Venezuela has raised gas prices by 6,200%, rising from 9.7 centavos to 6 bolivars (about $1) a litre.
It has prompted people inside the poverty-stricken country to wonder whether another disaster will occur, one resembling the riots and looting in February 1989 that followed the last time the government raised gas prices.
They call what happened “El Caracazo,” and hundreds of Venezuelans died in the violence.
Caracazo is a melding of the words Caracas (the capital of Venezuela) — the protests erupted outside and spread into Caracas — and a conjunction that essentially means “huge disaster.”
So no one wants to see this happen again.
As in 1989, global oil prices have fallen dramatically and the country’s finances are a disaster. Johns Hopkins economist Steve Hanke estimates that the country’s inflation rate has hit 392%. The government puts it at over 180%. Everyday items like toilet paper have been scarce for years, and there’s talk of a default looming in 2016.
There are also political parallels between now and 1989.
In 1989, the Caracazo was triggered by a transfer of power to President Carlos Andrés Pérez. He moved the country away from the policies of the socialist government that preceded him and moved to privatize state firms and take loans from the International Monetary Fund. Raising gas prices was part of the overhaul.
Today, while the socialist party still has the executive office in Venezuela, it has lost the legislature. The country’s economy is in such a dire state that the government had little choice but to raise gas prices.
That is what has Venezuelans on Twitter arguing over whether there will be another disaster.
This is what it looked like:
“27 years ago the rise in gasoline’s price is what set off The Caracazo.”
Some say the first Caracazo was orchestrated by the Cuban government, which wanted to overthrow Pérez.
“The Carcazo was orchestrated by Havana with many years of anticipation.”
Since the Cuban government is friendly with Venezuela now, some, like this journalist, think that means there won’t be another Caracazo.
“A fact: there would not have been a Caracazo — it was the product of leftists with instructions from Cuba and a lot of social inequality.”
Un dato: no va a haber caracazo pues aquel fue producto de la organización de izquierda con instrucciones cubanas y mucha ingenuidad social
— Ivo Hernandez (@IvoCaracas) February 18, 2016
Others, who oppose the government, are saying bring it on. They have taken up the opposition hashtag #eltiempoyallegovzla, which means, “The time has come Venezuela.”
“YOU READ IT #thetimeisnowvzla #menever #ZAYNonFallon #ifitlovesyouthen Caracazo”
— GIORDANI ANGELINI (@GIORDANIJOSE) February 18, 2016
Some people are just creating memes, saying they’re waiting for the Caracazo to hit.
“All of us waiting for The Caracazo.”
Back in 1989, the protests were made worse when the military was ordered to quell the violence. Brian Dean, a partner at ACG Analytics, doesn’t think President Nicolas Maduro has the political capital or military backing to make that happen again.
Here’s what he told Business Insider about it via email:
I am doubtful Maduro has any hounds to be released with the possible exception of illicit goon squads — asking the military to crack down could expose his weakness within the officer corps of the armed forces as they might simply say ‘no’.
His moves on gas prices and the new finance minister in recent days suggest overtures on the economy while he digs in his heels on amnesty legislation for political prisoners, including the country’s most popular political figure, Leopoldo Lopez.
Public sentiment has changed dramatically since 1989. The Caracazo responded to Venezuela submitting to an IMF plan in order to qualify for credit. The terms were strictly “liberal”; reduce lending rates, float exchange rate, price liberalization, raise utility rates, eliminate tariffs, etc. Today, I think more Venezuelans recognise the merits of re-engaging with global markets after the utter failure of the Bolivarian Socialist alternative.
Lets hope Dean is right. The Caracazo is part of what inspired a young Hugo Chavez — and we know how that turned out.
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