The Bolivarian Republic is gradually crumbling, and Chávez seems intent on speeding up the process. According to International Monetary Fund projections, Venezuela is the only major Latin American country that will experience an economic contraction in 2010. Inflation has reached staggering levels: As Bancaribe economist Adrian Aguirre told Bloomberg News after Venezuela’s central bank unveiled the April price data, “The fact that food prices rose by more than 11 percent is something we’ve never seen in the last decade.” Venezuelan importers are also grumbling about the new two-tiered exchange-rate regime, which was implemented as part of the devaluation back in January. The higher rate (4.3 bolívares per dollar) applies to “non-essential” imported goods. But the Associated Press reports that “the government has not distributed enough dollars at the official rate to satisfy demand, forcing close to half of Venezuela’s importers to buy much more expensive greenbacks on the black market.”
Venezuela’s economic misery has inflamed anti-Chávez sentiment and fueled large-scale protests. Ordinary Venezuelans are mad about food and water shortages, power outages, and surging crime rates. There are national legislative elections scheduled for September; unfortunately, many Venezuelans fear those elections will never take place. It’s possible that Chávez will manufacture a phony “security crisis” and suspend the voting indefinitely. It’s also possible that he will permit the elections to go forward but disqualify certain candidates from running or preemptively arrest them on trumped-up charges.