Venezuela is experiencing critical shortages, prompting concerns that a humanitarian crisis will engulf this oil-rich South American country. Food, medicine, money, electricity and water are all either rationed or unavailable, as Nicolas Maduro’s government confronts deep recession and drought.
But Venezuela’s problems run deeper than an over-reliance on a volatile commodity. Since his election as president in 2013, following the death of Hugo Chavez, Maduro has significantly failed to address chronic problems of economic mismanagement, poor planning, opacity and corruption.
His administration has retained debilitating price and exchange controls that fuel inflation, black markets and shortages. In its ongoing quest to construct 21st-century socialism, the government has continued ad hoc and unaffordable nationalisation programmes.
Billions of dollars may yet be drained from the country in litigation for asset and land seizures, while an accumulation of unpaid bills and contracts have prompted speculation the state oil company, PDVSA, may default on upcoming interest payments on its debts.
No sector better represents the ambitions, limitations and ultimately the failure of Hugo Chavez – and subsequently Nicolas Maduro – than Venezuela’s perennially rationed water. Currently struggling with drought caused by El Niño, the government announced extended Easter holidays in March, and the closure of shopping malls and a reduced working week in April.
These measures were intended to conserve electricity as water levels in the Guri hydroelectric dam, which supplies 65% of the country’s power, has fallen to critical levels.
In 2007, 2010 and currently, Guri’s water reserves dropped to 244 metres above sea level, just above the 240-metre limit at which it has to wind down generation, closing eight turbines at the loss of 5,000 MW.
A troubled history
Venezuela has huge water resources, but in the wrong place. According to official estimates, 85% of water resources are located in the south-east of the country, home to only 10% of the population. By contrast, only 15% of water resources are in the rapidly urbanised north of the country where the bulk of the population lives.
Infrastructure investment in the 1950s and 1960s improved supply, providing 80% of Venezuelan households with access to water. But investment and planning did not keep up with demand and average consumption of an estimated 350 litres per day (450 litres per day among the 4m residents of the capital Caracas).
In 1989 popular frustration with shortages, inefficient services, pollution, clandestine tapping and deteriorating quality standards prompted the formation of a new regulatory framework. This decentralised the state monopoly of water services to ten regional utilities and created a new agency: Empresa Hidrologica de Venezuela (Hidroven).
The overcrowded federal district was served by Hidrocapital, created in 1991, which prioritised renovation of aqueducts bringing water from the Tuy river basin complex. But rolling water bans and social protest continued across the country in the 1990s. Popular antipathy to privatisation of water services made it difficult for the government to generate foreign investment.
The Chavez years
Like so much in Venezuela, water policy changed during Chavez’s presidency. The government took radical steps to address an intensifying water crisis that largely affected residents of the shanty towns – a bedrock of support for the Chavez government.
After a 2001 study by the National Statistics Institute found that 231 of Venezuela’s 335 municipalities had insufficient water and sanitation services, 4.2m people had no access to piped water and 8m lacked adequate sanitary facilities, the Water and Sanitation Law was introduced by presidential decree. In line with the government’s vision of popular empowerment and a “new geometry of power” this law decentralised water policy down to 7,000 community “roundtables” (associations involved in monitoring water at neighbourhood level) linked to the national water company Hidroven.
It became the responsibility of local populations to identify their needs and investment priorities. Running parallel with localisation of utilities management, the government nationalised key sectors, including electricity in 2007.
Chavez’s vision of empowered communities and national energy self-sufficiency has, like the plans of his predecessors in the 1990s failed to deliver improvement. Investment and supply in both water and electricity (an estimated $10 billion investment in water and $60 billion in electricity over the past decade) has failed to keep up with accelerating demand driven by demographic and economic growth.
Management has been poor due to high ministerial turnover and a lack of technical capacity, while administrative waste and profligacy thrived due to poor oversight and limited accountability. As with other examples of Chavez’s vision of community-led democracy, the water roundtables were quickly undone by – among other problems - unresponsive officials.
The country is now at a fateful juncture. Financial collapse precludes any state capacity for large-scale water investment. The country’s ongoing political crisis has pushed questions of resource management and conservation to the back seat.
There could also be dangerous health consequences. Households stockpiling scarce water resources could increase the exposure of an already vulnerable population to mosquito-borne diseases including Zika, yellow fever, dengue and chikungunya.