34 The Americas The EconomistFebruary 13th 2021
21are now well stocked. A semi-dormant Fer-
rari dealership plans to open a showroom
in Caracas. In the countryside, vast tracts of
land that Chávez once promised to give to
impoverished campesinosare being bought
by people who got rich from the crony capi-
talism practised by his successor. One
farmer in Bolívar state, in eastern Venezue-
la, says that he was offered $5m in cash to
sell. He declined.
Parts of the state sector are shrinking, as
is about to happen in Cuba. pdvsa, the de-
crepit oil monopoly, which in 2012 em-
ployed 150,000 people, now has a work-
force of 111,000, according to Iván Freites,
secretary of the fuptvoil union. pdvsahas
reportedly offered small domestic contrac-
tors rights to operate its oilfields. Many ex-
pdvsaworkers are among the 5.4m Vene-
zuelans, 18% of the population, who have
left the country since 2014. (On February
8th Colombia offered residency rights for
ten years to nearly 1m Venezuelans who mi-
grated to the country.)
Cuba and Venezuela are acting out of
desperation. Venezuela has been in reces-
sion for more than six years (see chart). Its
debt soared under Chávez, mismanage-
ment at pdvsa caused oil production to
slump and sanctions imposed by the
Trump administration in 2019 clobbered
oil exports. Rampant corruption boosts the
market for supercars but bankrupts the
state. “This government is doing the sort of
things that would be demanded under a
classic imfrestructuring, and sanctions
have made it politically possible,” says a
Venezuelan businessman.
Cuba’s graft does not match Venezue-
la’s. Its officials “are mostly punctilious ad-
ministrators. Corruption tends to be an
afterthought,” says a Western business-
man. But its economy is similarly blasted.
gdpshrank by more than 11% in 2020, ac-
cording to the government. Exports of sug-
ar are close to their historic lows. In 2019
the Trump administration restricted travel
by Americans to Cuba and the sending of
money by Cuban-Americans to family
members on the island. The United States
has imposed sanctions on operators of
tankers that carry oil from Venezuela to
Cuba. Last year it forced Western Union, an
important conduit for remittances, to
shutter its shops in Cuba.
Sanctions plus covid-19 cut the number
of tourists from an expected 4m to 80,000
last year. Luxury hotels in Havana, built by
the army with help from mysterious (per-
haps Venezuelan) loans, stand empty. For
ordinary Cubans, food is in short supply.
Neither regime is planning to leap free
of socialism in a single bound. The imf
does not lend to Venezuela and Cuba is not
a member of it, which means they will not
get the sort of aid available to most coun-
tries that undertake painful reforms. Vene-
zuela’s government will continue to fi-nance its massive budget deficit by getting
the Central Bank to create money.
Cuba’s president, Miguel Díaz-Canel, is
more constrained than Mr Maduro. He is
“at best a closet reformer”, says the Western
businessman. Soviet-era officials still have
powerful jobs. They include Raúl Castro,
Fidel’s brother, who is secretary-general of
the Communist Party. Mr Díaz-Canel will
try to avoid antagonising them at least un-
til April, when he is expected to take over
from Mr Castro.
For now, the government is maintain-
ing control of all large industries and
wholesale shops, which will restrict
cuentapropistas’ options for obtaining sup-
plies. The state will continue to monopol-
ise professional services such as architec-
ture and accountancy, a big
disappointment. Talk of a law to enable en-
trepreneurs to incorporate has gone quiet.
The pandemic and American sanctions
mean that neither Cuba nor Venezuela is
likely to enjoy a market-led boom anytime
soon. Ventures requiring large invest-
ments will have to wait. Cuba’s continued
restrictions on entrepreneurship in vast
areas of the economy will blunt its growth.
But ingenious Cubans will exploit to the
full the new opportunity to enter any pro-
fession that is not specifically prohibited.
Mr Maduro and Mr Díaz-Canel will not
offer their citizens political freedoms to
match their new economic ones. They look
to China and Vietnam, where repression
and rising prosperity co-exist, rather than
to democratic neighbours. “Both countries
are changing their economic policies to
certain degrees. But they are not changing
their political regimes,” says Orlando
Ochoa from Economista Consultor, a con-
sultancy in Caracas. “That is the whole
point.” Deep down, Cuba and Venezuela
will continue to have much in common. 7Socialist swimmersSources:EconomistIntelligenceUnit;pressreportsEstimateEstimateVenezuelaCuba200-20-40
2000 05 10 15 20GDP, % change on a year earlier10
0
-10
-20
-30
2000 05 10 15 20Budget balance, % of GDPVenezuelaCubaY
ordan eduardo güetiochampioned
the rights of the Nasa people, an indige-
nous group in Cauca, in western Colombia,
to which he belonged. On February 2nd
men in military fatigues stopped him and
his father on their motorcycle on the out-
skirts of Corinto, in northern Cauca. They
let Mr Güetio’s father go, but shot the son
dead. He was less than 30 years old.
Activism has long been a dangerous vo-
cation in Colombia. From the 1980s to the
early 2000s right-wing paramilitary
groups murdered trade unionists, Com-
munists and peasant leaders. The farc, a
guerrilla group that demobilised after a
peace deal with the government in 2016,
kidnapped farmers who opposed them.
Peace, it was thought, would bring safe-
ty for social leaders, as Colombians call ac-
tivists. In fact, it has brought more peril. At
least 400 rights-defenders have been killed
since 2016, according to the un’s human-
rights commissioner. Colombia’s ombuds-
man has documented 710 such murders
during the same period. Last month 19 ac-
tivists were killed or went missing, accord-
ing to Indepaz, a think-tank.
One reason may be that peace has en-
couraged more activists to make more de-
mands, says Juan Carlos Garzón of the
Ideas for Peace Foundation, a think-tank.
They campaign for causes that were over-
shadowed by war, such as the rights of in-
digenous and Afro-Colombian people,
land reform, protecting the environment
and corruption-free government.
A more obvious reason is the rise of
armed groups that are fighting for control
of territories vacated by the farc. These in-
clude the elnand the eplguerrilla outfits
and gangs composed of farcand paramili-
tary fighters who refused to disarm. In Na-
riño, in south-western Colombia, drug-
trafficking groups attack advocates of a
government programme that encourages
farmers to switch from growing coca, used
to make cocaine, to legal crops like cacao.
Most activists slain in Cauca were in-
digenous or Afro-Colombian leaders trying
to expel armed groups from territories re-
served for them. In Norte de Santander, in
the north-east, the elnand the eplare at
war with each other and with local wor-
thies, such as football coaches, whom they
suspect of supporting their foes.
The state remains absent from large
swathes of Colombia’s territory. The gov-
ernment sends soldiers to kill drug-traf-BOGOTÁ
Why so many social leaders are
being murderedColombiaActivists amid
anarchy