At the same time, the government continues tightening already rigid exchange controls that have forced private importers to seek an estimated $15 billion in the parallel market in 2008. Since the government intends to restrict access to preferential U.S. dollars even more, analysts project the figure could grow to as much as $27 billion in 2009. This will cause de facto devaluation of Venezuela's bolivar, thus stimulating an even higher rate of inflation.

Hugo Chávez's dream is clearly becoming increasingly difficult to achieve, and progressively punitive to Venezuela's economy and citizens. Although he manipulated a narrow victory in a February referendum allowing his unlimited reelection, popular dissatisfaction and unrest will undoubtedly mount as economic conditions worsen, thus progressively eroding the president's popularity.

Mr. Chávez has so far been able to keep his "Bolivarian revolution" on course, despite periodic electoral reverses and frequent large-scale displays of popular discontent. He has interpreted the referendum allowing his unlimited reelection as a mandate to push ahead with the establishment of authoritarian socialism throughout the economy and society, and he is doing so vigorously.

Numerous observers, including the writers, view the future of Mr. Chávez's touted "Twenty-First Century Socialism" as paradoxically dependent more than ever on recovery of the very free-enterprise system that Venezuela's dictator-in-the-making despises. Capitalism's recovery in Venezuela, however, has a decidedly bleak future as long as Mr. Chávez remains in power. It is indeed highly probable that Minister Giordani will be planning-better said, coping-with the socialism of scarcity in what was formerly the region's wealthiest nation.

The transcending tragedy for Venezuela and all Latin America is that by destroying the country's economy, Hugo Chávez is critically, perhaps fatally, undermining the nation's fifty-year democratic history as he pursues his distorted, malevolent dream.

Longtime journalist and former diplomat John R. Thomson focuses on geopolitical issues in emerging markets. Former Venezuelan career diplomat Norman Pino de Lion served as his country's ambassador to both Saudi Arabia and the Netherlands.