Does Venezuela need its own Margaret Thatcher?


Though the snap Venezuelan presidential election — just six days away — will likely have huge implications for the country’s economic policy, and though most economic commentators would agree that Venezuela is in dire need of economic reform, neither candidate seems especially keen on discussing those reforms in a campaign that’s been heavy on personality and emotions.Venezuela Flag Icon

But the negative aspects of legacy of chavismo — a growing public sector and nationalized industries, ever-expanding army of bureaucrats, widespread power outages, crumbling infrastructure — sound an awful lot like much of the problems that the United Kingdom faced in the late 1970s.

Is Venezuela entering its own ‘winter of discontent?’  And if so, does it need a Margaret Thatcher?

When it comes to South America, Thatcher is most well-known for the Falklands War against Argentina in 1982 (see Thatcher pictured above during that war).

But one Venezuelan blogger has already argued that Romuló Betancourt, the first democratically elected president of Venezuela in 1958, was its ‘Thatcher.’  Betancourt’s major contribution was normalizing democratic elections and peaceful transfers of power, an institution that has so far continued in Venezuela without interruption, even throughout the chavismo era.  Economically, the Betancourt government’s most notable achievement was land reform that boosted rural peasants.

Perhaps the better example of Thatcherite economics in Venezuela is the second term of Betancourt’s successor (and one-time interior minister) Carlos Andrés Pérez (pictured below).  Despite presiding over the largesse of the oil bonanza that to the rest of the world was an oil crisis, Pérez (or ‘CAP’) returned to office with high hopes that he could unlock another era of plenty on a relatively populist campaign built on empty promises.


Upon election, he rapidly sought a $4.5 billion loan from the International Monetary Fund, in return for crushing reforms that included a tax overhaul, a reduction in tariffs and custom duties and privatizations of state-owned companies.  But those reforms (the ‘paquete‘ or the ‘package’) most controversially caused the price of gasoline prices to rise (and the secondary price of public transportation) due to the elimination in Venezuela’s famous gasoline subsidy — to this day, Venezuelan gas prices are the lowest in the world, and Venezuelans believe cheap gas is practically a birthright.

The reforms led directly to the Caracazo riots in Caracas on February 27, 1989 — as Francisco Toro and Juan Cristobal Nagel write in their wonderful compilation of 10 years of blogging about chavismo (from an opposition viewpoint), the Caracazo marked an incredible rupture in Venezuelan life:

Until then, Venezuelans had seen themselves as different, more civilized, more democratic, better than their Latin American neighbors.  Thirty-one years of unbroken, stable, petrostate-funded democracy had made us terribly cocky.  In a sense, the riots market Venezuela’s re-entry into Latin America.  The country was no longer exceptional: just another hard-up Latin American country struggling to put its democracy on a stable footing.

Those riots ultimately led to the dismantling of Venezuela’s two-party system, CAP’s impeachment in 1993, and two coup attempts in 1992 — one in February 1992 by a little-known lieutenant colonel named Hugo Chávez, who would of course take power by democratic means just six years later in a landslide election victory.

So if Thatcherite policies ultimately paved the way for chavismo, could chavismo pave the way for a countervailing turn back to neoliberal reforms?  Fast-forward two decades, and the country with the world’s largest proven reserves of petroleum finds itself with a budget deficit last year that equalled 17% of GDP and a public debt burden that’s now equal to 50% of GDP.  So if he wins the presidential election, Chávez’s anointed successor Nicolás Maduro will have far fewer economic tools at his disposal than Chávez did to achieve his goals.

Opposition candidate Henrique Capriles certainly isn’t going around the country advocating the elimination of gasoline subsidies, but Capriles seems far likelier than Maduro to enact the kind of policy reforms that could balance Venezuelan finances back toward a more stable equilibrium.

But say what you will about the positive aspects of chavismo in reducing poverty in Venezuela and giving voice to a largely forgotten underclass excluded from the country’s oil wealth for a half-century, Venezuelan finances are hardly in great shape, and the winner of Sunday’s election will face significant financial pressures — all the more so if oil prices fall over the next six years.


Despite Trudeaumania, Joyce Murray personifies the future of Canada’s center-left


It’s a safe prediction that Joyce Murray will not be the next leader of the Liberal Party.Canada Flag Icon

When the Liberal Party’s membership finishes voting and the winner is announced this Sunday, the winner is certainly going to be Justin Trudeau — and likely by a landslide margin.  His anticipated election is already pushing the Grits ahead in polls, and not only against the official opposition, the New Democratic Party under Thomas Mulcair, but into contention for first place against the Conservatives under Stephen Harper.

It seems equally likely that the Liberals will get an even larger boost in the polls in the ‘Trudeau honeymoon,’ as the presumptive Liberal leader ascends to lead a party that governed Canada during 69 years of the 20th century — and which has seen its share of the vote fall in each of the past five elections.

Murray, who served as minister of water, land and air protection in the Liberal government of British Columbia premier Gordon Campbell in the early 2000s, lost her provincial seat in 2005 and reemerged as a Liberal MP from Vancouver in the House of Commons in the 2008 election.  Since the withdrawal of MP Marc Garneau from the leadership race, however, Murray has been locked in a battle for second place with former Ontario MP Martha Hall Findlay.

The late momentum, however, lies with Murray, whose main campaign strategy has been a unite-the-left platform aimed at pulling together the Liberals, the New Democrats and the Greens together in an alliance for the next general election.  Murray certainly has raised more money than any of the non-Trudeau hopefuls.

The fundamental fact of Canadian politics is that the broad left — from the most moderate business-friendly Liberals to the most ardently progressive New Democrats — remains split between two credible alternatives to the Conservatives.  In many ways, it parallels the split between the old-guard Progressive Conservative Party and the upstart Reform Party / Canadian Alliance in the 1990s and early 2000s, which allowed Liberal prime ministers Jean Chrétien and Paul Martin to govern without much of an opposition from 1993 to 2004.

In the same way, the logic that propelled the conservative merger in 2003 augurs for a similar center-left alliance in 2013.

And the logic is tantalizing — in a country where MPs are determined in 308 first-past-the-post single member ridings, the Tories won a majority government in 2011 with less than 40% of the vote.  A recent Léger poll shows the Conservatives with 31%, the Liberals ascending to 30%, the NDP with 24% and the Greens with 7%.  Taken together, Murray’s dream coalition would trounce the Tories on a vote of 61% to 31%.

The problem is that unlike the PCs, which never won more than 15 seats in the House of Commons after their decimation following the 1980s governments of Brian Mulroney, and unlike Reform/Alliance, which never managed to extend its reach beyond western Canada, both the NDP and the Trudeau-era Liberals are national parties with long, proud histories in Canada that stretch back far into the prior century.

Trudeau himself has argued to the incompatibility of the Liberal and NDP traditions:

But this debate is less about electoral calculations than about Trudeau’s assessment of congenital incompatibilities on the left of the Canadian political spectrum. In an interview last year with Maclean’s, he contrasted the unification of the right, as accomplished by Harper in 2003, and the notion of symmetrical coming together of Canadian progressives.

“The right didn’t unite so much as reunite,” Trudeau said. “I mean, Reform was very much a western movement breaking away from Brian Mulroney. But they broke away, then they came back together. The NDP and the Liberals come from very, very, very different traditions.”

But that overstates the case — keep in mind that the most successful leader the Liberals have had in the past decade, the current interim leader Bob Rae, is the former NDP premier of Ontario.  Mulcair, the current NDP leader, was a member of the Québec Liberal Party during his career in provincial politics.  Though it’s important to keep in mind that provincial parties aren’t affiliated with national parties, it’s fair to say that there’s a significant amount of cross-pollination between the two traditions.

Even beyond her controversial support for a broad center-left alliance, however, the center of gravity in Canada is moving in two directions — both westward in the geographic sense and toward a more globalized, diverse, immigrant-rich Canada in a demographic sense — and British Columbia (and Vancouver) is obviously at the heart of both of those trends.  Continue reading Despite Trudeaumania, Joyce Murray personifies the future of Canada’s center-left

A programming note

As you’ll notice, Suffragio‘s banner has changed from its sedate blue to a more festive Venezuela-themed banner.Venezuela Flag IconWashington_DC_Icon

That’s because I’m in Caracas reporting on the Venezuela presidential election this week, so posting will be a lot different through mid-April — you’ll start to see a lot of first-hand reporting and, hopefully, original content that can only come from being on the ground as Venezuela begins the transition from the era of Hugo Chávez to the next chapter.

That means that blogging about politics and policy in other countries will necessarily be much lighter in the next week — links will be, unfortunately, more sporadic, and I’ll be limited to turn to unexpected events such as, say, the improbable (but possible) likelihood of a new Italian government or the trajectory of prime minister-designate Tammam Salam in Lebanon, or developments in upcoming May elections in Pakistan and the Philippines.