Puerto Rico in the mirror of Venezuela?

Representatives of the private sector recently organized a Political Action Committee (PAC) under the name "Democracy is Prosperity". The organization seeks to support political candidates who embrace free market and business values aligned with a vision of economic development away from government intervention and populism.

The entry of the private sector into the political arena represents a fundamental change in the historically passive attitude of businessmen in Puerto Rico's governance, which is increasingly moving away from the fundamental principles of economic freedom. The political activation of businessmen also occurs at a time when several countries in the Latin American region have turned to openly leftist governments, influenced by the totalitarian regimes of Cuba, Venezuela and the Sao Paulo Forum.

Inflation in that country is estimated at 2.355%; the bolivar, the official currency, is technically worthless and has become dollarized, writes Gustavo Vélez (Miguel Gutierrez).

Argentina, Bolivia, Brazil, Chile, Mexico, and more recently Colombia, have chosen socialist and leftist governments.

There is a regional and hemispheric agenda that seeks to shift Latin American countries, including Puerto Rico, to the left, taking advantage of citizen discontent, the socioeconomic inequalities generated by globalization and the lack of a free market economic project that is more sensitive and inclusive of all sectors.

I have previously stated and reiterate that it is urgent to humanize capitalism and articulate a global response to the challenges posed by economic inequalities and the climate crisis.

Venezuela and Puerto Rico

Within the process of radicalization towards the left of neighboring countries, some businessmen and observers of the Puerto Rican reality are beginning to compare Puerto Rico with Venezuela. The neighboring oil country and former benchmark of prosperity in Latin America has been governed since 1999 by a leftist government that was first led by Hugo Chavez and from 2013 to the present by Nicolas Maduro.

The entry of Chavismo into Venezuelan political life occurred in the context of the erosion of traditional political forces, the emergence of great economic inequalities, corruption scandals and the passivity of the private sector in the face of the threat posed by the emergence of populism led by Chávez. In 1992, Chavez, as an army officer, unsuccessfully led a coup d'état against the government of Carlos Andres Perez. After serving time in prison, the then president, Rafael Caldera, pardoned him and Chávez ran as a presidential candidate in the 1998 elections, winning by a wide margin.

Once in power, he gradually began to radicalize his government to the left, including the nationalization of private companies and assets, the elimination of free speech and, supported by Cuba, he led Venezuela towards a socialist state. Although Venezuela had a successful track record as one of the most modern and solid economies in the hemisphere, and at the same time, possesses one of the most important oil reserves in the world, today, the sister country is facing the collapse of its economy and over six million people have left the country.

According to data from the International Monetary Fund (IMF), the Venezuelan Gross Domestic Product (GDP) has decreased from $372 billion in 2012 to about $82 billion in 2022. Inflation in that country is estimated at 2,355%; the bolivar, the official currency, is technically worthless and has become dollarized. A kleptocracy headed by Maduro and his close circle has embezzled $300 billion from the national coffers, according to estimates by opposition groups. Meanwhile, the average Venezuelan is trying to live on a salary of $10 a month.

The similarities that some in Puerto Rico are beginning to raise allude to the fact that, like Venezuela in the late 1990s, here on the island we are facing the erosion of traditional political parties, the apathy and indifference of professionals and businessmen towards politics, social resentments and the strengthening of leftist political parties in the electoral scene.

As in Venezuela, in the past decade, 600,000 people, mostly professionals and people of productive age left Puerto Rico in search of a better future in the United States.

Puerto Rico does not have oil like Venezuela, but the economy receives billions of dollars in federal aid, which provides artificial stability, and mitigates social tensions and class struggle, but this model is clearly not sustainable.

There is an urgent need for a change in the attitude of the productive sectors in light of the clear trends observed in Puerto Rico, and it is necessary to counteract the populist narrative that is underpinning public discussion and many governmental measures. There is an alternative route, but we must build it and call on the whole country to be part of it.

This article was published originally in Spanish by El Nuevo Dia.

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