  fate  of  our  country.  After  spending  years  analyzing  our  social   ailments,  they  had  gathered  to  draft  a  comprehensive  policy  plan;  a  set  of  remedies  to   tailored  to  our  particular  circumstances  and  history.  We  worked  hard  together,  were   together   the   day   Chavez   barely   overcame   a   military   coup,   in   April   2003;   and   sat   in   front   of   the   TV   screen   together   more   than   a   year   later,   as   he   won   the   presidential   referendum  of  2004.     In  the  aftermath  of  the  referendum,  we  decided  to  launch  a  think-­‐‑tank  called  “Social   Alliance”.  I  resigned  my  position  and  went  on  to  work  there,  compiling  and  editing  the   outcomes  of  our  work  of  all  those  years.  In  2006  we  published  all  of  these  proceedings   in  a  book,  Venezuela:  A  National  Alliance  to  Attain  Development,  which  became  highly   influential  at  the  time  and  granted  most  of  us  an  advisory  position  in  all  the  opposition   presidential  bids  that  came  later.     Since  then,  quite  simply  put,  I  have  worked  on  a  transition  plan  for  a  transition  that   never  occurred,  and  served  as  macroeconomic  advisor  for  four  presidential  candidates   in   three   presidential   elections   (such   is   Venezuela).   We   have   fought   hard   in   every   campaign,   2006,   2012   and   then   2013,   under   increasingly   difficult   political   circumstances.     We   have   been   deprived   from   access   to   media,   facing   the   almighty   propaganda   apparatus  of  the  state.  We  have  been  forced  to  run  highly  constrained  campaigns  from   a  financial  standpoint,  and  face  an  elite  that  does  not  blink  at  politically  abusing  of  the   massive   oil   windfall.   We   lost   the   first   election,   in   2006,   amidst   a   large   boom   in   oil   prices,   by   a   landslide:   63%-­‐‑37%.   We   lost   the   second,   in   October   2012,   the   last   showdown  of  Hugo  Chavez,  by  11%.  The  third,  in  April  2013,  might  have  gone  either   way.   As   reported   by   the   National   Electoral   Council,   we   were   defeated   by   Nicolas   Maduro  -­‐‑  Hugo  Chavez´s  heir  -­‐‑  by  a  margin  of  1.4%.    
  • 4. It  was  a  disheartening  defeat,  since  irregularities  surrounding  the  electoral  process   outscored  by  millions  the  200,000-­‐‑vote  difference.  We  might  have  won  in  April  2013,   yes,  but  we  lacked  the  institutions  necessary  to  enforce  our  victory.  We  are  aware  of   the  large  number  of  flaws  and  manipulations  within  the  Venezuelan  electoral  system,   but  we  choose  to  use  it  anyway.  Elections  are  the  way  we  have  chosen  to  bring  about   political  change.    We  want  to  do  it  the  way  we  are,  resolved  but  pacific,  while  at  the   same  time  holding  on  to  the  principles  we  believe  in.     Since   then,   the   economic   crisis   has   accelerated,   public   protests   have   become   widespread,   and   rampant   inflation   and   a   nationwide   scarcity   of   basic   goods   have   thrown   the   country   into   chaos.   Political   repression   has   accelerated,   with   opposition   leaders  and  majors  being  jailed  with  little  or  none  justification,  and  without  the  due   legal  process.     I  wish  I  could  have  brought  to  you  a  full  story  of  hope.  We  are  not  there  yet,  but  we   are   still   fighting,   and   we   are   getting   closer.   I   am   still   determined,   as   most   of   my   comrades  fighting  daily  in  the  streets  and  in  every  corner  of  Venezuela,  to  reestablish   the  country  conditions  that  attracted  my  father  and  millions  of  other  immigrants  from   around  the  world  sixty  years  ago.  I  dream  of  that  place  that  made  my  father  proud  and   grateful:  A  country  where  hard  work  and  determination  can  lead  people  to  live  a  better   life.   Amazingly,   the   more   restricted   the   campaigns   that   we   run   and   the   higher   inequality  in  access  to  media  and  financing,  the  more  votes  we  have  managed  to  get.       The  Venezuelan  experience  may  seem  far-­‐‑fetched  for  someone  standing  in  the   thriving  economies  of  northeast  Asia.  I  find  that  thought,  the  idea  that  any  country  has   surpassed  an  elusive  development  and  institutional  threshold,  after  which  there  is  no   regression,  not  only  delusive  but  also  extremely  dangerous.     Democracy  can  never  be  taken  for  granted.  Politics  and  policies  cannot  be  left  at  the   mercy  of  the  political  establishment.  There  are  times  when  long  disconnects  between   political  elites  and  their  constituencies  create  a  significant  leadership  vacuum,  as  it  did   in  Venezuela.  As  we  have  learnt,  political  vacuums  tend  to  be  filled  by  authoritarian   figures,  which  storm  onto  the  political  scene  carrying  a  message  of  reivindication.  They   erect  themselves  as  fighters  of  social  injustice,  and  in  the  process  awaken  the  worst   fears  and  resentments  underlying  society.  They  polarize  the  debate  and  degenerate  its   language.  By  then  it  may  be  too  late.     Reestablishing  democracy  and  progress  after  these  long  episodes  of  autocracy  and   stagnation  comes  at  a  high  cost:  blood,  sweat  and  tears.  That  is  yet  another  reason  of   why  we  should  care  about  the  least  advantaged,  and  the  process  of  politics  and  policy-­‐‑ making.  If  we  do  not  do  it  out  of  conviction,  solidarity  and  human  kindness;  we  should   do  it  out  of  necessity.  If  not,  those  stigmatized  and  marginalized  by  the  political  system,   will  eventually  come  after  us,  and  will  bring  our  system  of  priviledges  to  ashes.  The   new  saviors  will  tend  to  concentrate  power,  inhibit  political  and  economic  freedom,   often  crashing  economies  into  bankrupcy.         After   years   of   stagnation,   growing   inequality,   and   hopelessness,   people   may   be   willing  to  trade  some  freedoms,  and  even  democracy,  in  exchange  for  recognition  and   entitlement.   Throughout   all   these   years,   as   we   gradually   lost   our   civil   liberties,   we   reached  out  to  those  we  had  previously  ignored,  in  desperation.  Needless  to  say,  it  did   not  work.  As  Amartya  Sen  has  rightly  pointed  out,  no  one  is  willing  to  defend  a  system   from  which  she  derives  no  benefits.