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Venezuela’s War on Property Rights Will Lead to Greater Poverty

By: Sabrina Martín - @SabrinaMartinR - Feb 5, 2015, 8:49 am

EspañolIn the aftermath of the recent expropriation of multiple supermarket chains by the administration of Venezuelan President Nicolás Maduro in a bid to curb shortages, the PanAm Post interviewed Luis Alfoso Herrera, coordinator of the Property Rights Observatory at Venezuelan think-tank CEDICE Libertad.

In the last five days, the Venezuelan government has arrested at least 17 businessmen, owners, managers, and shareholders, according to the observatory. So far in 2015, the state has raided seven chains and taken possession of seven more, leading Herrera to argue that property rights in Venezuela are a thing of the past.

Is there any truth in allegations that those companies seized by the government, like Farmatodo or the supermarket chain Día a Díawere deliberately fomenting lines?

Look, nobody has more interest than store owners and managers in seeing consumers and clients satisfied. Their income depends on it, so they naturally want customers to come back. No businessman wants to mistreat or ignore his customers.

The government claims a private firm must have a minimum amount of cashiers to avoid lines, or permanently stock shelves with products, leaving nothing stored away, as if they had the same duty as state institutions. Is there any company, especially in commerce, that works without storing their products away from the shop floor? It’s ludicrous that any kind of storage should be labelled proof of smuggling or hoarding.

Unfortunately, one is left with the feeling that the government raids stores as an act of political theater, and to avoid responsibility for its socialist model. They want to build up the case for a non-existent “economic war.”

What do you think of this policy?

It belongs to an economic model whose pillars are state property and widespread regulation. It’s a model where the central government tries to direct consumption, and where the private sector is merely a tool — while it exists at all; the Fatherland Plan 2013-2019 plans to do away with private property in the productive sector altogether.

The laws passed during Chavismo‘s rule state that any irregularities detected in a company can lead to expropriation. It’s a policy that fails to guarantee due process or property rights, let alone economic freedom.

What’s the current situation of property rights in Venezuela?

In Venezuela, just as it’s very difficult to say that there exists freedom of speech, it’s also hard to say that private property exists.

In theory there’s a constitutional norm protecting and defending private property, but in practice there’s no kind of judicial guarantee, because the Supreme Tribunal of Justice hasn’t issued a single sentence in the past nine years reversing the expropriation, occupation, or seizure of land or property. This doesn’t happen within a democratic society, and it shows us that there’s no guarantee for property, nor for any other human right.

(Cedice)
Herrera’s observatory has recorded all the instances of property violation in Venezuela in 2014. (País de propietarios)

What are your predictions for 2015 and the remainder of the presidential term?

As there aren’t sufficient currency reserves for imports, and the government is finishing off the productive sector, everything suggests that scarcity is going to get worse.

Property rights are the fundamental base for generating wealth — not just money, but goods, services, and people with acquisitive power circulating freely. So if these rights aren’t respected, and there’s no confidence among investors, then greater shortages will lead to an increase in poverty and social conflict.

There will be increasingly greater desperation because people won’t be able to get medicine and food, and instead of correcting the situation, the government promotes more socialism, planning, and disrespect for property. As a result, it’s the only one responsible.

The Venezuelan Constitution doesn’t establish central planning or a Stalinist socialism. What it decrees is a social market economy, the model followed by countries like Germany and Sweden, where there’s a combination of respect for private property and economic freedom, with the state empowered to promote those rights and occasionally act in those areas where the market isn’t enough. This is the synergy that’s needed, and it’s already in the constitution.

A possible increase in unrest in Venezuela is even more worrying with the new resolution which permits the use of lethal force to contain peaceful demonstrations.

What international opportunities are there to denounce the economic measures taken by the Venezuelan government?

In the Property Rights Observatory, our objective is to document the greatest possible number of cases of disregard for property rights, above all so users of the the country of property-owners page can find out what happened in specific cases, and realize that it’s damaging from a judicial and economic point of view. It doesn’t resolve anything or increase anyone’s quality of life; instead, it diminishes both.

We’re joined by the victims of these kinds of violations, because many national tribunals have been politicized, and its important to prevent impunity, silence, or fear over these kind of actions.

It’s true that, in the recent supermarket seizures, there’s a fear that the situation will get worse and you’ll be thrown in prison. But it’s important to raise one’s voice so that tomorrow, when there’s an institutional change, properly functioning tribunals can return to the case and dispense justice.

It’s not a question of simply returning what was illegally taken, but also making reparations. A day will come when Venezuelans will have to confess to what they have tolerated — and in some cases actively supported — and fully compensate the victims of their actions.

From the international point of view, Venezuela broke with the Inter-American Court of Human Rights (IACHR) only recently. However, there’s still the American Declaration on the Rights and Duties of Man, a judicial statement made by the Inter-American Commission (CIDH) of which Venezuela is still a part. And although its resolutions aren’t binding on the government, they set a precedent, and future governments will have to fall in line with them, as Peru has done.

But if victims don’t raise their voices, these cases will remain in absolute impunity, justice will never be done, and there will be no reparations.

Translated by Daniel Duarte. Edited by Laurie Blair.

Sabrina Martín Sabrina Martín

Sabrina Martín is a Venezuelan journalist, commentator, and editor based in Valencia with experience in corporate communication. Follow @SabrinaMartinR.