I picked an exciting week to visit Venezuela. The night before my arrival, the regime seized the country’s largest shopping mall. The day after, Israeli authorities disclosed that a recently intercepted shipment of missiles to Hezbollah had originated in Venezuela.

These two dissimilar events are importantly related. The seized mall belonged to one of Venezuela’s wealthiest Jewish families. Following an armed attack on the country’s most visible synagogue in January 2009, the seizure sent a strong message: None of you are safe.

The Chavez regime’s turn toward harshly anti-Jewish policies is part of an ominous self-radicalization.

Days before seizing the mall, the Chavez regime had grabbed a chain of French-owned hypermarkets. In the regime’s early days, nationalizations were concentrated in the energy sector and were generally compensated, although at prices well below market values. Now, however, there is no pretense of payment — and the targets reveal more ominous intentions.

In 2007, the regime shut down an independent television station. It has closed dozens of independent radio operations. It has gained control of the country’s largest Internet service provider. (You can still access independent sites from within the country — like the indispensable CaracasChronicles.com — but I am told by well-informed sources that the regime’s Cuban-assisted intelligence services do monitor who reads what.)

There are two prevailing theories of events here.

Theory One is that the regime is cocky and confident — and is determinedly driving toward a Cuban-model dictatorship. Last year’s scheduled elections for the national assembly were postponed to this September. Many Venezuelans speculate they will be postponed again. But then, postponement may not be necessary: In the interim, Chavez has staffed the supposedly independent electoral commission with regime loyalists, who are gerrymandering districts against the opposition.

Chavez sometimes loses elections, but those losses are never allowed to matter. If he loses a governorship, he transfers the governor’s powers — and tax revenues — to the central government. If he loses a mayoralty, he establishes an independent municipal “revolutionary” structure and shifts the mayor’s powers to his own creatures.

Theory Two is that the regime is radicalizing because it is disintegrating. Chavez has overspent his oil revenues and is inflating the currency to cover the huge fiscal gap. He has applied price controls to conceal the inflation, but of course that generates shortages of everything from engineering supplies to coffee.

(Remember the old joke: If communists ruled the Sahara, there’d be a shortage of sand? Venezuela used to be the world’s No. 2 producer of coffee. Now people stand in line for it. Underinvestment in the electrical network causes blackouts and brownouts throughout the country. In Maracaibo, the second biggest city, two-hour blackouts roll through every quarter of town. Caracas is exempt. But even there, the streetlights are dimmed at night, aggravating the country’s horrible traffic safety and crime problems.)

Chavez fixes blame for the shortages — and especially the food shortages — on speculators and capitalists. But you can only do this for so long. Eventually, you must act. So when rice became scarce, he grabbed a rice-processing facility from Cargill.

Last week, Chavez devalued the local currency, the Bolivar, from a fixed rate of 2.15 Bolivars to the dollar to 4.3. (The market rate is lower still, closer to 6 to 1.) Chavez issued orders that nobody was to raise prices after the devaluation. When prices of course jumped anyway, as they had to, somebody had to be punished. The blow fell upon the French grocery chain Exito. Blame the foreign imperialists when prices rise after the value of money falls!

The trouble for Chavez is that eventually you run out of imperialists to punish. And yet the prices will keep rising and the shortages will get worse.

What he needs most of all is confrontation with a foreign enemy on whom all social evils can be blamed. The United States? Yes, but only up to a point. This is not the Cold War anymore; there is no Soviet superpower protector. If Chavez goes too far — if, for example, he is caught too blatantly aiding the FARC guerillas operating against U.S. ally Colombia — he risks overwhelming retaliation.

No, the enemy he needs should be remote but omnipresent, one who can be represented as powerful but who cannot in fact hit back. Who does that sound like? Hmmmmm ... Oh yes! That favourite reliable standby of thugs and dictators everywhere.

And so the airwaves fill with attacks on “criminal Zionists” and the country’s walls are suddenly daubed with slogans like this which I saw yesterday under a spraypainted Star of David: “The Jews are the cause of all our misery.”

© David Frum
dfrum@aei.org

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