[Editors note: Nairobi bureau chief Kevin Sieff and Mexico City bureau chief Josh Partlow recently took reporting trips to Angola and Venezuela, respectively. This a transcript of a conversation they had shortly after those trips about the collapse of petro-states.]
Kevin Sieff: You got back from Venezuela recently. I got back from Angola recently. Both places are suffering deeply after the price of oil crashed. But in pretty different ways, I think. What struck you on this trip about Venezuela’s descent?
Josh Partlow: Yes, I was in Venezuela, mostly in Caracas but also in some more rural areas about an hour east. The situation there seems to be steadily deteriorating. Food lines are longer. Stores have fewer products. Unrest is growing, there's been looting, riots. People are hungry.
Those problems have been going on for a long time, but the violence, street protests, seem to be accelerating now.
Kevin Sieff: I know it’s hard to parse — as it was for me in Angola — but do you have a sense of how much of that decline is due to the oil price and how much is due to poor governance?
Josh Partlow: When I ask that question to people who follow Venezuela closely, most tip the scale towards poor governance. But oil's a big factor, too. The government under [former President] Hugo Chavez did a lot to discourage domestic production of food and lots of other products, by nationalizing businesses, fixing prices, importing basically everything the country needed. So when the oil prices dropped by more than half last year, they didn't have much ability to make things in Venezuela. And they couldn't afford to buy as much abroad.
Kevin Sieff: That’s the same thing I saw in Angola, and it’s one of the reasons I thought it would be interesting to compare notes. There’s plenty that sets the two countries apart, but ultimately they’re both examples of what happens to commodity-dependent, emerging economies that failed to diversify.
In Angola, the government basically got a free pass for a decade because the price of oil was high and they were extracting so much. In 2007, the economy grew by an insane 24 percent. It just masked how poorly managed the country really was, because it was drowning in money. And now those deficiencies are all visible, sometimes in really tragic ways.
Josh Partlow: What kind of shortages are there in Angola?
Kevin Sieff: In June, there wasn’t a single HIV test available in the country. There were no needles or surgical gloves in the hospitals. There was no malaria medication, even though 1.3 million people came down with the disease in the first three months of the year. And like in Venezuela, food is becoming a real problem.
Can you remind me what Venezuela was like when Hugo Chavez was sailing on a high oil price? I remember that one time he said he was going to offer aid to impoverished Bostonians …
Josh Partlow: When you get to Caracas there's a feel of faded glory. It looks like one of the more developed cities in Latin America — nowhere near the splendor of Buenos Aires or Rio, but more developed than Central American capitals. There are plenty of high-rises, mansions, a gondola and elevated train line. But it's all looking worn out and run-down now. Chavez also poured the oil money — well above 90 percent of what Venezuela earns from exports — into lots of different programs for the poor. Direct subsidies, scholarships, credits — and heavily subsidized food, medicine and almost-free gasoline. I talked to people on this trip who could rattle off the government programs their families used to receive, for women, disabled children, money to help build their homes and send their kids to school. A lot of that has dried up now. Oil production has fallen to its lowest level since 2009, mostly because Venezuela can't afford to pay its oil services workers. And [President Nicolás] Maduro's government has cut back on a lot of imports, too.
Kevin Sieff: How would you compare it now to other countries in Latin America that are, by other measures, much poorer, like Honduras or El Salvador?
Josh Partlow: It's a lot more desperate now. Honduras and El Salvador have a lot of problems with poverty, violence, corruption, but these are problems that have been around a long time and people have adapted to them (or fled for the United States and other neighboring countries). Venezuelans haven't been accustomed to having to wait for hours to see if the supermarket has eggs or milk or cornmeal. Some of the wealthier people I met can find ways around the crisis, by ordering food online that gets shipped by boat from Miami. But most people are facing pretty grim times, either skipping meals or cutting back for middle-class people or, when it comes to the poor, starting to hunt and forage to find what they need to survive.
Josh Partlow: How are Angolans coping with their problems?
Kevin Sieff: I think poor Angolans are probably more accustomed to coping with a lack of food and services. But things are getting noticeably worse for them, and the divide between the wealthy and the poor is starker than ever. In December, the country’s mobile phone company paid Nicki Minaj $2 million to perform. At the same time, many people there can’t afford three meals of rice [a day]. It’s now literally home to the wealthiest and poorest people in Africa, and sometimes they live just a few miles apart.
Let’s talk about your own experience there. Where did you eat? Are the restaurants open?
Josh Partlow: There are restaurants open, including some fancy ones, that on the surface seem to be navigating the crisis. In the lobby of my hotel last week there was a fashion show with all these Venezuelan models in evening gowns and people sipping fancy cocktails. So it's not all gloom and doom yet. But a lot of places have closed just since I started visiting last year. A coffee place I went [to] that didn't have coffee cups (only plastic ones) last year, is now closed. The last time I was in Caracas I ate some arepas (empanada-like snacks) off the street with some rotten meat and I got sick. So I was more careful this time.
Kevin Sieff: Ouch.
Josh Partlow: Yeah, it was a rough plane ride home.
Kevin Sieff: I was also navigating those two strange sides of a petro-state — my meetings with government officials and businessmen were in some of the nicest offices and restaurants I’ve seen anywhere in Africa. There’s this corniche downtown that could be in Dubai. But then I went to a cemetery in a poor part of town, and it was just an endless procession of people who had died of preventable diseases.
I felt like if it were in a country that was objectively poorer, there would be massive humanitarian intervention, but Angola is still bizarrely seen by the U.N. and others as a country that can take care of its own. So there’s no intervention, and very little assistance at all.
Is anyone stepping in to help Venezuela? Seems like that alternative would be pretty dire.
Josh Partlow: So far, not really. The U.S. envoy, Thomas Shannon, was in Venezuela in June to meet President Maduro, and there was some speculation that maybe the U.S. will offer some type of humanitarian aid. But the Venezuelan government has rejected foreign aid in the past and anything that looks like an acknowledgment that the socialist model has failed will probably be a last resort for this government. They've also spent nearly two decades bashing the United States, the IMF, etc., and warning against foreign intervention. So a big obstacle to receiving aid is how the Venezuelan government sees itself.
Kevin Sieff: Sounds like a mess. Are people asking what will happen if the price of oil remains low and conditions don’t improve? There must be an expectation of rising malnutrition and disease?
Josh Partlow: Venezuela's foreign minister denied that there was a humanitarian crisis in the country, but lots of normal people insist that hunger, malnutrition and disease are very real. The hospitals are also in a terrible state, lacking all sorts of basic supplies, which I saw a few months ago when we looked at the Zika outbreak. The oil minister said not too long ago that Venezuela's state oil company could avoid default if the price of oil stayed above $50 a barrel. But even if oil prices clear that bar, the more pressing humanitarian concerns aren't going away anytime soon.
How would rising prices change the situation in Angola?
Kevin Sieff: Yeah, that would definitely be a big relief. But $50 a barrel for an extended period would still put the country in a tough spot for some time.