Tag Archives: venezuela

Cuba, United States

Six key questions about the landmark Cuba deal

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In one of the most significant foreign policy steps of his administration, US president Barack Obama announced widespread changes in the US-Cuba relationship on Wednesday, including the reestablishment of the first US embassy in Cuba in over a half-century and relaxed rules for US commerce, travel and engagement with the island nation of 11.25 million.cubaUSflag

It’s a historic play, and it yanks one of the biggest straw-men arguments out from under Cuba’s aging Castro regime. But the announcement brings with it more questions than answers for both the United States and Cuba, as the two countries begin negotiating a new chapter in a troubled relationship, even long before the 1959 Cuban Revolution, the failed 1961 Bay of Pigs / Playa Girón invasion and the 1962 missile crisis. Cuban disenchantment with the United States stretches back to at least the 1903 Platt Amendment that established unequal relations through much of the first half of the 20th century, culminating in the brutal regime of US ally Fulgencio Batista, overthrown in Castro’s 1959 revolution. Obama shrewedly signalled in his statement Wednesday that he understands the broader arc of Cuban-American relations by quoting José Martí, a founding father of Cuban independence who was killed in 1895 by Spanish forces.

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RELATED: Did Hillary Clinton just lose Florida
in the November 2016 presidential election?

RELATED: A public interest theory of the
continued US embargo on Cuba

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As the two countries, which represent two very different brands of political thought within the Western hemisphere, begin to set aside their differences, here are six questions that are as unclear today as they were last week. Continue reading Six key questions about the landmark Cuba deal →

Venezuela

Ramírez demotion headlines Venezuela’s cabinet reshuffle

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rafaelramirez

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. Venezuela Flag Icon

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 overvalued bolívar. 

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 →

Cuba, United States

Did Hillary Clinton just lose Florida in the November 2016 election?

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readyforhillary

The big headline today is that former US secretary of state Hillary Clinton’s upcoming memoirs, which will be released June 10, will state unequivocally that she believes she was ‘wrong’ about her vote authorizing force in Iraq in 2003.USflagcuba

But the potentially bigger news is that Clinton’s memoirs also state that she unequivocally opposes the US embargo on Cuba — a position that few politicians in the past half-century have dared, lest they draw the wrath of anti-Castro voters in south Florida, a key constituency in a state with 29 electoral votes, more than one-tenth of the electoral votes that Clinton would need to become the 45th president of the United States.

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RELATED: A public interest theory of the continued
US embargo on Cuba

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Here’s what The Associated Press reports:

In excerpts of the book “Hard Choices” obtained by The Associated Press ahead of its release next week, Clinton writes that the embargo has given communist leaders Fidel and Raul Castro an excuse not to enact democratic reforms. And she says opposition from some in Congress to normalizing relations — “to keep Cuba in a deep freeze” — has hurt both the United States and the Cuban people. She says the 2009 arrest by Cuba of USAID contractor Alan Gross and Havana’s refusal to release him on humanitarian grounds is a “tragedy” for improving ties.

“Since 1960, the United States had maintained an embargo against the island in hopes of squeezing Castro from power, but it only succeeded in giving him a foil to blame for Cuba’s economic woes,” she writes. She says her husband, former President Bill Clinton, tried to improve relations with Cuba in the 1990s, but the Castro government did not respond to the easing in some sanctions. Nonetheless, Obama was determined to continue the effort, she writes. She says that late in her term in office she urged Obama to reconsider the U.S. embargo. “It wasn’t achieving its goals,” she writes, “and it was holding back our broader agenda across Latin America. … I thought we should shift the onus onto the Castros to explain why they remained undemocratic and abusive.”

What Clinton writes is an understatement — regardless of your view on the Castros, it’s impossible to deny that the US embargo has given the Castros the kind of anti-imperial patina that have transformed them from run-of-the-mill socialist authoritarians into champions of Latin American sovereignty.

For the record, I have argued there’s room both to praise the Castros for their role leading the 1961 Cuban revolution and to denounce them for an ensuing half-century of economic negligence and political repression. It’s also understandable why, for two or three generations of Latin Americans who have felt the economic or military sting of US intervention, dating back to the 19th century, the Castros have achieved such an iconic status for their willingness to stand up to the United States.  Continue reading Did Hillary Clinton just lose Florida in the November 2016 election? →

Argentina, Books, Colombia, Cuba, Mexico, Peru, Venezuela

ESSAY: How Gabriel García Márquez introduced me to Latin America

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Whenever I go to México City, I marvel at the way its indigenous history integrates into the fabric of the city. Nahuatl words, like ‘Chapultepec,’ meaning grasshopper, and ‘Xochimilco,’ a neighborhood featuring a series of Aztec-created canals, pepper the geography of the city. Those are just two of hundreds of daily reminders rooting Latin America’s largest modern megapolis of 8.9 million in the language and traditions of its pre-Columbian past. It’s where the Virgin of Guadalupe, a young Nahuatl-speaking girl, apparently revealed herself to Juan Diego in 1531 as the Virgin Mary, instructing him to build a church, launching one of the most compelling hybrid religious followings in the New World. Even the inhabitants of the notorious Tepito barrio worship Santa Muerte on the first of November with bright flowers, cacophanous marimba and not a small amount of marijuana, in celebration of the magical chasm between what is, for many Tepito residents, a gritty life and an often grittier death.

It’s the way that México City blends the mysterious and the mundane, matches the sacred with the profane and so blends the line between the indigenous and conquistador that it’s hard to know who conquered what. For all of those reasons, I often think of it as the unofficial capital of realismo magico.

So it’s natural to me that the literary master of magical realism, Gabriel García Márquez, made his home in México City for much of the last six decades of his life. It’s also where García Márquez died on April 17 at age 87.

It was his uncanny ability to blend the realistic with the magical that largely won him such adoration worldwide. But what makes the writing of García Márquez and the other authors of the 1960s Latin American Boom so electrifying to me is the way that it blended the literary with the political. Certainly, García Márquez’s writing was about family, about love, about solitude, about power, about loss, about fragility, about all of these universal themes. But his writing also explicated many of the themes that we today associate with Latin America’s culture, identity, history and politics.

His death wasn’t entirely unexpected. García Márquez was diagnosed with lymphatic cancer all the way back in 1999 and by the beginning of the 2010s, he rarely made public appearances anymore due to the grim advance of Alzheimer’s disease. By the time I made it to Latin America for the first time, he was already approaching 80, and I knew I’d have little chance of meeting him.

That’s fine by me, because I always considered him, through his work, my own personal ambassador to Latin America. Over the course of several treks through Latin America, Gabo still accompanied me through his writing — and along the way, he shaped my own framework for how I think about Latin American life.

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(8) Going up the Argentine Andes 2

When I was planning my first trip to Latin America, I brought with me a copy of One Hundred Years of Solitude. I saved the novel for this very occasion, a trek from Buenos Aires to Mendoza and then by bus over the Andes to Santiago. Technically speaking, I was on the wrong end of the continent for García Márquez. I packed some Neruda, some Allende and some Borges — and some Cortázar, too (mea culpa, I still haven’t clawed enough time to read Hopscotch).

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Nevertheless, García Márquez’s words transcended the setting of his native Colombia. Hundred Years, published in 1967, just six years after the Cuban revolution that undeniably marked a turning point in its relationship with the behemoth world power to the north, it came at a time when Latin American identity seemed limitless, and García Márquez mined a new consciousness that wasn’t necessarily Colombian or even South American. So much of the story of Colombia’s development from the colonial era through the present day is also cognizably Bolivian, Chilean, Mexican or Argentinian. After all, García Márquez, already a well-known figure, went on a writing strike when Augusto Pinochet took power in Chile in 1973, ousting the democratically elected Socialist president Salvador Allende, who either committed suicide or was shot on September 11, the day of the coup.

It was an intoxicating read. The sleek brown corduroy blazer I picked up in Buenos Aires with the affected hint of epaulets on the shoulders soon became what I called my ‘Colonel Aureliano’ jacket. Besides, where better to buy a Spanish language copy of his work than El Ateneo, perhaps the most amazing bookstore in the world?

elateneo

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Hundred Years, of course, came highly recommended from the world that had discovered García Márquez decades before I was even born. It became an instant hit upon publication, catapulting García Márquez’s popularity beyond his more established peers, including México’s Carlos Fuentes and Perú’s Mario Vargas Llosa.

Bill Clinton, in his autobiography My Life, confesses to zoning out of class one day in law school to finish it:  Continue reading ESSAY: How Gabriel García Márquez introduced me to Latin America →

El Salvador

Sánchez Cerén narrowly leads Salvadoran presidential vote

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SSCortiz

Though El Salvador’s vice president, Salvador Sánchez Cerén, was expected to win the March 9 presidential runoff, the result was so tight that no winner has yet been formally declared, pending a recount of the too-close-to-call election.el salvador

Sánchez Cerén (pictured above, left, with running mate Óscar Ortiz, right) almost won the presidency outright in the first round on February 2, taking 48.92% of the vote, a nearly double-digit lead over his challenger, San Salvador mayor Norman Quijano, who won just 38.95%:

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Sánchez Cerén hopes to extend the rule of the Frente Farabundo Martí para la Liberación Nacional (FMLN, Farabundo Martí National Liberation Front), the one-time guerrilla group that is today El Salvador’s major leftist political party.  In 2009, Mauricio Funes, a former journalist, led the FMLN to its first-ever electoral victory, ending nearly two decades of post-civil war rule by the center-right Alianza Republicana Nacionalista (ARENA, Nationalist Republican Alliance).

On Sunday, however, provisional results show that Sánchez Cerén won just 50.11% of the vote, narrowly leading Quijano, who had 49.89% of the vote:

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How did this happen?

It wasn’t too difficult to realize, even before February 2, that the runoff vote would tighten.  That’s because in the first round, Sánchez Cerén easily consolidated the FMLN vote, while Quijano had to compete against Elías Antonio ‘Tony’ Saca, a conservative who served as president from 2004 to 2009.  Saca, following his presidency, was kicked out of ARENA, largely over allegations of corruption stemming from his presidential administration and his future presidential ambitions.  Accordingly, Saca led a third-party coalition against both Quijano and Sánchez Cerén in 2014.

Though Saca won a relatively disappointing 11.44% in the first round, it seemed clear that Quijano would win the majority of Saca supporters in the second round.  Taken together, the combined Quijano-Saca support totaled  50.39%, proving in the first round that there’s a basis for a center-right, conservative electoral coalition.  If Quijano were able to win almost all of the former Saca voters and/or win over a few first-round FMLN voters, he could leapfrog Sánchez Cerén and into the presidency.  Sunday’s provisional result seems to indicate that, though Quijano consolidated much of the conservative vote, it still wasn’t quite enough (though let’s wait for the full recount). Continue reading Sánchez Cerén narrowly leads Salvadoran presidential vote →

Venezuela

Politics turns violent in Venezuela

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altamira

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.Venezuela Flag Icon

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 →

Argentina, Venezuela

More thoughts on Venezuela and Argentina

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I discussed the dual economic crises in Venezuela and Argentina today on SiriusXM’s Cristina channel on ‘From Washington Al Mundo’ with Mauricio Claver-Caroné.argentinaVenezuela Flag Icon

It was an absolute pleasure — and Suffragio readers should check out the entire program on SiriusXM.  But in the meanwhile, here’s the audio from my segment.

The segment picks up from my piece last week in The National Interest, which tracks the similarities between the economic crises in both countries, but also the other similarities in their politics, their history, and the way that past governments handled neoliberal economic reform in the past.  So there are a lot of common threads that go beyond basic macroeconomic coincidences to the cultural, political and historical.

I also noted today that it seems like Argentina is a half-step or so behind Venezuela in terms of its economic crisis.  It’s only just now starting to feel the real crunch of a dollar shortage.  The headline this week is about a ketchup shortage, and that’s the kind of headline that featured in Venezuela last year — shortages of everything from toilet paper to holy water.

Anyway, please do check out the audio if you’re interested — I’ve only started to do television and radio interviews, so I’m learning as I go.

Argentina, Venezuela

Will Venezuela or Argentina be the first to crumble into economic crisis?

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kirchnermaduro

I write tomorrow for The National Interest about the dual economic crises in Venezuela and Argentina.argentinaVenezuela Flag Icon

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.

Venezuela

Chavismo offers no solutions for Venezuela’s violent crime

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monicaspear

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.Venezuela Flag Icon

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), but Observatorio 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.

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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 →

14 in 14, Australia, CAR (Centrafrique), Catalonia, DRC / Congo, Eritrea, European Union, France, Germany, Iran, Italy, Japan, Kenya, Mali, Mauritania, Saudi Arabia, South Sudan, Spain, United States, Venezuela, Vietnam

14 potential game-changers for world politics in 2014

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2014crystalball

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.

We start in France… Continue reading 14 potential game-changers for world politics in 2014 →

Venezuela

After local elections, what next for Venezuela’s government?

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maduro8D

Earlier this month, Venezuela held municipal elections — the last set of elections that will take place until the end of 2015.Venezuela Flag Icon

The results came after an extraordinary month in Venezuela, when president Nicolás Maduro obtained an Enabling Law, a decree for extraordinary powers from the Asamblea Nacional (National Assembly), a radical step that gives Maduro fast-track powers to regulate the Venezuelan economy for a year.  At the time, Diosdado Cabello, the president of the National Assembly, said that Maduro asked the National Assembly to ‘pass all the laws necessary to wring the necks of the speculators and the money launderers.’  In an even more radical move earlier that week, Venezuelan forces commandeered top electronics retail chain Daka, forcing price cuts that launched a frenzy of consumer spending at low prices.  Critics called the spectacle the ‘CaDakazo,’ a play on the 1989 Caracazo riots, protests and looting in response to the government’s decision to implement an IMF reform package of significant fiscal adjustments.

Short of a magical rise in the price of oil, Venezuela’s inflation (already around 54% this year), the shortage of basic goods and services (fueled by rise in dependence on imports and a shortage of dollars), and increasingly troubled finances mean that Venezuela’s economy will only worsen over the next two years.  Despite all that Venezuela’s been though in the past 14 years since Chávez first took power, the current economic crisis could get much, much worse.  Maduro’s first year in office has the feel to it of the first 30 minutes of a really chilling horror film — you know you have another 90 minutes of terror ahead of you, and there’s nothing you can do about it.

In light of the massive government-forced handout of retail electronics in November, it’s not surprising that the governing Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela) won a greater share of the vote than the umbrella opposition group, the Mesa de la Unidad Democrática (MUD, the Democratic Unity Roundtable).  The actual numbers vary, depending on which third parties you classify as PSUV/Maduro supporters, which you classify as opposition allied with Capriles and the MUD and which are really, truly independent.

But generally speaking, the chavistas won around 48.8% to just 40.8% for the MUD.  Though the opposition dominated Venezuela’s urban centers and it easily retained the mayor’s office in Caracas, it won Barinas (the state capital of Chávez’s home state), Valencia and Barquisimeto.  But it only narrowly held on in  Maracaibo, the second-most populous city, and the national vote tally is much worse than in April, when Capriles very narrowly lost the presidential election to Maduro.  Though Capriles appears to command unity as the leader of the united opposition, there are cracks in the unity — popular opposition figure Leopoldo López has argued for a stronger street presence and a more muscular opposition to Maduro.  López’s party Voluntad Popular (Popular Will) performed especially well in the local elections, and you should expect to see and hear much more from López in 2014 and beyond.

But where does Venezuela go from here?  There are 24 months until the next major Venezuelan elections, the parliamentary vote to determine the composition of the National Assembly.  In a country like Venezuela, where the economy is rapidly disintegrating, that’s quite a long time for the status quo to hold.  Stunts like the ‘CaDakazo’ can only buy Maduro and the PSUV short-term delays — they don’t constitute long-term solutions for Venezuela’s growing economic crisis.

Imagine for a moment that you’re sitting in Miraflores, the Venezuelan presidential palace, and the future that you see is massive hyperinflation, continued shortages and economic decline.  You don’t face the prospect of a recall for three more years, and you wouldn’t face reelection until 2019.  So why worry about Capriles and the MUD?  Wouldn’t you be most worried about internal PSUV threats?  Like Cabello, a crafty operator with plenty of ideological flexibility, who has a separate power base from his perch as the president of the National Assembly.  Perhaps you’d be worried about another young chavista, with the same kind of charisma as Chávez had, rising up to reclaim the ‘true’ mantle of chavismo.  The Venezuelan military currently supports Maduro, but given sufficient time, might they reach a point where the economy (and the accompanying social unrest) becomes so bad that they intervene themselves?  

When Maduro replaced longtime finance minister Jorge Giordani, an instinctive central planner, with the more pragmatic former central bank president Nelson Merentes, there was a brief window when fundamental economic reform seemed like a possibility.  But with local elections looming, Maduro doubled down on state intervention in the economy — Giordani, who remained planning minister, continues to wield more influence over policymaking, and Rafael Ramírez, the longtime energy minister, replaced Merentes as Venezuela’s vice-president for economic matters in October. 

Having essentially won those elections, Maduro has some breathing space to take the kind of steps that could give Venezuela’s economy a chance, though time is running short.  Moody’s already downgraded Venezuelan debt to Caa1 last week — essentially, junk status.

The current problem of shortages are due to the fact that Venezuela is bringing in fewer dollars, which in turn must support rising demand for imports.

That’s partly due to the long-term economic tectonics of a petrostate — in Venezuela (as in Saudi Arabia or Qatar), it’s easier to get your hands on oil wealth than it is to try to generate new wealth.  Over time, that means non-oil industries wither as the country becomes more dependent on oil revenues to finance other goods and services.  But chavismo has made this worse — 14 years of ad hoc expropriations of Venezuelan businesses severely exacerbated the effect.  The long-term solution is to find a way to diversify Venezuela’s economy away from oil, while maximizing the effectiveness of Venezuela’s oil wealth.  When a country with as much oil as Venezuela is importing refined oil products from the United States, there’s clearly a problem with overdependence on imports.

What’s staggering is that Venezuela still reportedly has a trade surplus — so while it still might technically be able to afford its costly import habit, it’s getting harder and harder to feed that habit.  After all, many Venezuelans have other uses for dollars than importing toilet paper for resale.

So what’s a former-bus-driver-turned-president to do? Continue reading After local elections, what next for Venezuela’s government? →

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Show us the long-form, Nicolás! (In which ‘birtherism’ comes to Venezuela.)

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So birtherism isn’t limited to the United States and the tea party movement’s nutty claim that US president Barack Obama was actually born in Kenya and not in the US state of Hawaii. Venezuela Flag Icon

As it turns out, Venezuelan president Nicolás Maduro is taking some heat over accusations that he was actually born in Colombia, not in Caracas, the capital of the country that he leads.

Maduro’s government is sinking under the weight of power outages, a return to expropriation (including a local toilet paper factory) and continued shortages of basic goods due to inefficient foreign currency exchange and a gap between the real and official value of the Venezuelan bolívar, which has led to ridiculous means to game the Venezuelan currency — one story earlier this week demonstrated how flights out of Venezuela are nearly 100% booked for months in advance as a way to arbitrage the difference in the official and actual rates.

Maduro, whose country is essentially locked out of conventional global debt markets, went to Beijing earlier this week (pictured above) to procure another $5 billion in financing (and $14 billion in development of Venezuela’s oil-rich Orinoco belt) from the Chinese government.  He picked another odd fight with the United States and came up with a truly nutty excuse for skipping the UN General Assembly meeting this week, which follows the possible implication of Venezuela’s government in the brazen attempt to transport 1.3 tones of cocaine from Caracas to Paris on an Air France flight earlier this month.

Rumors have swirled over the past months about Maduro’s birthplace and his nationality, but his chief rival in the April presidential election, Henrique Capriles, the governor of Miranda state, is ratcheting up the pressure.  Capriles and Walter Márquez, an opposition member of Venezuela’s Asamblea Nacional (National Assembly), took up the claim yesterday that Maduro was born in Bogotá:

Márquez claimed that he has documents and testimonies attesting to Maduro’s dual nationality.  “Nicolás Maduro lived in the Carora neighborhood, in Cúcuta (Colombia). There are testimonies of people who spent time with him. We found the record of the birth certificate of Nicolás Maduro’s mother. She was born in Cúcuta. I contacted people who can testify that Maduro was born in Bogotá,” Márquez stressed.

Márquez added that so far the supporting documents attesting that Maduro’s father is a Venezuelan have not been found. “We have a copy of the marriage certificate of his (Maduro’s) parents, and the birth certificate of his older sister. Later on, I will disclose documental and testimonial evidence proving Maduro’s Colombian nationality,” he stressed.

Maduro’s doing a pretty good job of discrediting himself these days, so further discrediting Maduro (instead of chavismo more generally) won’t by itself do much good for the opposition — and it could backfire against them.  By pursuing a ‘birther’ strategy, the opposition is giving the Venezuelan military or rivals within the chavista elite, such as National Assembly president Diosdado Cabello, an opportunity to remove Maduro and start anew once Venezuela’s basketcase economy truly hits rock bottom.

Even if Márquez and Capriles somehow had smoking-gun proof that Maduro was somehow ineligible for the Venezuelan presidency, it’s also pretty clear that Maduro could claim that he renounced his Colombian citizenship or he could do so and still remain eligible for the presidency.  But even if he didn’t, does anyone think that a chavista-dominated court system would even entertain removing Maduro from office?  It’s hard to see just why the opposition is pursuing this strategy, because it telescopes to the Venezuelan electorate that Capriles and the opposition are less interested in making their lives better than scoring political points — or even plotting a strategy that could win power.

But under the constitutional process for nationality in Colombia and Venezuela, it’s easy to see how Maduro might wriggle out of any ‘birther’ scandal, even without leaning on Venezuela’s corroded state institutions.

Article 41 of Venezuela’s ‘Bolivarian’ constitution — promulgated by late president Hugo Chávez in 1999 — states that only Venezuelans by birth who have no other nationality shall be permitted to hold the offices of President: Continue reading Show us the long-form, Nicolás! (In which ‘birtherism’ comes to Venezuela.) →

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Where Capriles and the Venezuelan opposition go from here

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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.Venezuela Flag Icon

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.

So what happens next — and how does the opposition think about the future?  Continue reading Where Capriles and the Venezuelan opposition go from here →

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‘Pragmatic’ Merentes winning control over Venezuela economic policy, but to what end?

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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.Venezuela Flag Icon

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? →

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

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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 →