It is hopefully only a matter of time before Juan Guaido inherits the ruins of Venezuela. But Ben Powell and Rafael Acevido warn that the road to recovery will be long and hard under the socialist policies that Guaido will pursue.
Unfortunately, Guaido and the allied political parties belonging to the Democratic Unity Roundtable — known as Mesa de la Unidad Democratica (MUD), or “Frente Amplio” (Broad Front) — were more united in their opposition to Maduro’s leadership than to the failed socialist policies. In fact, Guaido’s political party is a member of the Socialist International and he and his allies would like to return to the type of “light socialism” Venezuela practiced before Chavez came to power in 1998.
Those policies took Venezuela on a downward trend from 1957 when Venezuela’s real GDP per capita was half of that in the United States to the situation in the 1990s with the average income only 15 percent of the US level.
Venezuela needs true market reforms: privatizing state-owned companies and assets, including the state-owned oil company (PDVSA); eliminating such corrupted institutions as the Bolivarian National Guard; reducing government personnel; giving administrative and budgetary autonomy to counties; replacing steeply progressive taxation with simple flat tax; eliminating international trade barriers, and opening the road to monetary freedom by dollarizing.
They point to the Republic of Georgia following the 2004 Rose Revolution. With the suite of reforms favoured by Powell and Acevido Georgia is now ranked the seventh most economically free country in the world with income per capita up 40 percent, infant mortality down 30 percent and employment up 10 percent. They could have suggested Estonia as an inspiration as well.
If Venezuela is going to get off “the road to serfdom” and back on a path towards prosperity, Guaido will need to give voice to Venezuela’s market-oriented opposition groups—such as Rumbo Libertad and Movimiento Libertad Venezuela—and embrace real reform.
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