Linda Poon is an assistant editor at CityLab covering science and urban technology, including smart cities and climate change. She previously covered global health and development for NPR’s Goats and Soda blog.
In its accelerated growth, the country failed to generate enough energy to meet sustained demand.
In battling its power crisis, Venezuela seems to be pulling out all the stops—well, almost. First, President Nicolas Maduro shut down the country for a week in March, giving citizens an extra three days off of work over the Easter holiday. Then it made every Friday a holiday for the next two months as part of a 60-day plan to curb electricity usage.
Earlier this April, the president called on women to stop using hairdryers, and to save them only for “special occasions.” He also asked citizens to hang their clothes instead of using dryers and to embrace the heat. Most recently, he rationed electricity for 15 shopping malls and announced that he was changing the time zone to save power—something his predecessor Hugo Chavez did in 2007.
But power outages, which have gone on for years, are only part of Venezuela’s problems. “It’s not just electricity; it’s the whole infrastructure of the country that’s crumbling.” says Jean Daudelin, a professor of development and conflict at Carleton University. “It’s the road systems, it’s the ports, it’s the water, it’s everything.”
Venezuela relies heavily on hydroelectric power from the Guri Dam it built in the 1970s and 1980s, but modernizations and maintenance have been spotty. Earlier this month, water levels hit a historic low of just 797 feet, according to Reuters.
Unlike other countries that use hydroelectric power, Venezuela doesn’t have a sufficient back-up plan for when the water runs dry. Corruption under the Chavez presidency meant that a large part of the money that was supposedly invested in alternative energy ended up in officials’ pockets, though it’s unclear how much. And many of the innovations in power production were not updated to keep pace with demand, or showed problems in the early stages of development.
Venezuela currently grapples with a poverty rate between 75 and 80 percent, but it did use some of the revenue from oil exports in social programs intended to improve the quality of life for its poorest citizens. Venezuela, which holds one of the world’s largest oil reserves, once enjoyed high oil prices. “They thought, 'Well, because we are one of the wealthiest oil producing countries in the world, we can just buy our way out of this ... instead of developing other forms of energy, income, and economy that could substitute for oil,” says Victor Silverman, a historian at Pomona College
The government, for example, heavily subsidized fuel and electricity. Gasoline could be bought for mere cents on the gallon—the cheapest price in the world—and Venezuelans consumed electricity at a rate higher than many of their Latin American neighbors.
But the government failed to invest enough in the energy sector to match the demand—due at least partly to internal corruption. ”They made serious mistakes in getting [out of poverty]; they needed to move a little more slowly and devote more of their resources to these basic investments,” says Silverman. “That's why the ratio between electricity generation and consumption got so out of whack.”
When oil prices started to sag, the dip in revenue left the government cash-strapped. Yet it was still paying $12.5 billion in fuel subsidies alone. Against a volatile political landscape, Maduro has repeatedly refuse to dramatically scale back those subsidies. (The last time Venezuela eliminated gas subsidies, in 1989, it led to the caracazo, a wave of violent protests that left thousands dead and led to the eventual collapse of the previous government.)
“Maduro won’t give his enemies a card that they could use to draw him out,” Daudelin tells CityLab. “The government is extremely fragile and needs to keep a large amount of people happy, so it spent the money there in subsidies and social services, and in corruption.” In February, for the first time in 20 years, the government raised gas prices by 6,000 percent—a staggering number until you realize that a tank of gasoline still costs less than a quarter. But that’s probably as far as Maduro will go, he says.
So what can the government do at this point? “I honestly can’t see a way out for them, or a place for long-term solutions,” says Daudelin. “[Maduro is] stuck.” Silverman agrees, adding that what Venezuela needs now more than ever is luck—in the form of heavy rainfall.
EDITOR’S NOTE: This post has been amended to include the role of government corruption in limiting development and infrastructure funding under Chavez’s rule.