Tag Archives: chavismo

Venezuela

It’s Diosdado Cabello’s world, the rest of Venezuela is just living in it

7 Comments

Diosdado

Venezuela, just over a month after its still-contested presidential election, has made global headlines in the past couple of weeks for its chronic shortages of everything from toilet paper to church wine, with rationing soon to begin in the large western state of Zulia.  Venezuela Flag Icon

That means that the country’s economic collapse is proceeding more or less as depressingly predicted — with oil prices stagnating, and with the state-owned Venezuelan oil industry’s production reducing, it means that the country has fewer and fewer dollars to fuel its increasing dependency on imported goods, a shortage that’s been exacerbated by the government’s somewhat inefficient system of auctioning off the dollars to importers and the fact that the Venezuelan bolívar is fixed at an artificially high rate.

That’s one of the reasons that Nicolás Maduro, even with the full force of a government that has excelled at blurring the line between the Venezuelan state and chavismo, only barely won election follow Hugo Chávez’s death and why his challenger Henrique Capriles is still waging a campaign in the court system, however quixotic, to expose voting fraud in April’s election that could well reveal that Capriles won the election instead.

Maduro’s loss weakened his already tenuous position within the ranks of chavismo, and the key power brokers under Chávez have largely retained their roles under Maduro, including Rafael Ramírez, the energy minister and the president of the state-run oil company, Petróleos de Venezuela, S.A. (PDVSA), and Jorge Giordani, the former finance minister who remains the planning minister under Maduro.  Forget the fact that new policymakers could potentially reverse course on Venezuela’s economy or that Giordani, Ramírez and Maduro appear to be doubling down on the same policies that have led to Venezuela’s precarious situation — it shows that Maduro lacks the power to replace his rivals with ministers who owe their loyalty to Maduro.

But as the economy melts down, it isn’t surprising to see chavismo itself breaking down.  The first major breach came a couple of weeks ago, when a purported recording of a conversation emerged between Mario Silva, who hosts the popular, massively pro-chavista ‘La Hojilla’ television program, and Aramis Palacios, a Cuban lieutenant colonel in G2, the Cuban intelligence agency.  Silva is as much of a true believer in chavismo as anyone in the top circle of Venezuela’s ruling elite, so if Silva has such wide doubts about Maduro (at one point he says, ‘we are in a sea of shit’), imagine what the rest of the government thinks.

It’s also, of course, somewhat of an international scandal as well — though Cuban intelligence long worked hand-in-hand with Chávez and the Venezuelan government, what exactly was a pro-Chávez talk show host doing talking to a Cuban spook?  The link between the two countries became an issue during the campaign, with Capriles attacking the generous oil subsidies to Cuba that Chávez initiated a decade ago, and Maduro is widely believed to have been Havana’s top choice to succeed Chávez.

But the recording was most tantalizing with respect to Diosdado Cabello (pictured above) and his role in Venezuela’s future — no one has more power in post-Chávez than Cabello, including even Maduro. Continue reading It’s Diosdado Cabello’s world, the rest of Venezuela is just living in it →

Bolivia

Evo Morales pulls a Bolivian Bloomberg to run for third presidential term

Leave a comment

evomorales

While chavismo seems like it’s falling apart two months after the death of Venezuelan president Hugo Chávez, many of his acolytes throughout South America continue to flourish.bolivia

That’s true in Ecuador, where Rafael Correa cruised to a third consecutive term in February 2013, and it’s looking increasingly true in Bolivia, where president Evo Morales now seems clear to run for a third term following a new law confirming that he can run for a new term, which follows a constitutional court ruling that Morales could run for reelection.

Under Bolivia’s constitution, the president may serve only two consecutive terms.  Although Morales was first elected in December 2005, he cut his first term short after implementing a new constitution in 2009 and standing for a new election in December 2009.  Morales and his allies claim that, under the new constitution, Morales is serving his first term, which is technically true.  Bolivia’s constitutional court certainly ruled in his favor, and the law this week makes it all but certain that Morales will run, though he has yet to announce his reelection campaign for a general election expected in December 2014.  The governing Movimiento al Socialismo (MAS, Movement for Socialism) has already indicated its support for Morales.

That’s a long way off, but Morales starts off as the favorite.

In a highly indigenous country, Morales remains a powerful symbol as the first indigenous president of Bolivia, and he’s been a champion of indigenous rights.  When he took office in 2006, he was well-known as a leading indigenous politician with roots in the labor movement and, in particular, roots in the cocalero trade union in Brazil as a former coca-grower and a champion of campesinos — farm laborers.  In office, he was one of the world’s most outspoken critics of U.S. efforts to eradicate coca in its own ‘war on drugs,’ and it’s a view that’s gained currency in subsequent years in Latin America and beyond.

As a leftist president, his economic program has been based widely on nationalization of Bolivian industry, especially the mining industry, and using state resources to improve the lives of impoverished workers.  Despite an unconventional economic policy that involved price controls, Morales reduced the country’s inflation and brought about some measure of economic stability to one of South America’s poorest countries.

Moreover, Bolivian GDP growth remains strong at around 5% last year and in 2011, with even higher GDP forecasts for 2013.  Bolivia’s future is a little brighter in light of its burgeoning lithium industry, given that its Uyuni salt flats boast the world’s largest reserves of lithium, a mineral used in smartphones and other electric devices.

But lithium development, which requires additional water from more fertile parts of the country, has conflicted with the indigenous communities that form the backbone of Morales’s political coalition, and he’s faced protests in 2010 over cuts in government subsidies for gasoline and protests in 2011 by indigenous groups in opposition to a planned highway through the Amazon basin.

Altogether, a largely fragmented opposition will still have a tough time challenging Morales.   Continue reading Evo Morales pulls a Bolivian Bloomberg to run for third presidential term →

Venezuela

CNE agrees to 100% audit of Venezuelan votes

Leave a comment

maduro

It’s been a testy week in Venezuela, to say the least, but the decision of the CNE (the National Election Council) to conduct a full audit of all of the votes in last Sunday’s election is an olive branch that could pull the country from the brink of tipping into violence and further instability.Venezuela Flag Icon

When I left Caracas on Tuesday afternoon, opposition candidate Henrique Capriles was canceling a planned rally on Wednesday after acting president Nicolás Maduro threatened that Capriles would not be allowed to hold the rally, accused Capriles and the opposition of trying to mount a coup against him, warned that he would respond to the opposition with a firm hand, all the while arguing that Capriles was the person inciting violence.

Wednesday was hardly any less tense, with Leopoldo López claiming that arrest warrants had been issued against him and Capriles, the chief justice of Venezuela’s top court, Luisa Estella Morales, ruled out a manual recount of all of the votes, and National Assembly president Diosdado Cabello refused to allow any opposition deputies to speak until they recognized Maduro’s victory as legitimate.

But late yesterday, the CNE’s decision came even as Maduro himself flew to Lima for a short emergency meeting of UNASUR (Unión de Naciones Suramericanas, or the Union of South American Nations), which recognized Maduro’s victory, despite issuing a stern call for peace.  It seems likely that the CNE decision may have been urged on by pressure from UNASUR, though that’s mere conjecture.

Maduro’s inauguration will proceed today as planned, though opposition officials will not attend.

Capriles has welcomed the CNE’s decision, though the CNE itself says the process of auditing results may take up to a month.  For now, though, both sides are backing away from a very fraught five days:

Capriles explained that the announced audit of 46% of the remaining ballots represents 12,000 ballot boxes approximately. “Irregularities will be found in those 12,000 boxes,” he noted.

The opposition leader stressed that the audit shall include the verification of fingerprints, the recount of ballots, and the review of tally sheets and voters’ lists.

One of the key issues is determining how many votes Capriles received abroad — his campaign claims that he won 55,000 votes to just around 3,500 for Maduro.  That’s not enough to make up the difference between the two (Maduro officially won 7.575 million votes to just 7.303 million for Capriles), but it could narrow the gap.  It’s widely believed, however, that many of the votes abroad won’t make it back to Caracas — Hugo Chávez prior to the 2012 vote closed the Miami consulate, forcing south Florida Venezuelans to travel all the way to New Orleans to register their votes.

It seems fairly unlikely that a very pro-chavista CNE would countenance enough wrongdoing to hand the presidency to Capriles, so I don’t know what the endgame is here.  Though Maduro may well have won on a purely numerical count, it’s impossible to know how many votes were bought, coerced or otherwise wrung out of an electoral machine that’s blurred the lines among the state, the state-owned oil company and the governing Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela).

So the most likely scenario is that a long, drawn-out audit confirms Maduro as the winner.  That doesn’t mean Capriles has ‘lost’ in the full sense of the word, necessarily — he’s brought chavismo to the brink of defeat, and Maduro’s weak mandate is for the continuity of chavismo, not for Maduro’s leadership in its own right.  So it will likely be a very grim denouement for chavismo between now and 2019 — and the opposition will likely continue to grow in stature prior to 2015 parliamentary elections and a potential 2016 recall election to oust Maduro.  In the meanwhile, schisms are likely to open within chavismo as Venezuela’s economy continues to worsen between those who want to double down on chavista-style socialism (or even more Cuban-style socialism) and those who want to reverse course.

It won’t be pretty, but for now, at least, it won’t be so ugly as to involve violence against opposition rallies.  Given where Venezuela started its week, that’s not the worst outcome — even if you think Capriles is the rightful winner of Sunday’s vote.

Brazil, Venezuela

Chávez’s radical antics provide space for progressive Latin American left

1 Comment

latinlefties

In a piece for The National Interest today, I stepped back from the immediate issues surrounding Sunday’s presidential election and the fallout, increasingly tense, with challenger Henrique Capriles canceling a march today against potential fraud in the election and with president-elect Nicolás Maduro very much using the threat of state violence to shut down the opposition’s mobilization for a full recount.brazilVenezuela Flag Icon

It’s a piece I’d been hoping to write for some time, and I wish I’d published it sooner, but it’s still relevant given how much the late Hugo Chávez (pictured above in happier times with the late Argentine president Néstor Kirchner and former Brazilian president Luiz Inácio Lula da Silva) looms not only over Venezuela, but over all of Latin America.  I’ve written that his radical, anti-American antics have allowed other more moderate leftists in Latin America room to develop a truly progressive, social democratic movement for the first time ever, really.  Chávez, at home, transformed Venezuelan politics from a right-left contest to a battle between a more business-friendly, democratic left, as personified by Capriles, and a more socialist, militant leftism, as personified by Maduro.

I argue that Lula da Silva, in particular, has been incredibly canny in triangulating himself between the U.S. center of gravity and chavismo, exquisitely playing one against the other:

But the tidy duality of a moderate lulista left and a radical chavista left obscures the complex, often symbiotic relationship between the two forces. In particular, Lula da Silva was always incredibly cunning in using Chávez as a foil in hemispheric politics. Lula da Silva made three failed presidential bids prior to his election in 2002, fully four years after Chávez took power. By the time Lula da Silva took office, Chávez had arguably done more than anyone else in Latin America to make Lula da Silva seem moderate in contrast.

It’s certain that Lula’s vast social reforms would seem more radical—and may have met more domestic and international disapproval—if not for Chávez’s ad hoc expropriations and anticapitalist fulminations from Caracas. By giving Chávez his full support, he guaranteed especially kind treatment of Brazilian private interests in Venezuela, and his fervent support for Maduro in a taped endorsement earlier this month was provided in no small part to ensure kindness from a Maduro administration. Brazilian officials have already started casting aspersions on the Capriles camp, which has called for a full recount of the vote. But Lula da Silva’s support for Chávez also gently reminded U.S. diplomats that they had an interest in boosting the Brazilian model as a counterweight to the Venezuelan model throughout the region.

 

Venezuela

A primer on the MUD, Venezuela’s broad opposition coalition

1 Comment

image

Venezuela remains in somewhat of a twilight zone following Sunday’s election — CNE (the National Election Commission) has declared Nicolás Maduro the winner by a narrow margin, but opposition candidate Henrique Capriles has refused to concede until a full audit of all of Sunday’s votes has been conducted.Venezuela Flag Icon

The following days will put a brighter spotlight on Venezuela’s opposition than at any time since the early 2000s. The last broad opposition coalition, Coordinadora Democrática, disbanded in 2004 when it lost a referendum in August 2004 to recall Hugo Chávez from office by a lopsided margin of 59.1% to 40.6%.

Capriles (pictured above with Lara governor Henri Falcón)is the standard-bearer of a new, broader coalition — the Mesa de la Unidad Democrática (MUD, the Democratic Unity Roundtable). The MUD formed in January 2008, and Capriles was selected overwhelmingly to lead it into the October 2012 presidential election against Chávez. His loss to Chávez was by a margin of nearly 11%, but it was a better performance than any presidential challenger to Chávez in 14 years.

Capriles and the MUD have a lot of hard decisions ahead.

The first involves whether they have hard information that Maduro and the chavistas falsified the vote. As Maduro had the state media, the state oil company, the public bureaucracy and then some behind him, Sunday’s election was far from fair, though Maduro may have nonetheless won an essentially free vote, despite reports of all sorts of dirty tricks. But in the poker game that’s taking place today in Venezuela, we don’t know whether the MUD is holding a straight flush or a pair of 7s.

That defines the broader second decision facing the MUD — regardless of whether it thinks it can prove electoral fraud, will it do so? Capriles has two options here.

There’s the Al Gore / Richard Nixon model, whereby he can concede defeat for the unity of the nation, notwithstanding difficult questions about the election that may well never be answered, as was the case in the 1960 and 2000 U.S. presidential elections.

There’s also the Andrés Manuel López Obrador / Mikheil Saakashvili model. This is a high-risk / high-reward model. If Capriles presses his case on all courts, the result could be like what followed Georgia’s 2003 Rose Revolution, where Saakashvili mobilized popular opinion to dispute Eduard Shevardnadze’s fraudulent victory in the 2003 presidential election. But it could also be like the 2006 Mexican presidential election, when López Obrador fought an increasingly noisome battle against what most Mexicans concluded was a narrow but legitimate victory by Felipe Calderón.

But what is the MUD? So far, it’s been relatively united in the goal of bringing Venezuela’s chavismo chapter to an end, and it seems likely that the taste of victory in Sunday’s presidential election will fuel more unity. But it’s a far from homogenous coalition.

Here’s a look at its main components: Continue reading A primer on the MUD, Venezuela’s broad opposition coalition →

Venezuela

Chavismo is a continuity of — not a rupture from — the petrostate

Leave a comment

image

I tried to plumb deeper into the role of Petróleos de Venezuela, S.A. (PDVSA) before the election, and I argue in The Atlantic this morning that chavismo really marks more of a continuity with than a rupture from the petrostate clientelism that preceded Hugo Chávez — both in the 40 years of democracy in the late 20th century, as well as the era of military dictatorship that stretches back to the discovery of petroleum in Venezuela and its widespread export starting in 1918:Venezuela Flag Icon

Chavismo marked a rupture from this system in two ways. First, he diverted a larger share of Venezuela’s oil wealth to the poor than ever before — although the deployment of those funds was never incredibly efficient, nor was it without corruption. Secondly, he flattened the system through his own personality cult. PDVSA, the state oil company, has a stronger brand in Venezuela than the PSUV, the governing United Socialist Party. It was Chávez personally who doled out the gifts

It’s the second part that will make Maduro’s task especially difficult. Chávez would have been a hard act for anyone to follow, but Maduro is a bland apparatchik in contrast whose legitimacy, so long as he remains president, will forever be challenged by his narrow victory . He ran a largely defensive campaign, wrapping himself in Chávez’s legacy. Provided that his victory is upheld, it’s hardly a mandate forchavismo, let alone madurismo, but it’s not at all clear whether chavismo would ever actually work without Chávez, the personal embodiment of the latest iteration of Venezuela’s petro-state clientelism

That’s why, I argue further, Nicolás Maduro will have a very hard time maintaining the system Chávez developed, and why I think Venezuela is headed for more difficult times before it sees better times.

I argue that not only is Venezuela suffering from a sort of ‘Dutch disease’ on steroids, but that the petrostate mentality has skewed the relationship between the government and the governed:

As in oil-rich Middle Eastern countries, resource wealth skews the link between the state and its citizens… and the traditional link between government and voters is turned upside down: instead of an electorate of taxpayers holding its leaders accountable for good government, voters look support politicians who can offer the largest slice of Venezuela’s oil wealth. That’s why domestic subsidies make Venezuelan gasoline prices the world’s cheapest, at just six cents a gallon.

That was true before and during the Chávez era, and it will certainly be true after Chávez. What seemed like a relatively mature democratic system before Chávez was always institutionally weaker than it looked from the outside.

I also caution that the opposition will have to do much more than just win an election in order to break the vicious cycle of Venezuelan (mal)governance:

But if Maduro’s victory is somehow overturned and Capriles becomes Venezuela’s next president, he’ll need a lot more than a change in expectations to put Venezuela on a firmer footing. The opposition’s hopes are based on what Paul Krugman might call the “hada de confiaza” — a Venezuelan confidence fairy.

Venezuela

Venezuela’s economy is tumbling despite oil prices over $100/barrel

1 Comment

image

I wrote a piece for The New Republic earlier today about the state of the Venezuelan economy and the difficult issues that await the next president, which for now looks like it will be Nicolás Maduro following Sunday’s landmark presidential election.Venezuela Flag Icon

I argued that although some of the economic reforms that Maduro could implement are relatively simple, he may well lack the charisma, the political capital (both within and outside the chavista camp) and the funds to pull Venezuela back from the brink of two devaluations in 2013, the threat of even higher double-digit inflation, increasing reliance on imports for basic staples, a crumbling oil infrastructure, an atrophied private sector and difficulty accessing international — and even Chinese — finance:

It’s now up to Maduro to sort all of this out in the background of a legitimacy crisis. Economically speaking, there are several options that could help. Venezuela could claw back some of its oil revenues by reducing subsidies to Cuba and the rest of the Caribbean basin. He could reverse the trend of ad hoc expropriations under Chávez that left the public sector bloated with bureaucrats, the private sector fearful, and the non-oil industry atrophied. He could direct more capital to be re-invested into PDVSA, the state-owned oil company, to boost oil production that’s fallen by up to a third in the past 15 years, and to develop refining capacity, especially in light of the ultra heavy crude oil that’s increasingly being drilled from the interior’s Orinoco Belt. Venezuelans believe cheap gas is virtually a constitutionally protected right, and an attempt to eliminate it pursuant to an IMF loan package in 1989 is widely seen as the catalyst for the deadly Caracazo riots later that year, but Maduro could gingerly begin to reduce the domestic subsidy that keeps Venezuela’s gasoline the cheapest in the world at about six cents per gallon.

Venezuela

Cabello comments indicate cracks in the chavista high guard?

1 Comment

image

One key piece of data that I missed last night is the response of National Assembly leader Diosdado Cabello (pictured above), who tweeted the following last night:Venezuela Flag Icon

Profunda autocrítica nos obligan estos resultados, es contradictorio que sectores del Pueblo pobre voten por sus explotadores de siempre.

Deep self-criticism obliges us to note these results, and it’s contradictory that sectors of the poorest people have voted for their exploiters.

Cabello is the behind-the-scenes pragmatic bulldog of chavismo and he’s clearly the most relevant political leader within chavismo after the newly declared president-elect Nicolás Maduro.  Given the narrow victory that Maduro won, he may well now be chavismo‘s most relevant political leader.

That makes his rather subdued statement an important touchstone for where Venezuela’s ruling part is headed, and it’s somewhat more subtle than the full-speed-ahead, at-full-volume victory speech that Maduro delivered Sunday night.

Some background: he served as the governor of Miranda state from 2004 to 2008 — opposition candidate Henrique Capriles got his start in national politics in 2008 when he ousted Cabello by a seven-point margin to become the governor of Miranda.

Cabello has since 2012 been the president of Venezuela’s Asamblea Nacional (National Assembly), where the Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela) and its allies control 96 seats to just 65 for the opposition.

If Maduro’s victory is not overturned following an audit of the election results, the next electoral test for chavismo will come in December 2015, when Venezuela holds its next scheduled parliamentary elections, and it seems fairly possible that Cabello and the PSUV could lose their majority.

Venezuela

LIVE BLOG from Caracas: Election night in Venezuela

3 Comments

image

image

CARACAS, Venezuela — Polls closed at 6 p.m. (6:30 p.m. EST) and we have no results yet. Venezuela Flag Icon

Opposition candidate Henrique Capriles within the past hour tweeted that he was alerting the world that the chavista government is trying to subvert the will of the people.

Opposition leader Leopoldo López followed up with his own tweet warning the government that ‘we know what you know.’

That’s pretty aggressive.

Results weren’t announced in the October 2012 election until around 10 p.m., but an opposition campaign source noted a couple of days ago that the later the result is announced, the better for the opposition.

9:01 pm: Francisco Toro at Caracas Chronicles is reporting that a Capriles campaign quick count shows a very narrow lead for Capriles. That’s certainly more promising than an exit poll.

Meanwhile, at Capriles headquarters, the chairman of the Mesa de la Unidad Democrática (MUD, the Democratic Unity Roundtable), Ramón Guillermo Aveledo is very bullish. He says the opposition will wait for CNE (the National Electoral Council) to announce results, but threatens that the opposition will start announcing results if the CNE doesn’t. This is in contrast to a relative angrier and defensive appearance by Jorge Rodríguez, the campaign leader of the Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela), who spoke earlier to note that turnout was high, and called for calm.

9:16 pm: We’re sort of in new territory now.   If Capriles has indeed won, and every indications from Capriles headquarters are that he has, there’s no precedent for a peaceful transfer of power.  But after 14 years of chavismo, it’s hard to know what come next.  Even if Capriles has lost by a narrow margin, we’re in for a long (and perhaps tense) night.  Stay tuned.

9:30 pm: The Capriles campaign has the same votes as the CNE, but winning more votes doesn’t mean that CNE will just stand down, announce Capriles the winner, and thereupon peacefully transfer power.  The key arbiter in this scenario would the armed forces, and many of their leaders have a vested interest in a win by chavista candidate Nicolás Maduro.  So though the army’s leaders emerged relatively early in the evening to assert their role in protecting the vote, if Capriles has won, don’t expect an announcement, but a lot of behind-the-scenes negotiations between Capriles HQ and Maduro HQ.  After 14 years in power, and 14 years spent disrespecting much of the tenets of a liberal democracy, it’s going to be a lot more difficult.

9:35 pm: When I talked to Capriles advisers on Friday morning, they warned that if Capriles does win more votes than Maduro, the most aggressive chavista supporters, gangs of armed partisans, may well incite violence.  This is why Capriles has regularly appealed to the military to keep the peace.

When I talked to López, he struck a cautious note as well:

‘We hope that the people will be a buffer to that, the people not only voting, but the people in the streets, people defining their commitment with a new face for Venezuela,’ he said. ‘[The chavistas of course will have the intention of using what they’ve always used — violence, intimidation, abuse of power. But it’s in the hands of the people in the streets to hinder that.’

9:52 pm: We’re approaching the time when October 2012 election results were announced, and there’s not yet any indication that the CNE is about to announce a result in this election. In that election, Chávez defeated Capriles by 10.76%.

9:55 pm: As I wrote on Friday, the difference between Chávez and Capriles six months ago was 1.6 million votes — Capriles won 6.59 million votes and Chávez 8.19 million votes. Assuming the same base in today’s election for Capriles (6.59 million votes), Capriles needed to get either 19.5% of the chavista base to abstain, 9.75% of the chavista base to switch to Capriles from Maduro this time around, or some combination of the two — say, by having 9.75% abstention and a Maduro-to-Capriles swing of 5%. That’s never been incredibly outside the realm of possibility, especially given the late-breaking momentum of Capriles and the defensive campaign that Maduro’s run.

10:05 p: We’re now awaiting the first bulletin from the CNE.

10:10 pm: My source in the Capriles campaign says they won. So all eyes are now on the CNE.

10:17 pm: Pots are banging in the Sabana Grande neighborhood in Caracas. That’s the cacerolazo traditional form of protest from the esquálidos, the opposition supporters — so named because Chávez called them the ‘little squalid ones’ once upon a time. It’s a far cry from the toque de Diana that I heard earlier this morning, the horns blaring a reveille for 13 minutes starting at 3:30 a.m., long a chavista tradition. The change, in 19 hours, from the chavista horns to the caprilista pots banging, is a metaphor for the change in the air today as the opposition has become increasingly optimistic.

10:22 pm: Gunshots are ringing out — a clear sign that the chavistas want to make some noise too.

10:32 pm: It’s worth noting for non-Venezuelan readers that Hugo Chávez didn’t go undefeated in elections over his 14-year rule. He lost a referendum in December 2007 when he pushed to amend the constitution to abolish presidential term limits, curb central bank independence, and allow the president to assert more control over the selection of state governors and mayors. That overreach — and the failure of the chavista electoral machine — showed that Chávez and the PSUV wasn’t invincible.

10:40 pm: While we wait for some further news about what’s happening at the highest levels of Venezuela’s power struggle, it’s worth noting that the MUD is a very diverse group of political parties that have banded together for electoral purposes. If Capriles wins, he’ll not only face a National Assembly that’s still dominated by chavistas and an entire state infrastructure, from the bureaucracy of the government to the courts to Petróleos de Venezuela, S.A. (PDVSA) dominated by chavistas, but a very wide coalition that includes many parties. The MUD has been more successful than a previous coalition attempt, the Coordinadora Democrática, which disbanded in frustration after Chávez won a referendum to recall him from the presidency by a lopsided 59.1% to 40.6% margin in August 2004.

10:49 pm: One of the issues that Aveledo mentioned earlier tonight was the importance of every vote being counted, especially the votes of Venezuelans abroad. There’s a lot of doubt that those votes will ever fully reach Caracas, and the Miami consulate actively stood in the way of largely anti-Chávez Venezuelan expats, who traveled to New Orleans to vote in both October and again in this election. Reports from the Caracas airport earlier today suggest that only one passport agent was available to allow expats back into the country, obviously back in the country for the purpose of voting.

11:00 pm: It’s been exactly five hours since polls closed across Venezuela, and so far, radio silence from the CNE.

11:14 pm: Here come the rectors at the CNE. Maybe we’ll have an official announcement shortly. At the podium.

11:18 pm: The official announcement from the CNE, with 99.12% of votes counted is 78.71% participation, is 50.66% for Maduro to 49.07% for Capriles. Hard to believe the Capriles campaign is going to accept this, so the long night is about to get even longer.

11:23 pm: Gunshots and music blaring here in Sabana Grande. The official count is 7,503,338 for Maduro and 7,270,403 for Capriles. But no one believes that right now. First question is whether the government is making this announcement with the full support of the armed forces. Second question is whether the opposition MUD will now announce their own set of results — they have access to the same numbers as the government, so it will be interesting to see how long it takes to call their bluff.

11:24 pm: Maduro is now addressing the crowd (yes, in a tri-color jumpsuit!)

image

11:26 pm: Capriles will also address the Venezuelan people shortly.

11:35 pm: Maduro is saying that Capriles called and offered a formal pact, but he said no. Caracas is ablaze with the sounds of music and fireworks from Maduro supporters. So it will be interesting to see what Capriles has to say, presumably after Maduro is done with his speech at Miraflores. If this is the actual result, or if it’s fake, it certainly makes Maduro seem like he stole the election. As Francisco Toro writes at Caracas Chronicles tonight, it really is the worst-case scenario.

11:43 pm: The CNE and Maduro will support a full recount and audit of the votes.

11:46 pm: Does anyone know how many times he’s mentioned Chávez tonight? I’ve lost track, but at least a dozen.

11:52 pm: Maduro hasn’t even finished his speech (which I suspect has run so long to prevent Capriles from speaking anytime before midnight), but Argentine president Cristina Fernández de Kirchner has already congratulated him on his victory.

11:55 pm: Maduro is done speaking, so now the focus will shift to Capriles, who has a difficult task ahead of him. The 64,000-bolívar question is whether he accepts the CNE’s results (even with the audit) or declares his own victory on the basis of his campaign’s own information.

12:02 am: Actually, no, Maduro wasn’t done speaking. Here’s Fidel Castro’s response — simply, ‘Maduro’s won, the revlution continues.’ Not exactly a ringing endorsement.

12:11 am: OK, now he’s done, with a couple of ‘viva Chávez’ and a ‘hasta la victoria siempre.’

12:13 am: For the record, even if the CNE numbers ultimately turn out to be 100% correct, it would represent a drop-off of 680,000 votes from Chávez’s victory six months ago and a gain of 680,000 votes for Capriles. Turnout dropped by just 2%, so that’s around 296,000 votes, if we assume that that dropoff came mostly from the chavista camp. That means that 192,000 chavistas switched to Capriles, or Capriles picked up 384,000 new voters. Either way, it’s a huge victory for the opposition, given where he started a few weeks ago.

12:16 am: Here’s Capriles about to give his speech.

12:19 am: Holding up a stack of voting irregularities, Capriles denies Maduro’s story about a pact, calling him a liar.

image

12:23 am: Capriles will not concede or accept the result until a full recount has been held of each and every vote.

12:26 am: Says that the MUD has a different result than the one announced, but doesn’t provide the actual result.

12:27 am: ‘My pact is with God and Venezuela.’

12:30 am: Capriles is taking an aggressive tone as ever with Maduro, saying that if he was illegitimate before, he’s still illegitimate and that the results do not reflect the truth in the country. Nonetheless, Capriles is not declaring victory outright — he’s holding back from that step, at least por ahora.

12:39 am: Major general Wilmer Barrientos: “Quiero felicitar al Presidente Electo Nicolás Maduro, usted es el jefe de la Fuerza Armada Nacional Bolivariana.” So that’s where the armed forces stand.

Photo credit to Kevin Lees — Caracas, Venezuela, April 2013.

Venezuela

A primer on PDVSA — and the interaction of oil and politics in Venezuela

3 Comments

image

CARACAS, Venezuela — You’d think in Caracas that the governing party were the PDVSA, not the PSUV.Venezuela Flag Icon

But the state-owned oil company, Petróleos de Venezuela, S.A., functions as much as any other organ in Venezuela in service of the government, formerly headed by Hugo Chávez and now, Nicolás Maduro.

Indeed, a stroll through Caracas finds the PDVSA brand saturates the city — much more than the nominal governing party, the Partido Socialista Unido de Venezuela (United Socialist Party of Venezuela). Here’s a PDVSA-branded hopscotch:

image

PDVSA (pronounce it ‘pay-duh-vay-suh’) was founded in 1976 when then-president Carlos Andrés Pérez nationalized the oil industry at the height of an oil boom the likes of which Venezuela had never seen. Venezuela’s oil industry began in 1914 when the first oil well was drilled in Mene Grande, in western Zulia.  It began exporting petroleum by 1918, and that soon eclipsed an economy once based largely on cacao and coffee — though cacao production was dwindling in the early 20th century, Venezuela exported more coffee than any country in the world other than neighboring Brazil.

Venezuela was the world’s leading oil exporter by the end of the 1920s — Caracas was known as ‘the gas station south of Florida.’ We think of the Organization of Petroleum-Exporting Countries (OPEC) as a largely Middle Eastern cartel today, but it was founded in large part in 1960 on the initiative of Venezuelan energy minister Juan Pablo Pérez Alfonso, who helped create it after reaching out to his ministerial counterparts in Saudi Arabia.

Through the next 40 years, Venezuela’s fortunes rose and fell with global oil price, but PDVSA remained relatively at arm’s length from the government — it paid income taxes and royalties to the government, as well as dividends (because it’s entirely state-owned).

This continued even after Chávez was elected — until 2002, that is, when Chávez attempted to take control of PDVSA, leading to a rebellion/coup attempt and a general strike among PDVSA employees later that year. Chávez, as it turns out, simply fired most of the offenders, and over the past 11 years, PDVSA has become essentially an arm of the government, which itself increasingly became an organ of chavismo.

So PDVSA employees today wear red, the color of chavismo, and over the past decade, PDVSA has been a direct contributor of funds to social programs, bypassing the formal channels of government — and also incurring its own liabilities (indeed, the IMF’s estimate of Venezuela’s public debt of around 51% includes PDVSA debts as well).

Whatever the benefits to deploying that capital for social welfare programs (and I’m not arguing for or against), it means there’s simply less capital to maintain production or develop new avenues for refining oil.

Rafael Ramírez, a loyal chavista, was appointed minister of energy and petroleum in 2002 and PDVSA’s president in 2004. If Maduro wins the election, it’s expected that Ramírez will stay in place — and so will continuity in oil policy under the Maduro administration. If Maduro replaces Ramírez, however, it could be an indication that he wants to shake up some of his predecessor’s policies.

image

Oil proceeds represent around 95% of Venezuela’s exports, around 20% of its GDP and over 50% of the government budget. So what happens in the oil industry matters for what happens with Venezuela’s government and its economy. Continue reading A primer on PDVSA — and the interaction of oil and politics in Venezuela →

Venezuela

Photo essay: Political graffiti and street art in Caracas

1 Comment

image

CARACAS, Venezuela — Apropos of nothing, I wanted to collect some of the more interesting shots of political graffiti I’ve captured this week in Caracas.Venezuela Flag Icon

Most of the graffiti, of course, promotes the late president Hugo Chávez and his successor, acting president Nicolás Maduro, and not opposition challenger Henrique Capriles.

I’ll say one thing, though, and this goes well beyond street art: if any of my friends want to run for politics, I’ll send them to Caracas to talk to the chavistas because, while Capriles has a rapidly deteriorating economy, an aggressive campaign, and a defensive and lackluster Maduro all working in his favor, Maduro remains the favorite because the chavistas certainly know how to win votes.

Of course, standard political campaign banners abound throughout the city:

image

But even five weeks after his death, Chávez’s presence dominates the city, even on its sidewalks and on its buildings:

image

image

image

In fact, even the ‘libertador’ himself, Simón Bolívar has more street cred than Maduro:

image

Here’s a commemoration of the 2011 bicentennial of the Venezuelan Declaration of Independence:

image

But that’s not to say that Maduro isn’t a common enough presence (both in favor and against):

image Continue reading Photo essay: Political graffiti and street art in Caracas →

Venezuela

Capriles campaign optimistic with 48 hours to go — but can it win?

1 Comment

image

CARACAS, Venezuela — The national headquarters of Henrique Capriles on Friday morning buzzed with optimism, with less than 48 hours to go before polls open in a race that many have judged hopeless for the opposition.Venezuela Flag Icon

In the wake of a rally in downtown Caracas last Sunday that brought hundreds of thousands of supporters to rally behind Capriles (without having to bus in massive numbers of supporters from across the country, as the chavista candidate Nicolás Maduro did in a similar rally on Thursday), and in the wake of a widely ridiculed comment by Maduro that a little bird told him that the spirit of Hugo Chávez blessed his campaign, Capriles campaign advisers are optimistic that their candidate has the momentum going into Sunday’s election, especially as voters realize the extent of Venezuela’s rapidly tumbling economy in recent months.

But Maduro, who is hoping to win a full term in his own right after the 14-year rule of his predecessor, Chávez, has everything else — the implicit support of the structure of the entire government, the armed forces, the state-owned oil company, plenty of resources, and significantly stronger media presence.

Though election law prohibits the publication of polls in the week prior to the election, polls are rumored to show Capriles closing a gap with Maduro — one such poll allegedly shows Maduro with a narrowing 55% to 45% lead, and Capriles’s internal polls show a massive swing as well. But whittling down Maduro’s lead and winning the election are two different things.

Leopoldo López, the former mayor of Chacao (one of five municipalities, and generally the ritziest, within Caracas) from 2000 to 2008, is one of the rising stars of the opposition. Chávez’s government barred López from running for office until 2014, a move that brought the censure of the Inter-American Court of Human Rights. In 2009, he founded Voluntad Popular, a centrist party that’s a member of the broad opposition coalition, the Mesa de la Unidad Democrática (MUD, Democratic Unity Roundtable).

‘I’m excited about change, I’m excited about the real possibility of winning, I’m excited about Venezuela opening a new cycle,’ Lopez said on Friday morning at Capriles headquarters. ‘The worries? What the government could do to put a stain on what will happen. This is not a regular election. This is not Bush-Clinton, this is not Candidate A versus Candidate B. This is a race against a state. I doubt there are other democracies where there are [such] clear differences in terms of the abuse of power. In this case, this is PDVSA, the state oil company, and the other powers of the state, against the people. But we have great faith the people will make the difference.’

The executive director of the MUD, Ramón Guillermo Aveledo (pictured above, with Caracas mayor Antonio Ledezma and other top MUD officials at his right, rejected outlandish charges made in recent days at a press conference earlier today at Capriles headquarters as well.

Here’s the arithmetic. Continue reading Capriles campaign optimistic with 48 hours to go — but can it win? →

United States, Venezuela

A conversation with Ambassador Patrick Duddy

Leave a comment

image

CARACAS, Venezuela — For what it’s worth, here’s some more of the conversation from last Friday with Patrick Duddy, who served as the U.S. ambassador to Venezuela from 2007 until 2010 and who kindly gave me nearly a half-hour of time to discuss current U.S.-Venezuelan relations.

Venezuela Flag IconUSflag

The late president Hugo Chávez ejected Duddy from the country on September 11, 2008, though Duddy returned a few months later, and I was curious as to his view of U.S.-Venezuelan relations especially because he served under both U.S. presidents George W. Bush and Barack Obama.

Obama’s appointee to succeed Duddy, Larry Palmer, was rejected out of hand by Chávez in 2011, and the post continues to remain vacant.  Palmer now serves as ambassador to Barbados and the Eastern Caribbean.

Duddy, a veteran U.S. diplomat, has served throughout Latin America, including Brazil, Paraguay, Chile and Bolivia.

* * * * *

On the policy differences between the administrations of George W. Bush and Barack Obama on Venezuela:

It would be easier to underscore the commonalities between the Bush and Obama administrations. I served as ambassador from 2007 to September of 2008 for President Bush, and then as you know, I was expelled on Sept. 11, 2008, spent some months out of the country, [and] returned the next summer as President Obama’s ambassador…

Both administrations, while I was ambassador had a pretty clear message which was we thought… both sides would benefit from a more productive relationship.

On Maduro and potential U.S. relations in a Maduro administration: Continue reading A conversation with Ambassador Patrick Duddy →

United States, Venezuela

Growing U.S.-Venezuelan commercial ties won’t lead to diplomatic thaw if Maduro wins

1 Comment

image

CARACAS, Venezuela — I reported earlier today in Deutsche Welle on the state of U.S.-Venezuelan bilateral relations, which aren’t exactly gangbusters, if you’ve been paying attention for the past 14 years.

Venezuela Flag IconUSflag

The bottom line is: don’t expect acting president Nicolás Maduro, if he wins, to transform the chilly relationship between the United States and Venezuela.

To me, however, the more interesting factor is the commercial ties between the two countries, already strong throughout the reign of the late president Hugo Chávez, but now growing ever faster as Venezuela’s economy sputters and becomes increasingly import-dependent:

Venezuela’s obvious top export is oil – and the United States is its top customer, and that’s been true during both the Bush and Obama administrations, even when relations were at their worst. The United States purchases up to 900,000 barrels of oil a day from Venezuela – it officially funds around 40 percent of Venezuela’s export receipts. Given the complex financial arrangements between China and Venezuela and Venezuela’s subsidies to Cuba and to the rest of Central America and the Caribbean, US demand for oil has directly funded Chávez’s government, despite the rhetoric against the supposedly evil, imperialist gringo empire.

But precisely because of Venezuela’s dependence on the oil industry, the other sectors of its economy have atrophied, especially under the business climate during the Chávez era, when domestic and foreign businesses alike were subjected to ad hoc expropriation. That’s made Venezuela increasingly reliant on imports of staples, such as food and even fresh produce. Venezuela is even starting to import refined oil products, in part due to a gasoline subsidy that keeps gas prices at the lowest level worldwide.

Obviously, U.S. policymakers would prefer that Henrique Capriles, the opposition candidate, wins the election. But given the incumbent advantages of the Maduro campaign, who has inherited the political infrastructure of his predecessor, Maduro’s election seems much likelier. If the Venezuelan economy does continue its downward spiral in the months and years to come, Maduro could well use anti-American rhetoric to deflect criticism from the failures of economic policy.

That means bilateral relations might get worse before they get better.

It’s uncertain whether that growing dependence would improve ties with the US – it’s easy to envision a fall in gas prices or a financial crisis result in even more brinksmanship in a Maduro administration as a distraction from harder budget choices.

Photo credit to Kevin Lees — Caracas, Venezuela, April 2013.

Venezuela

Capriles could be the better guarantor of chavismo in Venezuela

1 Comment

image

I have an op-ed in The National Interest this morning arguing that it’s Henrique Capriles, and not chavista Nicolás Maduro, who could become the better long-term guarantor of the gains of chavismo — notably by making permanent the social welfare programs that the late president Hugo Chávez tried to implement on behalf of Venezuela’s poor:Venezuela Flag Icon

Chavistas certainly have a strong claim that for the first time since the discovery of the Mene Grande oil field in 1914 and oil production began in earnest in 1918, a significant share of the country’s oil wealth finally fell into the hands of the poorest Venezuelans. And the two-party duopoly of the center-right COPEI and the center-left Democratic Action crumbled in 1998 after years of petrodollar-fueled corruption. So Capriles’s campaign strategy, to a degree, is to admit that we’re all chavistas now. This time around he’s waged a more populist, more aggressive campaign that’s even reminiscent of Chávez’s tone, while Maduro is running a more defensive effort.

I’ve made this argument, though not as forcefully, previously before.

One way to look at this, though, is that Capriles has become dangerously populist — for example, he’s just as keen as Maduro to hike the minimum wage by 40%, and Capriles would do so immediately, not in a staggered way throughout 2013 — both would feed a worrisome inflation problem.  But campaign promises in the closing days of a campaign sometimes fail to find their way into policy.

Part of the argument in favor of Capriles simply must be a ‘throw-the-bums-out’ sentiment — the more nuanced version is to say that Capriles will not be constrained on day one to review and chuck out poor policies because he and his supporters have no vested interest in perpetuating the existing policy landscape.

It’s hard to believe that Maduro, ever the loyal soldier to Chávez, would have the institutional credibility within the governing PSUV, even after winning his own mandate, to stand up to the rampant corruption that now lies at the heart of Venezuela’s government. After a decade and a half in power, even governments in countries with more deeply entrenched respect for state institutions, separation of powers and checks and balances have a tendency toward corruption. British Columbia’s Liberal-run government faces ejection in May elections after just 12 years in power amid daily scandal headlines, for example.

It seems even less likely that Maduro could dislodge the other key policymakers that have directed the Venezuelan economy for over a decade, such as National Assembly president Diosdado Cabello, finance minister Jorge Giordani and energy minister Rafael Ramírez. So even if some inner-guard chavistas realize that Venezuela needs a new policy direction, Maduro will be hard-pressed to do so.