World Predictions for 2010
Chávez at a Havana summit in December
The bullish global economy and skyrocketing demand for crude oil until late this decade played into the hands of Venezuelan strongman Hugo Chávez. But the recession took the wind out of Hurricane Hugo, and now Chávez’s quest to convert Latin America to “21st-century socialism” is falling apart. A carnival of government spending and a disastrous price freeze promise to stoke inflation. Prices, up 30 percent in 2009, will head even higher in 2010; inflation falls hardest on wage earners and the poor, Chávez’s choice constituency, and decimates public investment in roads and electricity. As rolling blackouts, mounting government debt, and the Cold War with Colombia—Venezuela’s biggest trade partner after the U.S.—grow worse, the problems will paralyze the economy, hobbling factories and emptying supermarkets. Fresh milk, beef, and floor fans become luxury items. Chávez declares war on the daily bath, “a bourgeois indulgence.” Even with oil prices rebounding, Venezuelan GDP tumbles for the second year running, shrinking 2 percent in 2010 as the rest of the world pulls out of recession. Privation stokes despair and crime; the murder rate in Caracas, already the hemisphere’s most violent city, goes off the charts. The Bolivarian leader’s vaunted popularity tumbles. The mood among the humblest Venezuelans, who put Comandante Hugo in power in the first place, and the disgruntled middle class, accustomed to Western-style consumerism, turns mean. The military steps in to depose Chávez and restore order, as 21st-century socialism spins toward the familiar 20th-century tableau of scarcity, poverty, and chaos.
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