If the opponents of Recep Tayyip Erdoğan hope to unlock his increasingly autocratic grip on power, they need to join forces, then work to divide the ruling AKP.
It’s a bridge too far to say that the Turkish opposition is responsible for a decade and a half of losses to Recep Tayyip Erdoğan.
But there’s no doubt that his opponents certainly haven’t posed an effective brake on Erdoğan’s accelerating chokehold on Turkish democracy.
Turkish voters, according to official tallies, narrowly approved sweeping changes to the Turkish constitution on April 16 that bring far more powers to the Turkish presidency with far fewer checks and balances against the newly empowered executive.
This was always Erdoğan’s plan.
It was his plan in August 2014, when the longtime prime minister stood for (and won) the presidency, introducing a de facto presidential system in Turkey. Prime minister Binali Yıldırım essentially serves at the pleasure of the Turkish president today.
It was his plan last weekend, when he won (or possibly stole) a victory for a de jure presidential system through 18 separate constitutional amendments, many of which take effect in 2019 with a likely joint parliamentary and presidential election. Most immediately, however, Erdoğan will be able to drop the façade of presidential independence and return to lead the party that he already controls indirectly. (It’s a step that apparently won praise, almost alone among Atlantic leaders, from US president Donald Trump and Hungarian prime minister Viktor Orbán.)
It was his plan when, after the longtime ruling Adalet ve Kalkınma Partisi (AKP, the Justice and Development Party) failed to win an outright majority in June 2015, he plotted a crackdown on the Kurdish minority — after years of progress in integrating Kurds by relaxing restrictive and counterproductive restrictions on Kurdish language and culture — to engineer a majority win in a new round of elections five months later. Continue reading The only way to save Turkish democracy is a competent opposition→
Before Thursday’s jaw-dropping 77-minute free-form press conference, US president Donald Trump made a rare foray into Latin American politics on Wednesday night, publicly calling for the release of Leopoldo López, a Venezuelan opposition leader imprisoned by the chavista government since 2014.
It was a surprising move by Trump, who was having dinner Wednesday night with López’s wife, Lilian Tintori, and Florida senator Marco Rubio. Trump joins many figures from across the political spectrum over the last three years, including former US president Barack Obama and Spanish prime minister Mariano Rajoy, who renewed calls to release López on Thursday.
López, on the third anniversary of his arrest, is now at the heart of the Venezuelan opposition struggle in its daunting task of removing an increasingly undemocratic chavista regime through democratic means. Despite Trump’s call on Twitter to free López, a Venezuelan appeals court upheld the opposition leader’s sentence Thursday morning, and foreign minister Delcy Rodríguez chided Trump in response.
In February 2014, when protestors were already taking to the streets against Maduro’s government (and when the economic situation, though dire, was far better than today), López was leading the way calling for peaceful protests in hopes of toppling the government through show of popular disapproval. Those protests, however, turned deadly when police deployed lethal force against the protesters and 43 people died. López was promptly arrested and, months later in September 2015, found guilty of public incitement of violence. His imprisonment is widely considered to be politically motivated by international groups and figures ranging from the United Nations to the Dalai Lama, and his arrest was one of the reasons why the South American trading bloc, MERCOSUR, suspended Venezuela’s membership in December 2016, citing problems with human rights and the rule of law. Continue reading Overshadowed by scandal, Trump calls for López’s release in Venezuela→
‘Socialism’ may be at the heart of chavismo and the Sanders campaign, but they come from two very different political traditions.
One of the more popular comparisons of critics of Vermont senator Bernie Sanders is between the brand of ‘democratic socialism’ that Sanders has espoused in his Democratic presidential campaign and Venezuelan-style socialism.
But for reasons I’ll describe below, it’s a facile and wrong-headed comparison, and it’s an insult both to Sanders and to the Venezuelan opposition that’s struggling so hard against something much more insidious than just ‘democratic socialism.’
Sanders has looked to countries like Sweden and Denmark, arguing that the US social welfare net should look more like the Nordic social welfare net. Those are countries that, by and large, conduct free and fair elections with a firm dividing line between government and party, squeaky-clean transparency, a tradition both of consensus-building and more recently, a reformist nudge that’s tried to retool creaking social welfare system toward more competition and liberalism.
No one disputes Venezuela’s problems, which faces today probably the globe’s most painful economic crisis. They are immense.
Henry Ramos Allup is set to become the next president of Venezuela’s National Assembly today.
Without a doubt, the victory of the anti-chavista opposition in the December 6 elections was one of the most improbable and most impressive wins in world politics in 2015.
With a two-thirds majority that the Mesa de la Unidad Democrática (MUD, Democratic Unity Roundtable) is still trying to defend from attacks from the ruling Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela), the opposition today took control of the Asamblea Nacional (National Assembly), the legislative branch of Venezuela’s government. That will continue to be true, no matter if the PSUV tries to invalidate a handful of MUD deputies or if president Nicolas Maduro tries to create an alternative chavista-dominated popular assembly.
For the first time since 1999, the chavistas haven’t controlled the National Assembly. Naturally, it was a momentous occasion. For now, the Venezuelan people seem firmly behind the opposition, in the hopes that they can push Maduro toward reforms to provide economic relief after years of socialist policies and, perhaps more damningly, widespread corruption, handouts to socialist allies like Cuba and Nicaragua and mismanagement of PdVSA, the state petroleum company, which has only accelerated losses stemming from the global decline in oil prices.
But that’s also why it’s so disappointing that the MUD coalition chose as the president of the National Assembly the 72-year-old Henry Ramos Allup, a longtime fixture on the Venezuelan opposition and a throwback to the ancien régime that proved so corrupt and incapable that it opened the path to Hugo Chávez’s perfectly democratic election to the Venezuelan presidency in 1998.
Let’s start with the good news. Ramos Allup, it’s true, was chosen through a democratic process, an internal vote among the 112 MUD deputies. He easily defeated Julio Borges, another opposition figure close to former presidential candidate Henrique Capriles, by a vote of 63 to 49 over the weekend. He’s one of the few figures within the opposition to have some experience of Venezuelan governance before chavismo and, truth be told, he’s a tough and wily character who will not easily be rolled. (Though, almost immediately after the new majority took power in the National Assembly, the chavista deputies, including the former Assembly president Diosdado Cabello, promptly walked out).
Henrique Capriles (right) and Leopoldo López (left) campaigned together in the 2013 presidential election.
I write Friday for The National Interest a follow-up post on Venezuela’s legislative elections.
With the unexpected results, which not only gave the Mesa de la Unidad Democrática (MUD, Democratic Unity Roundtable) a victory, but a two-thirds supermajority in Venezuela’s National Assembly, a critical blow to the ruling chavista government of Nicolás Maduro.
I make the case that the MUD must prioritize a recall referendum that could remove Maduro from office early in 2016:
In a “normal” democracy, it would not be atypical for a divided government to emerge, in the same way that Republicans today control the legislative branch and Democrats control the executive branch in the United States. Gridlock might come to dominate Venezuelan governance, it’s true. But Maduro, who lacks a powerful presidential veto, would be forced to accept the MUD coalition’s policy prescriptions to get the economy back on track, however painful the compromises for both sides.
Yet neither Maduro nor the chavista high guard has shown the slightest bit of respect for the democratic process. Though Chávez came to power — and stayed in power — on the strength of a bona fide popular and democratic mandate, his government and Maduro’s government have gone out of their way to make a mockery of democratic norms. They have diverted government funds, including the country’s dwindling oil revenues, to nakedly political purposes for so long that it’s difficult to know where chavismo ends and Venezuela’s government begins. They’ve imprisoned opposition leaders like Leopoldo López and former Caracas mayor Antonio Ledezma without due process on charges that even López’s prosecutor (speaking safely from exile in Miami) admits were politically motivated. Chavistas have dominated the Venezuelan media so thoroughly that it’s hard to speak of any real press freedom; in 2015, it had the worst record in South America, according to Reporters Without Borders. The outgoing head of the National Assembly, Diosdado Cabello, has bullied and harassed the opposition at every step, is reported to have ties to drug traffickers and other criminal elements, and shows no sign of accepting the docile role of loyal opposition leader. The list goes on and on (and Rory Carroll’s excellent 2013 book, Comandante: Hugo Chávez’s Venezuela, exhaustively catalogs the abuses, both petty and serious). Though there was once a democratic basis for chavismo’s legitimacy, its unique record since 1998 demonstrates that it simply cannot be trusted to execute the new National Assembly’s laws in good faith. In crisis mode, with the worst performing economy in the world, Venezuela simply cannot wait until the scheduled 2018 presidential election to turn the page on chavismo.
Though there is some risk of ‘overreach’ in calling a recall referendum, and though a snap presidential election could create real tensions within the MUD coalition, I also argue that the far greater risk is failing to learn the lessons of chavismo and the risk of a divided government wholly unable to meet the critical task of rebuilding Venezuela’s economy in the next three years.
Despite a late surge in the election campaign, socialist president Nicolás Maduro still faces a major defeat in this weekend’s elections for Venezuela’s National Assembly.
In a set of free and fair elections, it would not be difficult to predict that Venezuela’s long-suffering opposition would win a wide majority in December 6’s legislative elections; for many Venezuelans, despite marked disadvantages, the question is not whether the opposition will win, but by how much.
That doesn’t mean the anti-chavista coalition Mesa de la Unidad Democrática (MUD, Democratic Unity Roundtable) is anywhere near taking real power in Venezuela. No matter what happens, on December 7, Venezuelans will still wake up to president Nicolás Maduro, the oft-ridiculed successor to the late Hugo Chávez. Maduro only narrowly won the presidency in April 2013, following Chávez’s death, and Venezuela’s economy, already in dire trouble two years ago, has failed dramatically ever since.
What’s more, short of a massive supermajority, Venezuela will be gridlocked for the next three years when the next presidential election will held, at a time when its economy has reached crisis-level proportions of failure.
Dependence on oil revenues meant that even before global oil prices plummeted, Venezuelans were facing shortages of basic products, from food to medical supplies to toilet paper, and inevitable scenes of government-mandated rationing. Massive inflation, in tandem with an unofficially depreciating currency, has inflicted even greater economic pain for a country dependent on foreign imports, at least for those without access to US dollars. The economy is expected to contract by as much as 10% in a single year, making Venezuela’s the worst-performing in the world in 2015. Earlier this spring, conditions were so bad that chavista supporters took to throwing mangoes at Maduro at political events in desperate search of basic necessities. Maduro, meanwhile, has campaigned hard on Chávez’s memory and fear tactics that the opposition will reverse the government’s many social welfare programs.
Voters will be choosing all 167 members of the Asamblea Nacional (National Assembly), where the chavistas currently hold 99 seats, while the opposition coalition holds just 64. Yet few observers believe that the Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela), the chavista party that for 16 years has governed the country in a way that’s blurred the line between political and governance activity, can win a majority in the elections. Datanálisis, one of Venezuela’s most respected polls, pitted the opposition coalition’s support at over 63%, with just 28% support for the chavistas in an October poll. Over at Caracas Chronicles, Francisco Toro argues that, for the first time in years, the December 6 elections represent the re-introduction of ‘politics’ to Venezuelan life.
But for a country where chavismo has now become so entrenched in its government and commerce, no one knows for sure exactly what the MUD’s margin of victory might be and how many seats it will ultimately procure. Under the dual voting system, most members are elected in single-seat districts, while 30% are elected by closed-list proportional representation. Rural areas, where the poorest voters support Maduro and chavismo more strongly for the generous social welfare programs introduced since 1999, are over-represented, as compared to urban areas, where the opposition’s support is strongest. A simply majority will give the opposition less power than a three-fifths majority or a two-thirds majority, with which the MUD could even forced a recall referendum against Maduro. Continue reading No matter who wins, Sunday’s elections will not be chavismo’s last stand→
It wasn’t unexpected, but Evo Morales has extended his rule to a third consecutive term after Sunday’s general elections in Bolivia, where exit polls show that Morales leads his nearest rival, Samuel Doria Medina, by a margin of around 60% to 24%, easily avoiding a runoff and propelling him into position to become Bolivia’s longest-serving leader.
Although Morales himself introduced a two-term limitation in a new constitution promulgated by popular referendum in 2009, he argued that because he was elected to his first term in 2005 under the old Bolivian constitution, his 2009 reelection was his first ‘term’ under the new constitution, paving the way for Sunday’s reelection bid.
Unless the Bolivian Asamblea Legislativa Plurinacional (Plurinational Legislative Assembly) votes to overturn those term limits, however, Morales will now become a lame-duck president, whose final term will end in 2019.
Though the final results of Bolivia’s parliamentary elections are not yet available, it was also expected that Morales’s Movimiento al Socialismo (MAS, Movement for Socialism) would retain its control over both houses of the national assembly.
Morales, the first indigenous president of Bolivia, won reelection for many reasons, including his faithful support among Bolivia’s majority indigenous population. Bolivia’s economy is roaring, thanks to a commodity boom and high demand (and high prices) for Bolivian natural gas in neighboring Argentina and Brazil. Though Morales came to office as a firebrand disciple of the late socialist Venezuelan president Hugo Chávez, he has taken a more nuanced approach to economic policy than chavismomight otherwise indicate. Though Morales has nationalized many of Bolivian’s industries, including major gas, mining and telecommunications interests, even orthodox economic policymakers admit that the Morales government has done a good job of managing state assets. Morales has reduced Bolivian public debt, and he has used the proceeds of the Bolivian commodities bonanza to finance programs that have sharply reduced poverty in South America’s poorest country. Continue reading Bolivia election results: Morales wins landslide, but obstacles lurk→
Though the late Hugo Chávez has been dead for over a year, the progeny of his democratic socialist movement elsewhere in Latin America are thriving — in part by playing much smarter regional politics than Chávez ever did.
Even as Chávez’s heirs in Venezuela struggle to control a growing economic and governance crisis, the other children of chavismo, including Ecuadorian president Rafael Correa and Bolivian president Evo Morales, may be showing how to marry socialist ideology to a more sustainable co-existence with global markets.
All three leaders, including Morales, tweaked investors by nationalizing industries and, in the case of Morales, railing against the international patchwork of neoliberal institutions, including the World Bank and the International Monetary Fund.
As with Correa and Chávez, Morales came to power with a relatively anti-US disposition, and one of the first things that Morales, a former coca farmer, did upon taking office was to kick US drug enforcement agents out of the country. His steps have de-escalated the militarization and violence involved with US-led efforts to eradicate drug production in Latin America, and have likely emboldened the calls of other regional leaders to call for a new approach to illicit drugs, including legalization.
But if Morales has nationalized industries like a Venezuelan socialist, he’s run them like a Norwegian state manager.
That’s one of the chief reasons that Morales (pictured above), the country’s first indigenous leader, is such a favorite to win reelection to a third term as Bolivia’s president in general elections on October 12. Bolivians will also vote to elect the members of both houses of its Asamblea Legislativa Plurinacional (Plurinational Legislative Assembly).
Since 2004, Rafael Ramírez has served as the president of Petróleos de Venezuela, S.A. (PdVSA), the country’s state-owned oil company, and since 2002, Ramírez has served as Venezuela’s energy/oil minister.
That all changed on Tuesday, when president Nicolás Maduro announced a reshuffle of his government, the most significant since his controversial and narrow election in April 2013.
Ramírez, after Maduro and after Diosdado Cabello, the president of the Asamblea Nacional (National Assembly), was the most powerful of the chavistas remaining in government in the aftermath of Hugo Chávez’s death almost exactly 18 months ago. Since that time, Ramírez became, in addition to PdVSA head and oil minister, vice president in charge of economic affairs.
A longtime old hand within chavismo, he was among the most pragmatic and moderate of the chavistas. Ramírez may have run Venezuela’s oil industry into the ground, and he may have been as corrupt as anyone in Venezuela’s government. But he didn’t radiate the kind of socialist, true-believer aura of other leading chavistas, such as former planning minister Jorge Giordani and former foreign minister Elías Jaua.
In the Maduro era, Ramírez endorsed reforms, such as reducing the gasoline subsidy that keeps the price of fueling Venezuelan cars lower than anywhere else in the world and otherwise liberalizing the economy, including with respect to the massively overvaluedbolívar.
Asdrúbal Chávez, the cousin of the late former president, will become the next oil minister, while PdVSA engineer and executive Eulegio Del Pino, a close Ramírez ally, will be the oil company’s next president.
Though he was simultaneously named foreign minister, it’s hard to see how Ramírez hasn’t suffered a demotion for a country where 97% of foreign earnings derive from oil. As PdVSA head, in particular, Ramírez controlled the most enviable element of Venezuelan economic policymaking — he controlled the profits. So while the move to foreign minister would be a promotion for many ambitious politicians, in Venezuela, it’s a way of sidelining Ramírez. Continue reading Ramírez demotion headlines Venezuela’s cabinet reshuffle→
Though critics can dump a lot of problems on the doorstep of Hugo Chávez’s 14-year reign as president of Venezuela, the one thing that you can’t say about Chávez is that he used state violence (as opposed to expropriation, media censorship or other tactics) to undermine Venezuela’s rule of law, excepting perhaps the aborted April 2002 coup, a complex incident in Venezuelan politics in which neither the Venezuelan military, the Chávez administration nor the Venezuelan opposition was entirely blameless.
It’s hard to extend the same credit to Chávez’s successor, Nicolás Maduro, in light of the violence against protestors in Caracas, Valencia and elsewhere across Venezuela last night.
A 22-year-old beauty queen, Génesis Carmona, was shot in the head in central Valencia Tuesday night, the fifth fatality in a series of escalating student protests against the Maduro government — the photo above shows Altamira, a relatively wealthy neighborhood in Caracas that’s seen some of the most tense confrontations of the past 48 hours.
Venezuela’s oil production allowed Chávez to circumvent violent repression by using money to buy and consolidate his support among his natural base — Venezuela’s poorest citizens who hadn’t benefitted from the petrostate’s largesse (and, increasingly, a corrupt ‘boligarchy’ whose continued prosperity depends on the continuity of the chavista regime).
Though the February 2014 protests aren’t as widespread as the ones that led to the 2002 coup against Chávez, economic conditions are much poorer today in Venezuela than they were 12 years ago, when Chávez was just three years into his presidency and the country exported more oil — and other products — than it does today. The fact that five people are dead, with many more injured, is a serious escalation in a country where, though political polarization has been common for the past decade and a half, political killing has not. Maduro’s government is censoring the media even more than usual, putting much of Caracas on lockdown and arresting protestors by the truckload. Most fundamentally, governments in truly liberal democracies do not respond to political protest with lethal violence. Chávez could point to legitimate majoritarian support throughout the entirety of his presidency, even if it obscured the deterioration of the rule of law and public institutions. By contrast, Maduro’s increasingly violent response to protest underlines the fragility (or, perhaps, the illegitimacy) of his political support. Continue reading Politics turns violent in Venezuela→
I write tomorrow for The National Interest about the dual economic crises in Venezuela and Argentina.
The similarities between the two economic crises are uncanny — inflation, capital controls, dollar shortages, overvalued currencies, shortages, etc.
But the similarities don’t stop there. Both countries currently fee political limitations to force policy changes to avert crisis — and that limit the political capital of the leaders of both countries, Venezuelan president Nicolás Maduro and Argentine president Cristina Fernández de Kirchner, to enact reforms:
Accordingly, normal political channels seem blocked through at least the end of 2015, despite the fact that both countries should be considering massive economic policy u-turns that will require significant amounts of political goodwill neither Maduro nor Fernández de Kirchner possess. But there’s an even greater inertia lurking beyond even the routine political impasse—a kind of political dead-hand control in both countries, on both a short-term and long-term basis.
First, both Venezuela and Argentina remain tethered to the political ideologies of chavismoand kirchnerismo, even though their proponents, Chávez and Néstor Kirchner, are now dead. Those policies may have worked over the last decade to achieve certain goals, including greater social welfare and poverty reduction in Venezuela and a rapid return to economic growth and competitive exports for Argentina. But it should be clear by now that chavismoand kirchnerismo are unable to provide answers to their respective countries’ economic woes today.
Even more broadly, I argue that beyond the shortcomings of chavismo and kirchnerismo, Venezuela faces a long-term resources curse and Argentina faces the long-term legacy of protectionism and statism of peronismo, which in each case underlie the current economic crises. What’s more, the IMF-sponsored reforms in 1989 that led to the massive Caracazo riots in Venezuela and the IMF-approved lending tied to Argentina’s 1990s ‘convertibility’ crisis that led to the 1999-2001 peso crisis have undermined orthodox economic policymaking:
What’s more, ill-conceived attempts to rupture those dominant paradigms through orthodox ‘Washington consensus’ reform processes led to economic and political disaster. In both countries, leaders experimented with neoliberalism, facilitated by the misguided zeal of the International Monetary Fund, without enacting any corresponding safety nets or shock absorbers. The resulting crises led both countries to double down on their prevailing ideologies, thereby, ironically, making economic reform today even more difficult.
In both cases, the political, historical and economic legacies have prevented the broadly moderate, business-friendly, social democratic middle courses that much of the rest of South America has embraced to wide success, including Colombia, Peru, Chile, Brazil.
Though Venezuela’s crumbling economy was the top issue in 2013, the country’s violent crime rate is now topping the 2014 agenda after the horrific murder of Mónica Spear, the 29-year-old television star and 2004’s Miss Venezuela, and her ex-husband were shot in an attempted robbery, after their car broke down on a highway Monday night.
Violent crime in Venezuela didn’t spring up overnight, but even president Nicolás Maduro admits that 2013 saw a rise in crime. But it’s been on the rise throughout the chavista era. It’s a topic that I discussed earlier today on Fusion’s America with Jorge Ramos (in my first-ever live television interview — next time, I need to know where to put my eyes!).
When Hugo Chávez was first elected in 1999, he and his advisors thought that reducing crime in Venezuela was a matter of reducing poverty and inequality. For all the faults of chavismo, you can point to a substantial reduction in poverty and inequality since 1999, though there’s obviously some debate as to whether the chavistas accomplished that goal in the most efficient, effective or sustainable manner.
Yet even as poverty decreased, violent crime increased steadily over the Chávez era. Official figures aren’t available (and it’s doubtful they would be reliable even if they were), butObservatorio Venezolano de Violencia, an NGO that tracks violent crime, claims that the homicide rate is 79 per 100,000 — a rise in 2013 from a rate of 73 in 2012. That makes Venezuela second only to Honduras, with a 2012 homicide rate of 91.6 per 100,000.
If there’s one point to take away about the link between poverty and violent crime, it’s that the poorest Venezuelans are more likely to be victims of crime themselves. Crime is higher in the cities than in the countryside, and it is highest yet in the barrios of Venezuela’s capital, Caracas — you’re much likelier to be murdered in the more lawless neighborhoods in the mountains overlooking downtown Caracas than in the wealthier and safer valley below. While every murder is a tragedy, Spear’s death is just one of tens of thousands annually. Justice rarely comes for many of those anonymous victims and their families, given that crimes are rarely investigated and even more rarely prosecuted.
Crime is a complex sociological phenomenon, so it’s not easy to point to one variable in particular as its direct cause. Poverty may play a role, but it’s not a matter of ‘if x, then y.’ In the case of Venezuela, the more relevant factors include a high gun ownership rate, corruption and low trust in public institutions, and a climate of political polarization. But the biggest factor is the weakening of the rule of the law over the past 15 years.
As Juan Nagel writes in Foreign Policy, Venezuela has very few judges and prosecutors, and many of them are corrupt. Policemen and other officials commonly take bribes. Jails are overcrowded and controlled by the criminals locked inside them. No one has much faith in the justice system. If you look at the 2013 Corruption Perceptions Index, Venezuela is ranked 160. Afghanistan, North Korea and Somalia are tied for dead-last at 175. That should tell you quite a bit about Venezuela’s culture of impunity. It’s not just the justice system, either. It’s the kind of ‘democracy’ whereby all of the state organs, from state media to the electoral commission to the courts to Petróleos de Venezuela, S.A. (PDVSA), the state oil company, have all been politicized and are today essentially levers to boost chavismo. It’s the kind of ad hoc economic policymaking where rules change from one day to the next, or the Venezuelan president can expropriate a business or nationalize an industry on a whim. That, too, corrodes the rule of law.
That’s also why there’s very little chance that Maduro or any chavista regime is likely to reverse the decade-long trend of greater violent crime. Despite a high-profile photo op with opposition leader and Miranda state governor Henrique Capriles (pictured above), Maduro (like Chávez before him) has worked to strip municipal and state governments of much of their autonomy by consolidating power over local budgets under the national government. That’s especially true for states and municipalities controlled by the opposition. Continue reading Chavismo offers no solutions for Venezuela’s violent crime→
Though I rang in the new year with a list of 14 world elections to watch in the coming year (and 14 more honorable mentions to keep an eye on), I wanted to showcase a few more thoughts about what to watch for in world politics and foreign affairs in 2014.
Accordingly, here are 14 possible game-changers — they’re not predictions per se, but neither are they as far-fetched as they might seem. No one can say with certainty that they will come to pass in 2014. Instead, consider these something between rote predictions (e.g., that violence in Iraq is getting worse) and outrageous fat-tail risks (e.g., the impending breakup of the United States).
There’s an old album of small pieces conducted by the late English conductor Sir Thomas Beecham, a delightfully playful album entitled Lollipops that contains some of the old master’s favorite, most lively short pieces.
Think of these as Suffragio‘s 14 world politics lollipops to watch in 2014.
Henrique Capriles’s last hopes of winning a recount in the April 2013 presidential election slipped away earlier this month when the chavista-controlled judicial system dismissed his complaints over the election.
No one thought that, four months later, the opposition candidate had much of a chance of unseating Nicolás Maduro, no matter whether he actually won more votes. But the decision two weeks ago of Venezuela’s top constitutional court not only dismissed Capriles’s complaint but fined Capriles around $1,700 for insulting the integrity of the court, and it suggested that Venezuelan prosecutors file a case against Capriles, who is also the governor of Miranda, for offending the institutions of the state.
No one thinks that the April 14 vote was incredibly fair — Maduro’s ruling chavista party, the Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela) has co-mingled party and government for so long that it’s impossible to separate the two. Chavismo remains both the dominant party and ruling ideology in Venezuela, even after Chávez’s death in March. The Maduro campaign wielded a huge advantage in its access to state-controlled media and funds, and that followed a massive spending spree last year in the leadup to Chávez’s own reelection in October 2012. But there’s credible evidence that the vote was not incredibly free either, with reports of voter intimidation and manipulation by chavistas and by police and army officials.
Officials in Venezuela’s electoral commission (the CNE) point to a June audit that ‘confirmed’ Maduro’s 1.49% margin of victory. But the CNE won’t release the logs of voter signatures and fingerprints that correspond to the voting machines, which might otherwise reveal how fraudulent the voting actually was. Neither Capriles nor the broad opposition group, the Mesa de la Unidad Democrática (MUD, the Democratic Unity Roundtable), believe the result is legitimate.
Meanwhile, the chavistas are engaged in a slow-motion, cold civil war, and the Venezuelan economy is struggling with a combination of low growth, import dependency, depressed oil output, dysfunctional currency markets, and hyperinflation unseen since the 1980s.
When Venezuelan president Nicolás Maduro appointed Nelson Merentes as his new finance minister shortly after Maduro’s controversial election in April, no one knew whether Merentes would actually be the official in charge of economic policy.
That’s because the former finance minister Jorge Giordani, the longtime policymaker in the era of former president Hugo Chávez, remained planning secretary — and in a huge public-sector country like Venezuela, there’s little left untouched by central planning. Giordani, more than anyone else, was responsible for the statist economic policies of the Chávez era, including currency and price controls.
But this week, there was no mistaking that Merentes is now ascendant — Edmée Betancourt, who had served as president of Venezuela’s central bank (BCV) for just over three months, stepped down in favor of Eudomar Tovar, an economist who was most recently the head of Venezuela’s currency exchange (CADIVI). Betancourt, a former commerce minister, was seen as closer to Giordani and the more ideological, statist wing of chavismo, while Tovar and Merentes are associated with a more pragmatic, moderate view of economic policy. Rumors swirled last week that Giordani might soon leave the planning ministry, abandoning a recent push to raise taxes, to take up an ambassadorship soon.
Leave aside for a moment that in an era of central bank independence, neither Giordani nor Merentes would be dominating the BCV’s monetary policy in a country with sounder financial institutions. If Merentes and Maduro really want to shake up Venezuela’s economy for the better, they should start by reintroducing a line between the ruling Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela) and the institutions of the Venezuelan state — starting with the BCV, but also with the national oil company, Petróleos de Venezuela, S.A. (PDVSA).
Merentes’s rise should provide at least some cautious optimism — if Giordani would have doubled-down on statist Chávez-era policies, at least Merentes seems to realize that Venezuela’s basketcase economy has some problems. The central bank’s reserves are dwindling, Venezuelan GDP growth has slowed to nearly nothing, and inflation has reached its highest level since before Chávez came to power in 1999 on the road to a potential hyperinflationary collapse.
But it remains far from clear that Merentes is willing to embark upon a program of true economic reform or whether Maduro has both the political capital and the political will to enable him to do so. Moves to devalue the bolívar both officially and unofficially earlier this year was a start in bringing the Venezuelan currency’s stated value in line with its real market value, but the currency has decline further in value throughout they year: despite an official value of 6.3 bolívares to the dollar, its real value has dropped from around 20 at the time of the April 14 election to more than 30 or 35 today. Maduro took steps to tweak the currency exchange system through the introduction of SICAD auctions earlier this spring — because the vast majority of U.S. currency comes to Venezuela through the government’s sale of oil products, the government must develop a mechanism to sell those dollars to importers who need hard currency. But neither Maduro nor Merentes have been in a rush to hold regular dollar auctions (only around $600 million has been auctioned off so far in 2013) or to deliver the actual dollars from the government to the private sector. But the fuss over SICAD and currency exchange is really just a stop-gap measure — if the ‘pragmatists’ can’t even get this right, it leaves little faith in their ability to overcome more fundamental problems with Venezuela’s economy.
Maduro and Merentes still hope that they can borrow their way out of Venezuela’s current malaise, and the government had the brass to float the possibility two months ago that Merentes would go on a roadshow to New York and London to gauge appetite for Venezuelan bonds. That roadshow plan quickly fell apart when it became clear that there’s little appetite for risky Venezuelan debt among global investors — yields on Venezuela’s benchmark bond have been in the double digits since Maduro’s election. Continue reading ‘Pragmatic’ Merentes winning control over Venezuela economic policy, but to what end?→
