Recently, a well-known journalist who is writing a book about Chavismo reached out to me about corruption in Venezuela, asking for names, figures, responsibilities, and so on. Corruption is the big elephant in the room. In my opinion, it is the main obstacle to development. Unfortunately, corruption has turned into an acceptable crime, with no repercussions. It would be hard to find a Venezuelan who hasn’t had to deal with corruption at some point in their life—be it through a traffic officer, a security guard, a public office worker, a private company employee, or a facilitator… Now, with the issue of food shortages and economic deterioration, corruption appears in countless forms, such as people standing in line to buy food and then selling their spot, or those who manage to control essential goods like Harina Pan, pasta, oil, and other supplies, which they then resell at prices far removed from the regulated rates set by the regime, etc. In short, corruption is present in almost every aspect of the average Venezuelan’s daily life. This omnipresence has led to its acceptance, as mentioned before. Most people view it as just another factor to consider. In fact, many rely on it for their day-to-day needs.
This ethical laxity among Venezuelans is one of the main causes, if not the primary one, of the miserable state the country is in. Economic corruption, understood as that which brings a “benefit” to those involved, is accompanied by its sister, moral corruption, which makes illegal acts seem acceptable.
In the last two years, I’ve been exposing individuals and companies involved in economic corruption. During this time, I’ve heard people who claim to be serious and honorable say, “everyone pays commissions to get government contracts; that’s the only way to get them, and by the way, this isn’t new—it has always been this way.” They express this with no remorse, convinced that this, and only this, is the viable way to do business in Venezuela. Others tell me, “if I don’t do it, there are plenty of others willing to; so I might as well take advantage, because in the end, I live here in Venezuela, and that’s how things get done here.” The second group, fully aware of the moral and legal implications of corruption, excuse their actions by claiming to be a minority in a country full of corrupt individuals.
Let’s talk numbers. Yesterday, I shared on Twitter an estimated income (not including internal and external debt or PDVSA debt) that Chavismo has received since 1999. The methodology, which may be flawed, is simply adding the annual GDP as reported by the World Bank, based on figures from the INE.
Here’s the number:
2,912,457,000,000 dollars (two trillion, nine hundred twelve billion, four hundred fifty-seven million).
Then someone on Twitter told me that to make that figure more impactful, it should be contrasted with the amount spent on projects by the Chavistas. I don’t know the amount allocated for public works since 1999, but what I can confidently say is that the cumulative GDP of ALL Venezuelan governments from the 20th century is less than what Chavismo has received. In other words, the combined GDP of all governments from 1900 to 1999 is lower than what has entered the coffers managed by Hugo Chavez and his allies since 1999.
The critical question is: if Chavismo has received more money than all previous governments combined, where can we see the works that should also exceed in number those built with just a fraction of the income?
I’ll tell you where: nowhere. And I will also tell you the reason why: corruption.
I also recently read a report by an Argentine colleague in El País stating that capital flight from Venezuela is estimated at 405.8 billion dollars, while Venezuela’s GDP in 2013 was 382 billion dollars. In other words, more money has left Venezuela than has entered in a whole year. I’m still waiting for answers to a series of questions about the source of the data, the methodology used, and the time period concerning such capital flight. While I wait for that info, let me pose another question: how is it possible that the Venezuelan state owes 117 billion dollars and PDVSA owes 43 billion dollars, while the state only has 21 billion dollars in reserves, when Venezuelans have supposedly taken out 405.8 billion dollars? Which authorities and banks have facilitated this capital flight? I’ll tell you: ALL of them. And I’ll tell you the reason: corruption.
When a contractor, let’s call him Derwick, inflates a budget for a government contract: we ALL lose. When a state entity, let’s call it PDVSA, awards overpriced contracts to a shell company: we ALL lose. When a public employee, let’s call him Diosdado Cabello, turns a blind eye and accepts a bribe: we ALL lose. When a private bank, let’s call it BANESCO, establishes mechanisms that allow capital flight while bypassing exchange controls: we ALL lose. When political party leaders remain silent on corruption cases involving close family members: we ALL lose. When Venezuelans, from both sides, instead of ostracizing those involved in corruption, celebrate and admire their “achievements”: we ALL lose. When corruption is seen as an acceptable and valid way to gain benefits: we ALL lose.
We’ve been stuck in this situation for 200 years. Norway, a country that, like Venezuela, produces oil but has only 5 million inhabitants, has saved 838 billion dollars in a reserve fund. Venezuela, having received 2.9 trillion dollars since 1999, is left with debts. Let me tell you why: corruption in resource management.
One of the questions I was asked was if I could estimate the amount of corruption since the coup leader came to power. How much of the 2.9 trillion dollars has been stolen? I don’t know, but if I start adding up the waste on unnecessary purchases, gifts to other countries, free oil to Cuba, Nicaragua, the overspending on purchases, the squandering on populist programs, and the buying of votes and consciences globally, I believe I can safely say it’s over 150 billion dollars. Sufficient to pay off the entire debt. If we had responsible leaders, we would be like Norway. Since we are governed by Venezuelans, we are as we are.
Some are debating whether Venezuela is predominantly a middle-class country. Income figures suggest so. And I wonder: what kind of middle class can’t even afford basic products like flour, eggs, milk, oil, toilet paper, and coffee?
We must be honest about the cost of corruption in all its forms. If we don’t, we will continue wandering aimlessly in the underdeveloped world.