Tag Archives: Venezuela

Venezuela spins at the rim of a black hole

Demonstrators clash with police during a rally against Venezuela’s President Nicolas Maduro in Caracas, Venezuela May 1, 2017. REUTERS/Carlos Garcia Rawlins

JONATHAN MANTHORPE: International Affairs
May 5, 2017

Venezuela is being sucked into a political and social vacuum because neither its local leaders nor regional players have the slightest idea where the country of 30 million people should be heading or how to get there.

The awful probability is that the vacuum will be filled by violence. That’s usually what happens when human societies lose their way.

For over a month Venezuela’s cities have been in turmoil as supporters of the opposition Democratic Unity Movement (MUD) alliance demand that President Nicolas Maduro be removed and that new presidential elections be held. He is accused at home and abroad of creating an authoritarian regime, filling the jails with political prisoners, gross incompetence and corruption in managing the economy of one of the world’s major petro states, and of standing idly by as the country’s people suffer from shortages of food, medicines and all the basic necessities of life.

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Maduro and his United Socialist Party of Venezuela (PSUV) shout back that they are the victims of a plotted regime change orchestrated by Washington in partnership with Venezuela’s business classes.

Over 30 people have been killed and hundreds injured in these demonstrations, with both the protesters and the authorities ratchetting up the level of force and violence day by day.

Venezuela has been heading for a cataclysmic denouement since the death of its strutting rooster leader Hugo Chavez in 2013. Indeed, many people, both among Venezuela’s opposition parties and its despairing neighbouring countries, would argue that the country’s collapse began when Chavez came to power in 1998.

Maduro was Chavez’ Vice-President and took over when Chavez died of cancer on March 5, 2013. The collapse of oil prices and loopy economic policies based on Chavez’ ignorant but melodramatic devotion to the 19th Century South American “Liberator” Simon Bolivar have accelerated the collapse. The PSUV lost control of the National Assembly in December elections last year and fears, with good reason, that in anything like a free and fair election voters would take the presidency from them too.

So Maduro is writhing like a trapped python. In March, the Supreme Court, which is controlled by Maduro and his supporters, moved to dissolve the National Assembly and assume the legislative powers itself. Maduro was forced to backtrack after an international outcry, though the National Assembly remains largely powerless.

One of the main critics of the Maduro regime has been the Organization of American States (OAS). Last year the OAS brandished its Democratic Charter and rebuked Maduro for smothering opposition, locking up political opponents and ruling by decree.

Late last month the Maduro regime announced it will pull out of the OAS, an exit that will take two years to complete.

On Monday, in his efforts to complete the neutering of the National Assembly, and to ensure he is not subject to recall and a new presidential election, Maduro announced he would invoke Article 347 of Chavez’s 1999 constitution. Maduro said he will convene a “citizens’ constitutional assembly to advance state reforms and a national peace agenda.”

Calling the assembly, Maduro said, was necessary to “defeat fascist attempts at a coup” through invoking the sovereignty of the people to “impose peace, harmony, and true national dialogue.”

What exactly that means and what sort of institutions or processes the assembly will produce is anyone’s guess. What seems certain is that Maduro aims to conclusively sideline the National Assembly and create in the citizens’ assembly an alternative legislative body.

The assembly will have 500 members who will be selected from among peasant and grass roots organizations, which, for some unfathomable reason, mostly remain loyal to the fantasy of the “Bolivarian Revolution” spun by Chavez in his hypnotic four, five and six-hour speeches.

All this could be dismissed as farce and comedy if the opposition was at all co-ordinated, and had a coherent vision of where it wants Venezuela to go and how to get there. But it does not.

The unfortunately named MUD is a “roundtable” coalition of 15 political parties. These range from insignificant, but charming parties like the Fearless People’s Alliance, to heavy-hitters like Voluntad Popular, Primero Justicia, Vente Venezuela, and Democratic Action.

However, MUD members have been unable to develop a clear strategy for what they want and how to get there. For example, recent demands from various MUD members include the resignation of Maduro, immediate national elections, immediate elections for state governors, the release of political prisoners, the jailing of Maduro and his senior officials, and even that the United States be invited to remove Maduro.

Former U.S. President George W Bush did conspire with Venezuela’s business leaders and elements of the military in 2002 to remove Chavez. But after only 47 hours out of office Chavez was returned to power by a combination of loyal military officers and mass peasant demonstrations.

Bush was never that enamoured of the Venezuelan adventure and Donald Trump might be even more unwilling to assist in the removal of Maduro.

One of the more entertaining stories to emerge from the Venezuelan cataclysm is that Maduro’s government stumped up $US500,000 to help finance Trump’s inauguration. The story is all the more delightful because it also involves the Russian oil giant Rosneft, and seems to have been a spin-off from the belief in the Kremlin that Trump was a friend who would soon lift sanctions against Russia.

Venezuela’s state oil company PdVSA is, like the rest of the economy, in need of life support. For PdVSA this comes in loans from Rosneft. But in January PdVSA had to offer Rosneft a 50 per cent stake in its U.S. subsidiary, Citgo Petrol, as collateral for a $US1.5 billion loan. However, Rosneft could not take control of Citgo, which owns oil terminals, pipelines and three refineries in the U.S., because of Washington’s sanctions against the company and its chief executive, Igor Sechin, stemming from Moscow’s support of Ukrainian separatists and its annexation of Crimea.

Soon after, Citgo made the $US500,000 donation for Trump’s inauguration celebrations, according to a report by the U.S. Federal Election Commission. Citgo was apparently the vehicle for the donation because as a U.S. affiliate, it avoided the ban on foreign donations for these kinds of jollifications. And because of sanctions, the Russians couldn’t directly stuff money into Trump’s accounts. But it remains a question whether this money was a gift from Maduro or from Russian President, Vladimir Putin.

Trump and his Secretary of State, Rex Tillerson, are intent on castrating the State Department. Senior desk officers responsible for Western Hemisphere affairs are yet to be appointed in the department. The result is that there is no coherent view on Venezuela on which members of Congress can base opinions. Even the Pentagon – apparently Trump’s preferred agent of foreign policy – has put forward various options such as direct intervention, sanctions and diplomatic leverage through the OAS.

With Maduro’s withdrawal from the OAS the chances of that being a useful channel for a negotiated settlement appear to have shrunk to nil. Another regional organization, the South American Union, has made some approaches to Caracas, but with little result. Mercosur, the free trade organization for South American countries, has suspended Venezuela’s membership, so its ability to influence Maduro is very limited.

Venezuela called a meeting of the Community of Latin American and Caribbean States on May 2 to try to get a vote of support for Maduro’s constituent assembly ploy, but too few delegates turned up for Caracas to succeed.

There are some efforts to promote a negotiated settlement by neighbouring countries that continue to support Maduro – Nicaragua, Bolivia and Ecuador – but there are no results at the moment and little cause for optimism.

Individuals spoken of as potential mediators have been no more willing to get involved in the Venezuelan vortex than have countries or regional organizations. One unwilling candidate, Uruguay’s former President, Jose Mujica, brushed the suggestion aside saying: “I am not a magician.”

Neither, it seems is Pope Francis. The Pope was elected to office at about the same time that Maduro took over from the bitterly anti-Catholic Chavez. Maduro, however, used Pope Francis’ reputation as a leftist populist, and a South American one to boot, to try to portray the Pontiff as an ally of Bolivarian socialism.

For a brief period last year the Vatican did sponsor talks between Maduro’s regime and the opposition. Those talks fell apart, however, when Maduro failed to meet conditions for them to continue, especially the release of political prisoners.

From the few brief remarks that Pope Francis has made about Venezuela recently, it appears that release of political prisoners is the Vatican’s minimal requirement before getting involved again.

But the relationship between Maduro’s regime and the Catholic Church has now deteriorated to violence. During Holy Week services marking Easter last month, government “Chavistas” invaded parish churches to disrupt the services. Maduro’s civilian paramilitaries even interrupted a mass being held by Cardinal Jorge Urosa Savino of Caracas on April 12, shouted threats and attempted to attack him. The Cardinal was shielded from the attack by his attendants, but the Chavistas injured several members of the congregation and looted the church.

The way things stand, it is hard not to think that life in Venezuela is going to get a lot worse before it gets better.

Copyright Jonathan Manthorpe 2017

Contact Jonathan Manthorpe, including for queries about syndication/republishing: jonathan.manthorpe@gmail.com

You may be interested in these stories from our archives:

Venezuela’s drawn-out agony nears crisis

A non-operative water tank is seen in a neighbourhood called "The Tank" in the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins This weekend’s largest military exercises ever by Venezuela may reveal whether the country is heading merely for an accelerated political and economic melt-down, or a full-blown civil war.

Venezuela’s struggle to keep the lights on, by Reuters  Report/Photo-essay

Residents of Venezuela’s southern city of Puerto Ordaz enjoy pleasant views of the Orinoco and Caroni rivers and are a half hour’s drive from one of the world’s biggest hydroelectric dams. Yet most days they suffer water and power cuts.

Oil slump devastates Venezuela, by Jonathan Manthorpe, column

Venezuela’s grey and featureless President, Nicolas Manduro, the default successor to that preening, strutting rooster Hugo Chavez, is set to become the first head of government felled by tumbling oil prices. It’s just a matter of who gets their boot lined up first to kick him out the door.

Venezuelan opposition fractures over ballots or bullets to win power. by Jonathan Manthorpe, column (from our 2014 archives)

Jonathan Manthorpe is the author of “Forbidden Nation: A History of Taiwan.”

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Manthorpe B&WJonathan Manthorpe is a founding columnist with Facts and Opinions and is the author of the journal’s International Affairs column. He is the author of “Forbidden Nation: A History of Taiwan,” and has been a foreign correspondent and international affairs columnist for nearly 40 years. Manthorpe’s  nomadic career began in the late 1970s as European Bureau Chief for The Toronto Star, the job that took Ernest Hemingway to Europe in the 1920s. In the mid-1980s Manthorpe became European Correspondent for Southam News. In the following years Manthorpe was sent by Southam News, the internal news agency for Canada’s largest group of metropolitan daily newspapers, to be the correspondent in Africa and then Asia. Between postings Manthorpe spent a few years based in Ottawa focusing on intelligence and military affairs, and the United Nations. Since 1998 Manthorpe has been based in Vancouver, but has travelled frequently on assignment to Asia, Europe and Latin America.

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Venezuela’s drawn-out agony nears crisis

JONATHAN MANTHORPE: International Affairs
May 21, 2016

A non-operative water tank is seen in a neighbourhood called "The Tank" in the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins

A non-operative water tank is seen in a neighbourhood called “The Tank” in the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins

This weekend’s largest military exercises ever by Venezuela may reveal whether the country is heading merely for an accelerated political and economic melt-down, or a full-blown civil war.

Besieged President Nicolas Maduro authorised the demonstration of military might as public clamour mounts for a referendum to depose him. Nearly two million people have signed a petition demanding his recall. Four million signatures are needed under the constitution — and polls show about 70 per cent of the country’s 30 million people want Maduro out of office this year.

Maduro has dismissed the referendum call, and he imposed a state of emergency a week ago, giving himself added powers to impose civic order and control the economy. On Friday, the Supreme Court ruled that Maduro’s emergency decree is constitutional in the face of “the extraordinary social, economic, political, natural and ecological circumstances that are gravely affecting the national economy.”

Maduro was also responding to a tidal surge of street demonstrations sparked by shortages of even the most basic commodities, regular power cuts, and water rationing. Protesters have been dispersed by riot squads using truncheons and tear gas.

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On Thursday, Maduro warned that the country faces “a state of internal upheaval,” and threatened to ratchet up the response by security forces. In this climate, the military exercise and the Supreme Court ruling are far more likely to heighten tensions, with the prospect of expanding violence, than to damp them down.

One element of the economic crisis is that many factories have stopped working, saying they cannot buy the necessary components and ingredients for their products. Even the country’s main brewery has pulled down the shutters because the owners say they cannot import the barley they need to make beer. On Friday, Coca Cola announced it is suspending production in Venezuela because of a shortage of sugar.

Maduro this week threatened to take control of closed factories if their owners do not re-open them. The factory closures, he says, are part of a right-wing conspiracy to eject his government. Maduro, blames the country’s ills on opposition to his party’s socialist revolution by Venezuela’s conservative business and industrial classes, and United States “imperialism.” He accused the U.S. of sending spy planes into Venezuela’s airspace, an echo of past accusations by Caracas governments that Washington is attempting to engineer regime change.

Venezuela’s simmering political discord came to a head in December when the opposition Unity Movement won a two-thirds majority in the National Assembly. That win came after a campaign in which the opposition pledged to remove Maduro from office before his six-year term is up in 2019. The plan is to demand a referendum to recall Maduro, and to trigger a new election rather than have him succeeded by his Vice-President, Aristobulo Isturiz.

Maduro is a former bus driver and union leader who rose to be Vice-President in the United Socialist Party administration of the buffoon braggart, President Hugo Chavez. When Chavez died in 2013, Maduro succeeded him, but won only a shade over 50 per cent of the vote in a special election held soon afterwards. Since then, Maduro has ruled by decree, though to say he has “ruled” is overgenerous. His three years in power are marked by an extraordinary inability to come to grips with any of the ills besetting Venezuela.

But then, he inherited a poisoned chalice.

Chavez, an army captain, dreamed-up the authoritarian socialist “Bolivarian Revolution” that has destroyed what was once one of Latin America’s best performing economies. This socialist theology was based on a selective and myth-infused reading of the story of South America’s 18th and early 19th century “liberator,” Simon Bolivar. Chavez first used his soap opera philosophy to try to launch a military coup in 1992. When that failed, he went semi-legit, and won the presidential election in 1999. He remained president until he died of cancer in 2013. In a move worthy of the iconography of North Korea’s ruling Kim family, Chavez in July, 2014, was declared Venezuela’s “Eternal President.”

As he struggles to cling to power, Maduro is evoking the revolutionary imagery and verbiage of the 1960s and 1970s that inspired Chavez and made him the best friend of the withering Castro brothers’ regime in Cuba. “We are going to tell imperialism and the international right that the people are present with their farm instruments in one hand and a gun in the other … to defend this sacred land,” Maduro said this week.

Venezuela, which has the world’s largest oil reserves – larger even than those of Saudi Arabia – has one of the world’s worst-performing economies. The economy shrank by about 10 per cent last year according to the International Monetary Fund. The economic performance is expected to be even worse this year.

Seldom, if ever, has there been a more pitiable example of the perils of the “Dutch Disease” – the deplorable effects on the economy or over-reliance on the export of natural resources. Oil accounts for 95 per cent of Venezuela’s exports and 50 per cent of its gross domestic product. The Caracas government formerly needed international oil prices of only about $US50 a barrel to cover all its spending obligations. While the price has been up around $US100 a barrel for the last few years, Chavez and Maduro should have been stuffing money away for non-oil economic development and a sovereign wealth fund. Instead the money wafted off into clouds of corruption and ideology-inspired economic nonsense. The result is that the government now needs the international price of oil to be up around $US120 a barrel in order to cover its budget. That is unlikely to happen in the foreseeable future.

The fall-out from nearly 17 years of this comic opera is tragic.

Inflation is running up around 300 per cent, and could approach 1,000 per cent by next year. Unemployment is at 17 per cent, is much higher among younger work-age Venezuelans, and will probably reach at least 21 per cent this year.

More than 70 per cent of Venezuelans live below the World Bank poverty line, of incomes worth less than $US2 a day. This too will likely get worse over the course of this year.

One social consequence of the government’s gross ineptitude is that Venezuela has the second highest murder rate in the world, just behind Honduras. The capital, Caracas, has the worst murder rate of any city outside declared war zones.

What is surprising is that the ruling United Socialist Party has not removed Maduro to try to avert the looming crisis. One reason is that the party’s name is inaccurate. It is not united. It is a grab-bag of querulous factions who, like their strutting rooster founder Chavez, are unable to demean themselves to compromise, even as the driverless bus rushes towards the cliff.

Opposition leader Henrique Capriles said this week Venezuela is “a time bomb that can explode at any given moment.” His Unity Movement and other opposition groups have promised further demonstrations demanding Maduro’s departure, even in the face of Maduro’s threat to use the army against protesters.

Capriles says Venezuela is approaching a “moment of truth.” Truth has little to do with it. What will determine the outcome is what the army decides to do in the next few days and weeks.

Copyright Jonathan Manthorpe 2016
Contact: jonathan.manthorpe@gmail.com. Please address queries about syndication/republishing this column to jonathan.manthorpe@gmail.com

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You might also enjoy these stories:

Venezuela’s struggle to keep the lights on, by Reuters  Report/Photo-essay

Residents of Venezuela’s southern city of Puerto Ordaz enjoy pleasant views of the Orinoco and Caroni rivers and are a half hour’s drive from one of the world’s biggest hydroelectric dams. Yet most days they suffer water and power cuts.

Oil slump devastates Venezuela, by Jonathan Manthorpe, column

Venezuela’s grey and featureless President, Nicolas Manduro, the default successor to that preening, strutting rooster Hugo Chavez, is set to become the first head of government felled by tumbling oil prices. It’s just a matter of who gets their boot lined up first to kick him out the door.

Venezuelan opposition fractures over ballots or bullets to win power. by Jonathan Manthorpe, column (from our 2014 archives)

Jonathan Manthorpe is the author of “Forbidden Nation: A History of Taiwan.”

 

Manthorpe B&WJonathan Manthorpe is a founding columnist with Facts and Opinions and is the author of the journal’s International Affairs column. Manthorpe has been a foreign correspondent and international affairs columnist for nearly 40 years. Manthorpe’s  nomadic career began in the late 1970s as European Bureau Chief for The Toronto Star, the job that took Ernest Hemingway to Europe in the 1920s. In the mid-1980s Manthorpe became European Correspondent for Southam News. In the following years Manthorpe was sent by Southam News, the internal news agency for Canada’s largest group of metropolitan daily newspapers, to be the correspondent in Africa and then Asia. Between postings Manthorpe spent a few years based in Ottawa focusing on intelligence and military affairs, and the United Nations. Since 1998 Manthorpe has been based in Vancouver, but has travelled frequently on assignment to Asia, Europe and Latin America.

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F&O’s CONTENTS page is updated each Saturday. Sign up for emailed announcements of new work on our free FRONTLINES blog; find evidence-based reporting in Reports; commentary, analysis and creative non-fiction in OPINION-FEATURES; and image galleries in PHOTO-ESSAYS. If you value journalism please support F&O, and tell others about us.

 

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Venezuela’s struggle to keep the lights on

The government of Venezuela, once oil-rich and the fat cat of Latin America, is fighting for its political life after oil prices plunged and drought struck. The government declared a state of emergency, on Friday May 13. Behind the politics are ordinary people, such as the residents of Puerto Ordaz, struggling with a lack of power and water.

By Reuters
May, 2016

A non-operative water tank is seen in a neighbourhood called "The Tank" in the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins

A non-operative water tank is seen in a neighbourhood called “The Tank” in the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins

Residents of Venezuela’s southern city of Puerto Ordaz enjoy pleasant views of the Orinoco and Caroni rivers and are a half hour’s drive from one of the world’s biggest hydroelectric dams.

Yet most days they suffer water and power cuts.

The irony is not lost on Marelis Gonzalez, who runs the “Las Chinas” food store. She is fed up with constant outages that halt her fridges, making drinks lukewarm and spoiling meat.

“We should be the last ones without power or water,” Gonzalez tuts at the counter on an oppressively hot morning without services in the middle-class, hilltop Villa Brasil district. “If it’s like this for us, imagine those far away!”

Across the road, 82-year-old Arcelia Leandro is waiting patiently in her kitchen for power and water to cook lunch for her grandchildren. “It’s been like this for three months, cuts every day. We’ve never had a situation like this. Horrible.”

Venezuela’s energy and water problems have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods.

Officials in President Nicolas Maduro’s socialist government say they can hardly believe their bad luck. After the global oil price collapse slashed revenues by more than half, along came the drought-inducing El Niño weather phenomenon.

That has sent water levels at the all-important Guri dam and hydroelectric complex, just south-west of Puerto Ordaz, to a record low and nearing a critical 240-meter level where some turbines would be inoperable.

“It’s like having a car without any fuel,” Electricity Minister Luis Motta told Reuters, showing where waters at Guri had receded to reveal long-sunken boats, form sand dunes, and even expose roads flooded in the 1960s when the dam was formed.

“It’s difficult to defeat nature.”

A man pushes a wheelbarrow loaded with water containers in a neighbourhood called "The Tank" at the slum of Petare in Caracas, Venezuela, March 17, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins SEARCH "SERVICES TANK" FOR THIS STORY. SEARCH "THE WIDER IMAGE" FOR ALL STORIES

A man pushes a wheelbarrow loaded with water containers in a neighbourhood called “The Tank” at the slum of Petare in Caracas, Venezuela, March 17, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins 

Already unpopular and facing an opposition push to remove him, Maduro has launched an energy-saving campaign and imposed rationing, although he euphemistically calls it a ‘Plan for Load Administration.’ But the government’s main hope is pinned on late rains in the south, forecast for May or June.

Children fill plastic containers with water from a well on a street, close to a neighbourhood called "The Tank" in the slum of Petare in Caracas, Venezuela, March 17, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins SEARCH "SERVICES TANK" FOR THIS STORY. SEARCH "THE WIDER IMAGE" FOR ALL STORIES

Children fill plastic containers with water from a well on a street, close to a neighbourhood called “The Tank” in the slum of Petare in Caracas, Venezuela, March 17, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins 

Critics say the government is using El Niño as a convenient scapegoat to hide incompetent management of the electricity sector: insufficient investment, poor maintenance, corruption, and a failure to diversify away from the Guri which provides two-thirds of Venezuela’s power.

After a 2009-10 drought that also led to electricity rationing and hurt late president Hugo Chavez’s presidency, the government poured investment into thermoelectric projects to try to prevent a repeat.

Stalin Gonzalez, a lawmaker who heads the opposition-run National Assembly’s administration and services committee, said $21 billion had been put into the electricity sector since 2010. “What did they do during all this time?” he asked.

Opposition politicians have lambasted Maduro’s power-saving measures, including giving state workers a two-day week, urging women to reduce the use of hair-dryers, and changing Venezuela’s time-zone so there is half an hour more light in the evenings.

High up in the steep and cramped streets of Caracas’ Petare slums, one of South America’s biggest shanty-towns, residents count the time they last had running water – 1 year and 7 months – and need to go ever further and pay ever more to find it.

Their neighborhood, ironically, is called “The Tank”, after a huge, rusting hulk of a water storage container that towers over shacks: it has been empty for years.

Children snake up the hill with jerry cans filled from a well with precious loads of water. Residents purify water with vinegar, and carefully “recycle” it from kitchen to toilet.

A man walks past an electric pole with overhead power cables in Caracas, Venezuela, April 2, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins SEARCH "SERVICES TANK" FOR THIS STORY. SEARCH "THE WIDER IMAGE" FOR ALL STORIES

A man walks past an electric pole with overhead power cables in Caracas, Venezuela, April 2, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins 

When they have money, families band together to buy a truckload of water, but the price has jumped to 25,000 bolivars – twice the monthly minimum wage – for 7,000 liters.

Maria Rivero, carrying plastic containers used to carry water, poses for a picture in a neighbourhood called "The Tank" at the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world's biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation's 30 million people already reeling from recession, the world's highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins SEARCH "SERVICES TANK" FOR THIS STORY. SEARCH "THE WIDER IMAGE" FOR ALL STORIES

Maria Rivero, carrying plastic containers used to carry water, poses for a picture in a neighbourhood called “The Tank” at the slum of Petare in Caracas, Venezuela, April 3, 2016. Although their nation has one of the world’s biggest hydroelectric dams and vast rivers like the fabled Orinoco, Venezuelans are still suffering water and power cuts most days. The problems with stuttering services have escalated in the last few weeks: yet another headache for the OPEC nation’s 30 million people already reeling from recession, the world’s highest inflation rate, and scarcities of basic goods. President Nicolas Maduro blames a drought, while the opposition blames government incompetence. REUTERS/Carlos Garcia Rawlins 

Some channel rainwater off their roof into buckets via corrugated iron sheets.

“I feel abandoned. It’s humiliating. This is no life,” said community worker Yunny Perez, 46, saying her family now has to make painful choices between spending on water, food or medicines for a disabled child.

“We’re an oil country yet look at the poverty here,” added Perez, who used to be a “Chavista” or fervent supporter of the late president, but is disgusted with Maduro and has just begun supporting the opposition.

So bad is the situation that thieves ambush water trucks to siphon off their load.

Schools close early, malls and hotels have been ordered to rely on their own generators, and plastic water tanks are multiplying across the nation.

Opposition lawmakers say the lack of water is increasing health risks, with scabies on the up for example.

And protests are proliferating.

For a nation used to considering itself a rich kid on the block in Latin America – thanks to its oil wealth – the indignities from failing services are a blow to the national psyche.

As well as having the world’s largest oil reserves, Venezuela has big areas of rainforest, plenty of gold and other metals, and vast water resources. Yet the tourist brochures showing luxuriant scenes of water gushing off Angel Falls or down the Orinoco River now seem like a cruel joke.

Satirical web site El Chiguire Bipolar has been mercilessly parodying the situation. It ran one spoof story on the government submerging an overweight politician in the Guri to raise waters, and joked that now Mars-like conditions make Venezuela ideal training for astronauts.

“The conditions are perfect: no water, only light by day, ferocious heat and precarious food sources,” it scoffed.

Copyright Reuters 2016

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Oil slump devastates Venezuela

Aerial view of Caracas from Plaza Venezuela. Paulino Moran/Flickr/Creative Commons

Jonathan Manthorpe: Venezuela’s grey and featureless President, Nicolas Manduro, the default successor to that preening, strutting rooster Hugo Chavez, is set to become the first head of government felled by tumbling oil prices. Above, aerial view of Caracas from Plaza Venezuela. Paulino Moran/Flickr/Creative Commons

JONATHAN MANTHORPE: International Affairs
March 5, 2016

Nicolás Maduro in 2013, at the memorial for Hugo Chavez. Prensa/Miraflores/Flickr/Creative Commons entrega de la Memoria y Cuenta del año 2012. Prensa / Miraflores

Nicolás Maduro in 2013, at a memorial for Hugo Chavez. Prensa/Miraflores/Flickr/Creative Commons

Venezuela’s grey and featureless President, Nicolas Maduro, the default successor to that preening, strutting rooster Hugo Chavez, is set to become the first head of government felled by tumbling oil prices.

It’s just a matter of who gets their boot lined up first to kick him out the door. The opposition, which since December has controlled 75 per cent of the seats in the National Congress, is working on a recall referendum.

Powerbrokers in Maduro’s United Socialist Party of Venezuela (PSUV) strongly suspect him of betraying the purity of Chavez’ fabulist, operatic “Bolivarian Revolution,” and are lurking behind the drapery with knives drawn.

And then there’s the military, which in Venezeula can always be depended on to launch a coup if the civilians bungle things.

The fate of Maduro, who as Vice-President easily moved up a notch after the death of Chavez in March 2013, is of minor importance in the grand scheme of things. Far more pressing for Venezuela’s 31 million people is that Maduro, and Chavez before him, have brought the country to the brink of economic and social collapse. It may yet tip over the edge into chaos.

Inflation is running at over 180 per cent according to the Central Bank, but the International Monetary Fund says it will hit 720 per cent this year. The economy contracted by over 10 per cent last year and is set to shrink by a further eight per cent this year, according to the IMF.

Basic foodstuffs such as sugar, rice, pasta, milk, cornmeal and flour are often unobtainable, and when stores do have supplies, people have to line up for hours for the chance to buy. It’s the same situation for basic medicines and for the same reason.

Venezuela depends on imports for most of the basics of life, and the bottom has dropped out of the value of the currency, the bolivar.

Maduro has tried to open the door by setting an official rate for necessary imports at 10 bolivars to the United States dollar. For non-essentials the rate is 200 bolivars to the greenback. But in Marxist and mismanaged countries like Venezuela, the blackmarket is always the best measure of the real strength of the currency. The blackmarket rate in Venezuela is over 1,000 bolivars to the US dollar. By this count, Maduro’s much ballyhooed increase on March 1 of the minimum wage to 11,578 bolivars a month is worth less than $US12. That’s less than a quarter of the United Nations’ poverty level.

The immediate cause of this turmoil is the 70 per cent decline in oil prices over the last two years. Venezuela has the world’s largest proven oil reserves and is the tenth largest producer. According to the Organization of Oil Exporting Countries, oil revenues bring in 95 per cent of Venezuela’s hard currency and account for 25 per cent of gross domestic product.

Venezuela has suffered from the “Dutch disease” of excessive reliance on one product since the discovery of oil under Lake Maracaibo during the First World War. This bred both corruption and a cycle of military coups. The cancer reached the bone during the 1973 oil crisis, when wealth flooded into Venezuela in untenable quantities. The whiplash came in the 1980s and 1990s with the collapse of oil prices. There were endless violent street protests and attempted military coups. One, in 1993 was led by army major Hugo Chavez. He had for years been running within the armed forces a secret socialist movement, founded on the supposed ideals of South American revolutionary Simon Bolivar. The coup failed and Chavez was imprisoned, but was pardoned the following year, 1994. Chavez went public with his Bolivarian Revolution political movement and in 1999 won the presidential election.

In power, Chavez swiftly moved to institute a socialist dictatorship. This was widely popular among the country’s poor and indigenous peoples and he was re-elected under the new constitution in 2001. But the authoritarian changes sparked protests among the middle and business classes. Many people were killed during street protests and strikes in 2002 that tried and failed to force Chavez from office.

Chavez was re-elected in 2007 and again in January 2013, shortly before his death from cancer.

Chavez’ presidency was marked by showmanship and flamboyant gestures. He used Venezuela’s oil wealth to make himself the patron of Cuba after the collapse of the Soviet Union when Moscow stopped propping up Fidel Castro’s regime. In 2006, Chavez toured Europe and promised to provide cheap oil to the continent’s poorest communities, drawing peaens of praise and thanks from the mayor of London, Ken Livingstone. He also delivered cheap heating oil to the impoverished of Massachusetts in the winter of 2006. But mostly he hammered constantly at the theme that his administration was under threat from the U.S. government of President George W. Bush, which he claimed was conspiring with Venezuela’s business classes to remove him.

Chavez used the straw man of foreign conspiracy to introduce all kinds of financial controls and nationalizations of industrial and agricultural sectors. These applied in such a way as to try to cripple Venezuela’s business community and to reward the President’s friends, including the military. The result, of course, was to embed corruption and to create a grossly misconceived and dysfunctional economy that could only survive while being fed a daily diet of petrodollars.

It was this genetically discordant animal that Maduro inherited three years ago after Chavez’ death. He has done nothing in the years since to try to put Venezuela on a sounder footing. Indeed, all his actions since matters came to a head with the oil price slump and his PSUV party’s loss of control of the National Assembly in December, suggest he only knows how to sing out of Chavez’ hymn book.

Before the new National Assembly met, Maduro packed the Supreme Court with 13 new judges sympathetic to himself and the PSUV.

So far the court has provided Maduro with some protection against the opposition-dominated National Assembly. Leading opposition figure Henrique Capriles has launched a recall campaign, aimed at getting the three million signatures necessary to force a referendum requiring Maduro to leave office before his current term ends in 2019. The Supreme Court is contesting the timing of the recall referendum, and has also dismissed a bill that would grant amnesties to political prisoners jailed under Maduro and Chavez.

During his State of the Nation Address on January 14, Maduro announced an emergency decree, giving himself extraordinary powers for 60 days to try to address the economic crisis. The National Assembly rejected Maduro’s move, but the Supreme Court backed the president.

But even with these draconian powers, Maduro doesn’t have the will to make the fundamental reforms necessary to set Venezuela on a sustainable economic course.

His fiddling with the official exchange rates to try to encourage the importation of necessary basic foods and drugs will do nothing in the face of the more realistic blackmarket rate.

Raising the price of gasoline by 6000 per cent made a lot of headlines, but it still costs less to fill up a gas tank in Venezuela than anywhere else in the world and the government subsidies for drivers are worth about $US18 billion a year.

There has not been an increase in gasoline prices since 1989, when the rises sparked violent riots. To try to avoid a recurrence, Maduro announced increases in social spending and a rise in the minimum wage from 9,647 bolivars a month to 11,578. As the money is essentially worthless and there’s nothing to buy with it anyway, this is a totally empty gesture.

Another strategy is to produce 19.5 million tonnes of “fair priced” food. But the dependence on bureaucratic management and price controls insure failure of this scheme from the start.

The final move shows where Maduro really fears a backlash. He announced that the military will take over all aspects of the country’s energy and mining businesses, including transport, construction, imports and exports. The new Military Company for the Oil, Mining and Gas Industries has been given a 50-year lease to, in essence, run the economy.

This massive bribe may not be enough to save Maduro from the military, on whose support he has depended increasingly as his stock withers within his PSUV and the opposition manoeuvres to oust him. There is a significant faction within the armed forces that believes Maduro must go, and by a coup if necessary. After all, these officers argue, it is the military that will have to deal with the unrest that is likely to spring from the President’s economic and administrative incompetence.

However, while the most influential figures, such as Defence Minister Vladimir Padrino Lopez, want Maduro out, they want his removal to be managed in a constitutional and dignified manner. They would rather avoid a classic military coup.

The most likely outcome for Maduro is that within days or weeks he will bow to insurmountable calls for his resignation from the military and his PSUV party. That would require the swift calling of new elections, with the prospect of an opposition leader becoming President.

By any measure, that will not be a victory to be envied.

Copyright Jonathan Manthorpe 2016

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Jonathan Manthorpe is the author of “Forbidden Nation: A History of Taiwan.”

Contact: jonathan.manthorpe@gmail.com. Please address queries about syndication/republishing this column to jonathan.manthorpe@gmail.com

 

 

Manthorpe B&WJonathan Manthorpe is a founding columnist with Facts and Opinions and is the author of the journal’s International Affairs column. Manthorpe has been a foreign correspondent and international affairs columnist for nearly 40 years. Manthorpe’s  nomadic career began in the late 1970s as European Bureau Chief for The Toronto Star, the job that took Ernest Hemingway to Europe in the 1920s. In the mid-1980s Manthorpe became European Correspondent for Southam News. In the following years Manthorpe was sent by Southam News, the internal news agency for Canada’s largest group of metropolitan daily newspapers, to be the correspondent in Africa and then Asia. Between postings Manthorpe spent a few years based in Ottawa focusing on intelligence and military affairs, and the United Nations. Since 1998 Manthorpe has been based in Vancouver, but has travelled frequently on assignment to Asia, Europe and Latin America.

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