Don’t cry for me Venezuela

Like Argentina before her it now appears that Venezuela is on the brink of social and economic collapse. While many factors may have influenced this crisis, a common fundamental catalyst responsible for both the misery of Argentina and the growing misery of Venezuela is the lack of Good Governance! Like many emerging markets, Venezuela is endowed with tremendous natural resources.

With the largest crude oil reserves in the Western hemisphere and vast amounts of yet untapped natural gas reserves Venezuela would seem to be a likely candidate for a highly developed and socially balanced society. Unfortunately this is not the case, with 80% of her population living in poverty the flow of black gold has benefited only a select few. And as history has shown regardless of whether a country is governed by the right or the left when a country is not governed well the results remain the same.

In 1998 Hugo Chavez was elected by an overwhelming majority of the population in a free and fair election. His landslide election overthrew one of the worlds most rotten political systems and so it seemed that Venezuela was taking her first step towards good governance. So it seemed, but the events of the past 12 months have shown that there is far more to good governance then simply winning a popular mandate. Good governance is a respect for all institutions private and public, a willingness to look for common ground on issues that have implications for the entire population not just a single constituency. Good governance is also grounded in a commitment by those officials carrying the mantle of public trust not tolerate corruption in any way, shape or form!Hugo Chavez may have had a popular mandate but his administrations failure at good governance has now cost him that mandate. The latest polls show that over 60% of the voting population would like Chavez to either resign or to hold early elections. Yet Chavez resists even as Venezuela drifts deeper and deeper towards economic and civil chaos! Thus Chavez and his administration have shown their true colors hiding behind the letter of the law, while showing a complete disregard for the public trust!What’s next for Venezuela? Unfortunately without good governance the tremendous inequities in social and economic strata’s that exist in Venezuela today will never be rectified.

However, recent events indicate that some good may come out of the crisis in Venezuela that may have profound effects for the region. The current American administration has shown a keen understanding as to the relationship between good governance and positive social and economic growth. This understanding seems to be driving a new commitment that promotes and rewards good governance while at the same time penalizing poor governance. In addition the White house seems committed to empowering and energizing regional elected leaders so that they may find solutions to problems that affect them directly. Examples of this commitment to good governance and regional solutions include: A refusal by the IMF and the administration to reward Argentina’s endemic corruption and economic mismanagement with additional loans; conversely, the warm and enthusiastic embrace of the new Brazilian President, a socialist named Lula da Silva, by President Bush; and finally, the refusal by the administration to recognize any government in Venezuela that is not elected by free and fair elections.

What does this mean for Venezuela and the region? The United States endeavors to see a strong and growing middle class, democratic institutions and a narrowing of the gap between rich and poor in this region, because these factors will bolster America’s economy and national security. To realize these changes requires good governance; however, good governance alone cannot rectify vast imbalances in income distribution, education and healthcare. Portugal and Spain provide recent examples of this fact.

While Portugal and Spain quickly adopted the institutions and commitment to good governance after the collapse of their respective dictatorships the gap that existed between these two countries and democratic Europe was simply to great to overcome by internal means. The European Union acting in its own self interest made the required investments to upgrade infrastructure, education and healthcare so that these countries could become contributors to the regional economy. Thus even in the face of an often-resistant congress and a globally uneducated populace the Bush administration is still committed to rewarding good governance recognizing the fact that it is in our own long-term best interests.With global capitalism quickly infiltrating the most distant corners of the world, action must be taken accordingly to reverse some of the social imbalances that can occur.

If issues such as these are not addressed, then the threat of a global backlash will grow. This backlash will be fueled in part by the rising expectations of expectant populations meshed with the social inequities that capitalism without good governance brings. That is our opportunity and our threat.