The Underbelly of Portuguesa's Economic Boom

The macroeconomic indicators of the boom that Asdrúbal Oliveros reports in this state might not be trickling down and could be confined to certain areas

In early October, Venezuelan economist Asdrúbal Oliveros –in a piece for this outlet– affirmed that while Venezuela’s economy will barely grow this year, the economy of the state of Portuguesa, Venezuela’s agricultural powerhouse, is expected to grow 10%. Oliveros mainly attributes Portuguesa’s “boom” to three mechanisms: more efficient collaboration between small farmers and big agri-businesses, strengthened debt market and loan access, and enhanced communication between the regional government and private actors. But Portuguesa’s touted “success” story is actually akin to a fragile sandcastle, built on severe inequality and structural disparities, like much of Venezuela’s recent economic recovery

As a Portugueseño myself with very close ties to the state, I have observed, time and again, how people –from small farmers to medium-sized businesses– struggle to make ends meet, perceiving a more unequal and less prosperous Portuguesa. Then, in good faith and in the most constructive spirit, I decided to reply to Oliveros’ conclusions and talk about the underbelly of Portuguesa’s situation.

To be fair, I do not seek to question his data: parts of Portuguesa may well be riding a high-tide of economic growth and there may also be some, albeit very narrow, positive externalities originating from confined, sector-specific growth. In fact, I do not seek to drop the hammer on Oliveros’ credibility but to hand readers a fuller picture of the state’s economic and social context, encouraging them to think critically about it.

Instead, I seek to critically approach the mechanisms that Oliveros associates with Portuguesa’s “dynamic economy” and offer an alternative view to his optimistic assessment of Portuguesa’s situation. While macroeconomic indicators –in times of perestroika– may reflect growth in the state, this approach leaves out the social dimension and the unstable structural backdrop of Portuguesa’s economy necessary for true Portuguesa-wide economic success. 

Similar to what has happened with nationwide social indicators despite the lukewarm growth of the national economy in 2022, it is more consistent with the economic reality of Portuguesa at-large to say that improving economic indicators are not translating as success or prosperity for most Portugueseños. Thus, Portuguesa is marred by severe inequality and much of its people are devoid of economic opportunities. This is an important point in common with Oliveros who has repeatedly warned about Venezuela’s rising “triple inequality” (social, geographical and sectorial). 

Portuguesa is not only Acarigua (and diesel shortages are taking a toll)

Indeed, Portuguesa grapples with profound internal geographic inequalities. In fact, Oliveros overemphasizes the economic dynamics of Acarigua, the second most-populous city and hub for large agri-businesses. But in places like Biscucuy, El Playón or Guanarito, the success stories of Acarigua-Araure –where there might be a stronger middle class and private sector– are not replicating: largely due to both structural economic dynamics in the state as well as with the all-encompassing inequality, depressed consumption, and downward social mobility. 

Firstly, Oliveros recurrently mentions that the private sector is driving Portuguesa’s recent boom.  But in Portuguesa, as in Venezuela more broadly, the line dividing truly private businesses and enchufado-financed investments can be thin and blurry. While Oliveros acknowledges that there might be enchufados, he also stresses that “local entrepreneurs and families [are] finding opportunities in a booming sector.” 

Nonetheless, local entrepreneurs and enchufados may at times coexist or overlap and many meaningful investments are directly or indirectly supported by governmental elites or at least enjoy their acquiescence. Notwithstanding the many honest,hard-working entrepreneurs, it is important to acknowledge the role of a  new elite raised under the wings of Chavismo. Besides, these meaningful investments –mostly focused in Acarigua-Araure– tend to be narrow and not all-encompassing, sometimes geared towards elites’ lifestyles and consumption patterns.

Although macroeconomic indicators are significant, they alone cannot define success in the face of these jaw-dropping realities that show no structural or inclusive economic success in Portuguesa.

Another key driver for Oliveros is an improved synergy between small farmers and large agri-businesses. Again, maybe there is some bias in the sampling method by over focusing on dynamics in the eastern twin-cities of Acarigua-Araure and adjacent farmers. But these accounts do not correspond entirely with the views from those working the agricultural cycle year-long—from sowing to harvesting. Ramón Elías Bolotin, member of Fedeagro, recently declared, quite colloquially, that when it comes to maize, “vamos a paso de morrocoy” due to severe  fuel shortages in the state, leading to crops covering only 60% of arable land. Indeed, while 2022 crop production resurged to nearly 2018 levels, Bolotin emphasizes that maize yields are expected to drop by 20% in Portuguesa compared to 2022. Other key crops, like rice, are also experiencing lower-than-expected yields and scheduled sowing activities for the summer cycle have been halted from a lack of gasoline. 

Moreover, from Fedeagro to Fedecámaras-Portuguesa, there have been accentuated concerns about financing challenges—critical for a structurally unpredictable agricultural economy. Productive sectors have come together to develop what Oliveros deems “private debt markets,” which have been active for years now given scarcity of public financing. I wonder, however,  whether these processes are producing broader, far-reaching positive externalities outside of agriculture  and beyond macroeconomic indicators. 

Finally, enhanced communication between regional authorities and the private sector may have well increased. Yet, there remains unfulfilled commitments by the regional government. For instance, the most critical request made by producers to the government of Portuguesa has been regular access to diesel —vital for crops’ sowing, harvesting, and transportation. And yet fuel remains systematically scarce both for producers and Portugueseños in general, reflecting a situation that has become rather common throughout the country outside Caracas. 

Agriculturists urgently require about 12 million liters of gasoline for scheduled harvesting, but the regional government’s hastily promised 6 million liters are nowhere to be found. Oliveros, however, fails to highlight these barriers in Portuguesa. He mentions these contingencies in Zulia or Trujillo, but not explicitly in Portuguesa. So, public-private communication may be better, but it is failing spectacularly in delivering tangible outcomes—such as drivable roads in rural sectors, frequent distribution of diesel and gasoline, and perhaps a day or two without power outages.

Thus, the mechanisms highlighted by Oliveros could be driving statewide upwards macroeconomic indicators in Portuguesa, but on the ground these “success” stories are confined to narrow, sector-specific wealth spots –following the nationwide pattern, such as the wealth islands in east Caracas and Lechería– and are happening amidst deep social inequality and the scars of the humanitarian crisis. 

The common reality, the one most Portugueseños live daily, is that they are struggling to make ends meet. According to 2021 data from the ENCOVI poll, 97% of Portugueseños lived below the poverty line (roughly 800,000 people), a vast majority of  whom have also reported food insecurity —paradoxical in an agricultural and “booming” state—and over half were unemployed, with a large proportion of those employed earning minimum wage. While Portuguesa’s poverty rate may have slightly decreased nowadays, considering the nationwide small decrease reported by the 2022 ENCOVI, it’s clear it remains skyhigh. In fact, nationwide, the poverty rate is still over 80%. Although macroeconomic indicators are significant, they alone cannot define success in the face of these jaw-dropping realities that show no structural or inclusive economic success in Portuguesa.

Most Portugueseños –from Boconoíto, Papelón and Guanare, to Píritu, Chabasquen, and San Rafael de Onoto– are not reaping the fruits of Portuguesa’s boom, as soaring macroeconomic indicators rarely translate into prosperity for them. For them, the economy is not more prosperous or profitable. That, in a hellscape of inequality, is sadly true.