Original art by @modográfico

The moment when chavismo finally made sense to me came while I was gazing around the duty free shops at Maiquetía airport.

I remember it vividly. It was at the tail-end of one of my trips home. We had just celebrated the Copa América 2007, and the government had spent lavishly on stadiums and festivities surrounding the tournament.

The country seemed drunk on petro-dollars, and all people cared about was scoring more. Everyone obsessed over cupos, credit cards and carpetas. Who you knew – in the government, in the military, at the bank, at the car dealership – determined your access to either dollars or the subsidized things you could buy with them. Caracas was one of the most expensive cities in the world. The city was one giant SUV-ed, breast-implanted, eighteen-year-old-Scotch marinated party.

Nobody cared about creating things. Entrepreneurship became a dirty word. The solar system had been replaced with the Cadivi cupo, and the entire country was orbiting around it.

In the midst of this craziness, I remember stopping by the Swarovski store in Maiquetía Airport. I had seen the little figurines at the Panama airport, but the ones here were priced much cheaper when you used the black market dollar exchange rate. Only then did I realize that they were being priced at the official – and artificially low – rate.

Caracas was one giant SUV-ed, breast-implanted, eighteen-year-old-Scotch marinated party.

In other words, some bastard was getting cheap dollars to import Swarovski figurines, surely pocketing the change and then some.

The realization that the government was, in effect, subsidizing our consumption of Swarovski crystal figurines hit me hard. I then realized that everything, everything, hinged on this.

It’s hard to imagine, but Hugo Chávez did not always control the purchase and sale of dollars. During the first three years or so of his administration, the dollar floated around according to – gasp – the laws of supply and demand. Inflation was relatively low, and XXIst Century Socialism was in its teething stages. Venezuela was normal, revolution-arily speaking.

It was only in 2003, in the heat of the government’s political problems, that the exchange controls still in place today came to be. CADIVI was born.

CADIVI stood for Comisión de Administración de Divisas, and it was the government office through which dollars were sold at below-market rates to specific sectors. If you wanted to import medicine, you got dollars! If you wanted to import food, you also got dollars! If you sold airline tickets in local currency and wanted to repatriate your earnings, here are your dollars! If you wanted to travel overseas, you also got dollars – but up to a limit.

It was money for nothing and trips for free.

Of course, a black market sprouted, one in which the actual price was higher than the official one. Not everyone could get all the dollars they wanted. Buying cheap and selling at market price was the name of the game..

Some bastard was getting cheap dollars to import Swarovski figurines, surely pocketing the change and then some.

And while the economics of CADIVI were ghastly, its politics were sheer chavista genius.

Chavismo can be faulted for many things, but ignorance about Venezuela is certainly not one of them. Everything, from naming the country after Simón Bolívar to the movement’s unyielding militaristic tendencies, is rooted in a profound knowledge of the nation’s symbols and its essence.

Venezuelan society is, in essence, a rentist society. That is why CADIVI made sense. It forced the middle classes and the business elite to focus on something other than overthrowing the government. It zeroed them in on what they do best: scoring oil rents.

Misión CADIVI, as I christened it, became just like any other Misión, the generic name given to government social programs. Like the others, Misión CADIVI was an attempt at political control barely disguised as social policy. People stopped being political opponents and basically became your clients. In picking and choosing who had access to dollars, the government had absolute power to reward and punish whomever it chose. Divide and conquer is the natural offshoot of this perverse strategy.

The place where Misión CADIVI yielded the highest returns was, of course, the military. Who wanted to kick the government out when there were so many petro-dollar bowls to dip your spoon in? It’s no wonder that, in a deliciously frank moment, Aristóbulo Istúriz once said that exchange controls were a “political” measure, and that if they were ever eliminated, the government would be overthrown. He was exactly right.

Cadivi forced the middle classes and the business elite to focus on something other than overthrowing the government.

Of course, CADIVI is gone now, but in its place we have its more dilapidated, Tropical Mierda cousin, the CLAP box. Its purpose – political control – is the same. It’s no more a coherent social policy than CADIVI was. Subsidies are just the way chavismo hands out whatever oil rents it has to potential political opponents. They neutralize society.

As I write this, my mind wanders to 2008, when Misión CADIVI ruled. At the time, the term didn’t catch on. On this blog, I railed against what CADIVI was doing to us as a society, but people wouldn’t listen. In fact, the opposition ran on a platform to preserve the misiones that were, essentially, deeply enslaving. Opposition candidates did not dare say they would do away with CADIVI. They lionized the very tool that was killing us.

That year I went to the wedding of a dear friend, only to be shocked at the luxury surrounding the event. I listened to stories of the Caracas’ elite partying – the furniture brought in from France, the ice sculptures shipped from New York, the non-stop sushi bars. The middle class, obsessed with flying overseas to raspar el cupo, was also part of this. 35,156 billion dollars were allocated to subsidized credit card and travel expenses over the course of 14 years. The hangover from this binge is now evident in the face of kids eating from the garbage.

Venezuela was too busy being subsidized to think about the consequences. In exchange, all the government asked was that you tacitly agree to be enslaved.

It worked magnificently.

13 COMMENTS

  1. There are many wonderful writers at Caracas,Chronicles but I must say I wish we would see your written work much more often. Great article in part because too many here misunderstand or fail to acknowledge your essential point about the Chavistas that explains their long reign despite their obvious failures at governance. Your point:

    “Chavismo can be faulted for many things, but ignorance about Venezuela is certainly not one of them. Everything, from naming the country after Simón Bolívar to the movement’s unyielding militaristic tendencies, is rooted in a profound knowledge of the nation’s symbols and its essence.”

    As a foreigner I have struggled understanding how the Chavistas have managed to survive their utter destruction of your country and its institutions. That frustration peaked when the Chavistas did well in the regional elections and,I probably drove people here crazy because I could not explain the election results to myself and challenged every assertion that they fairly won the election. The above paragraph of yours put it into perspective for me although I wonder if saying it a little differently is even more true because life and elections are comparative.. The opposition lacks the Chavistas” profound knowledge of the nation’s symbols and its essence”. thanks.

    • Thanks William. I agree with your counterfactual – up to a point. In 2008, the opposition did not understand the country. Now, they don’t understand their own voters.

  2. There have been a few on point and valuable articles the last few days. Specially this one and the one about the culture surrounding chavismo.

    Both are things i complain about and grief deeply because they are subjects that point the finger at the middle class and upper class who have their big share of fault in tearing the economy to crumbles yet refuse to ackowlege tge problem. Instead directing the blame only to the niches and jalabolas of the barrio. They dont think thay were jalabolas themselves . Trying to score cupos and buy cheap laptops refreshing the VIT and Dicom page like madmen.

    “Subsidio a la clase media” is how i have known the currency exchange.

    Be it with the academia directing love letters to Castro, artists praising populism in their song and telenovelas and bussinrmen and well off families sucking the cupitos tit dry until it bled, and their jids emigrating using what they accumulated raspando cupo viajero and cupo estudiantil.

    They are all jalabolas too

  3. Great article! Reminds me of a very good Sobremesa Chronicles written also by Juan which dealt precisely with this. Billions of dollars squandered (not only by ruling Chavistas but also by the upper and middle classes) but rarely someone says anything about it. Also surprising to see just 8 comments in this brilliant post as opposed to the typical 50-100 on other posts. No hay peor ciego que el no quiere ver…

  4. Todos los venezolanos creyéndose millonarios por el mundo… derrochando $$$ a precio artificial… tanto chavistas como opositores… el desastre que hay hoy día sólo es la consecuencia de esa borrachera de $$$$ … $ para turismo, comerciantes, estudiantes… y todavía con el mayor descaro se preguntan donde está el ingreso petrolero?… como si ellos fueran inocentes y ajenos a lo que ocasionó esta tragedia…

    • Qué divertido es culpar a unos huevones que comían unas migajas cuando sobre la mesa estaban los enchufados del alto chavismo jartándose hasta reventar.

      Que mientras un pelabolas gastaba 300 dólares en un viaje para Cúcuta, un súper revolucionario chavista dojo dojito se espalillaba más de 50 millones de dólares en un sólo contrato de importación de cualquier basura, gracias al cobardante podrido.

  5. Great piece. It brings back memories. Marx never had anything on the profound feelings of alienation that come with being around currency controls.

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