It’s time to take a break from my search for the meaning of the nation and turn my focus to specific countries. I will start with Venezuela, which has been experiencing a political and economic crisis for several years.

I spent a good deal of time in Venezuela in the 1990s. The reason for my being there was not clear, then or now, but it gave me some perspective on what’s happening in the country today. My first flight into Maiquetia airport was at night. On the approach, I could see a mountain, all lit up with what appeared to be lights lining the streets of the capital, Caracas. As we landed and deplaned, I realized that it was not Caracas at all that I was looking at.

It turned out that I was quite a distance from the capital, and the marvelous city I thought I had been watching was actually a shantytown, or a barrio. The mountain was actually a hill and the lights were lining the jagged paths between the settlements. They were powered by stolen electricity, as hundreds of illegally attached cables hung from electrical wires, running into the barrio randomly scattered. The possibility of catastrophic fire seemed a certainty, yet the residents managed to live their lives, diverting water in pipes and handling sewage the best they could. The barrios housed the unemployed and criminals, but it was also the place where working stiffs raised families. They mingled with the rest of the city during the day and then went back to the barrio and their families at night.

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On occasion, I was invited to have lunch at one of the most beautiful places I have been in my travels. It was an exclusive club, historic and meticulously maintained, that overlooked the city. The men and women were dressed to perfection in a way that spoke of old money. I was told that this was the club of the “owners of the valley.” I was also told that Caracas had once belonged to only a few families. On my visits, I could see business being conducted at one table, politics at another, and the next generation being introduced to each other at the third. I remember the hush that enveloped the club. There were no loud voices, nor any tension to be seen. It was a place of casual power.

I also had the opportunity to visit the state-run oil company, PDVSA, which was the engine powering the Venezuelan economy. The facility was well-maintained. The people who worked there were engineers, marketers, financial managers and public affairs personnel. But when I spoke with the people at the top, the illusion of technocracy vanished. These were not the owners of the valley or inhabitants of the barrio. They were tough, smart politicians who knew surprisingly little about the petroleum business but a great deal about how PDVSA fit into the rough-and-tumble world of Venezuelan politics. That was why they were there. A few floors down you could talk to a petroleum engineer who graduated from Texas A&M. On the top floor were what I would call the well-connected “hard men” who ran the company.

Some were clearly part of the established elite, but others had muscled their way to the top in alliance with the elite, an alliance that was clearly tilting to the hard and not particularly quiet men. But the entire edifice was built on two foundations. One was the experts who kept the oil flowing. The other were those living in the barrio, needed for the grunt work of the economy but excluded from any of the pleasures.

There is much more to Venezuela, from Lake Maracaibo to the deep jungle that covers much of the country. But in the 1990s, the barrios, the descendants of the owners of the valley, the hard men who controlled PDVSA, and the technocrats who kept it running seemed to me its center. But the center couldn’t and didn’t hold.

Hugo Chavez became president through the support of the people of the barrios. But the barrios had their own political leaders – the heads of the gangs that controlled the neighborhoods. Chavez couldn’t win the support of the barrios without the approval of the gang leaders, and so Chavez had no choice but to deal with them.

The people of old money were beyond Chavez’s reach. Much of their wealth was in the United States, where they also had citizenship. Many of them worked with Chavez; having gone through many chapters of Venezuelan history, they saw Chavez as just another chapter.

Chavez, however, had trouble bridging the gap between political promises and social reality. He came to power speaking for the barrios, but his debt to the powers in the barrios was substantial. They wanted money, and they wanted it now. Chavez didn’t fully trust the military command structure (he blamed them for not preventing the 2002 coup). He therefore needed the barrio toughs, who would support him only to the extent that he funneled aid to them. A new ecosystem emerged, dominated by the alliance of Chavez and the rulers of the barrios. The problem for Chavez was getting money to maintain this system.

Gutting the old money that remained had to be done gently. It maintained the all-important international financial relationships Venezuela had always relied on, so Chavez had to turn to the same source that the old political elite used, PDVSA. But Chavez’s need for money was more intense than in the old regime. He had to keep the barrios happy, and that was expensive.

Chavez started diverting more and more money from PDVSA, and in so doing, he cut into the standard of living of its employees. They were at first hopeful about Chavez, then resigned to more of the same, then frightened by the empowered barrios and the people sent to squeeze PDVSA. There was a vast diaspora of PDVSA employees, who can now be found in oil companies around the world. The problem this left for Chavez was that without PDVSA’s professionals, the company declined. The harder Chavez squeezed, the less he got. His supporters expected rewards he increasingly could not deliver.

The barrios were restless, and the middle class and the old money had fled. Enter the Cubans. In exchange for discounted oil, Cuba acted as a bodyguard for Chavez’s regime. The Cuban operatives were tough, trained and not eager to be obvious. And so, his regime, now led by Nicolas Maduro, survives to this day, supported by the Cubans and those in the barrios who still expect to be rewarded for their loyalty.

In the end, the barrios of today are similar to those I saw when I first arrived. The owners of the valley now sit in clubs in California or France, having timed their exits wisely. It was the deterioration of PDVSA that did the regime in. But Chavez had no choice. He was elected by promising more than he could deliver to men who didn’t like to be disappointed.

Perhaps the best ending in this story is the tale of the hard men at PDVSA and their political allies. In 2002, they arranged a coup d’etat against Chavez. Chavez was held on an island off the Venezuelan coast, until he suddenly showed up back at Miraflores Palace. The story goes that the coupsters had been arguing over what cabinet positions they would take. They didn’t make certain Chavez was safely under guard, so Chavez got back onto the plane and had himself flown back to the capital. The coup failed, and Chavez continued to rule until his death in 2013.

And that story tells us a great deal about the realities of Venezuela.

George Friedman
George Friedman is an internationally recognized geopolitical forecaster and strategist on international affairs and the founder and chairman of Geopolitical Futures. Dr. Friedman is a New York Times bestselling author and his most popular book, The Next 100 Years, is kept alive by the prescience of its predictions. Other best-selling books include Flashpoints: The Emerging Crisis in Europe, The Next Decade, America’s Secret War, The Future of War and The Intelligence Edge. His books have been translated into more than 20 languages. Dr. Friedman has briefed numerous military and government organizations in the United States and overseas and appears regularly as an expert on international affairs, foreign policy and intelligence in major media. For almost 20 years before resigning in May 2015, Dr. Friedman was CEO and then chairman of Stratfor, a company he founded in 1996. Friedman received his bachelor’s degree from the City College of the City University of New York and holds a doctorate in government from Cornell University.