Venezuela Disaster: Lessons for India & Beyond
India and Venezuela are worlds apart. New Delhi lies over 14,250 kilometres from Caracas, the vibrant capital of South America, now in the global spotlight. Yet the sudden, startling developments unfolding there offer valuable lessons for India and beyond. One: Pristine phrases such as democracy, human rights, international law, and enlightened governance often lack practical relevance in the real world. Instead, they function as rhetorical devices to mask uncomfortable truths, conceal territorial greed and ideological ambitions, and serve as a convenient smokescreen to justify the expansionist policies of neo-colonial powers.
The latest US strike on Venezuela is not an aberration but a brutal reaffirmation of a timeless doctrine that continues to govern global affairs – might is right. Worse, it is safe to assume that civil society would be doing nothing about it – except pontificating about the need to ensure peace in the region and pleading for dialogue to end the crisis. Two: There is simply no substitute for scholarship and hard work when it comes to eradicating mass poverty and sharing prosperity. Policies and rhetoric that prioritise wealth redistribution over wealth creation ultimately lead nations down the path of economic disaster and political subjugation. What makes redistribution, sans any emphasis on the generation of production, axiomatically dangerous is its moral absolutism, which can push democracies to drift inexorably, slowly, and legally towards economic chaos and ruin.
When inequality is framed not as an outcome of complex systems but only as evidence of theft and corruption by entrepreneurs, making money becomes illegitimate and morally degrading in popular public perception. Soon, those warning of fiscal prudence are labelled elitist, stooges of capitalists, and demonised. Defending markets is painted as working for modern Shylocks. Three: The United Nations and global public opinion count for nothing on the ground. By the early twentieth century, it was widely believed that civilisation had finally risen above the barbarism of war. History, however, proved otherwise.
The First World War (1914–18) devastated humanity. In its aftermath, the League of Nations was created to safeguard peace, but it soon collapsed. The Second World War (1939-45) followed with even greater ferocity. Only then, in 1945, was the United Nations established with the stated aim of preventing future global conflicts. But has that objective truly been achieved? The UN continues to be a sheep in sheep’s clothing. It is nothing more than a glorified debating club. Four: Most countries have their own quota of leaders who are in a mindless pursuit of power and come up with bizarre plans that promise the moon to ordinary people, fooling them into voting them to power. For understandable reasons, these leaders fail to deliver and then shapeshift overnight into ruthless dictators. Venezuela has had leaders who have ruined the country through their quixotic policies, and it is now fast heading towards becoming a US colony.
Hugo Chávez, the country’s President from 1999 until his death in 2013, spoke about inequality, oligarchs, imperialism, and the misappropriation of national wealth. He argued that oil revenues belonged to ‘the people’, not to private companies or foreign partners. Redistributing wealth became the norm.
What happened next is now etched into history. Over 1,000 private enterprises were seized, often without compensation, transforming markets into controlled regimes. Price and profit controls replaced the natural flow of commerce. Currency restrictions criminalised entrepreneurship while favouring those close to power.
The central bank was reduced to nothing more than a printing press, primarily used to fund short-term government expenditure without regard for monetary stability. Oil wealth, instead of being strategically invested to build sustainable infrastructure, was squandered on immediate consumption, such as consumer goods and luxury projects. Institutions across the nation were hollowed out and weakened, often under the guise of responding to popular will, but in reality their core functions were neglected and eroded.
The outcome was staggering: living standards plummeted by 74 per cent, hyperinflation spiralled out of control, rendering currency virtually worthless, mass starvation spread across multiple regions, and 7.7 million people fled their homes as refugees - marking the most significant peacetime economic collapse in modern history.
Taken together, this web of anti-market measures significantly hamstrung domestic production across key sectors such as agriculture and manufacturing, causing the country to become highly reliant on imports - even for essential goods like rice - that Venezuela had once exported in substantial quantities.
When the state becomes the primary wealth distributor, people seeking riches begin to chase those in power - bureaucrats and politicians - instead of honing entrepreneurial skills, fostering innovation, or striving for excellence. When redistribution is driven by identity, lasting grievances overshadow meaningful political and ideological debates.
Rahul Gandhi has intensified his call for wealth redistribution in India, positioning it as a key part of the Congress party’s efforts to combat growing inequality. Anchored in the principle of ‘jitni abadi, utna haq’ (rights proportional to population), his proposal has ignited lively political debates across the nation. Framing wealth redistribution as a moral crusade, Rahul aims to portray himself as the moral voice and conscience of Indian democracy.
The call for a caste census tied to wealth redistribution shifts the focus of economic policy from boosting productivity to entitlements, and from promoting growth to simple arithmetic division. This is precisely how Chávez got started - by turning economic issues into moral judgements.
No society has redistributed its way to prosperity. Every successful welfare state - from Germany to Japan - redistributes surpluses. Chávez redistributed revenue while destroying the source of revenue. Indira Gandhi too tried to do the same, with disastrous results for herself and the country. There is nothing original in what Rahul is trying to do. It is a time-tested, failed idea.
Venezuela’s situation is a clear example of a recurring tragedy, not a one-off event. Its economic meltdown, political unrest, and humanitarian crisis highlight the devastating impact of a complex mix of corruption, external meddling, and internal mismanagement, all rooted in irresponsible populism. Any nation naive enough to buy into populist promises and prioritise identity-based wealth distribution over genuine wealth creation risks a similar downfall. The lessons for India and the rest are loud and clear.
The writer is an eminent columnist, former Chairman of IIMC; views are personal
