Venezuela: The only paradise where you don’t want to be

Posted in Other | 01-Sep-15 | Source: Globalo News

After 14 years under the mandate of Hugo Chavez and the most impressive oil bonanza in history, Venezuela is now reaping the consequences of very bad decisions and unprecedented corruption. Nicolás Maduro who took power in 2013 after some shady elections has established himself as Chavez’s heir.

Let’s start by explaining Venezuela’s political situation.

The government has control of all public institutions, including the Central Bank and the Judicial Power. In Venezuela, Government and State are the same and have been run by the same people for the last 16 years

Maduro has enforced a policy of oppression against opposition leaders and any other dissidents that may appear. Last year the opposition leader Leopoldo Lopez was imprisoned and remains behind bars without any signs of a legitimate trial. The deputy, Maria Corina Machado, another key player of the opposition, was suspended from the National Assembly in 2014 and is now banned from running for any political position for the next 12 months. This is very convenient, given that she was running for the December parliamentary elections. Only weeks after Leopoldo’s imprisonment the government went after other strategic figures: the opposition governor Daniel Ceballos, the mayor Enzo Scarano, the mayor of the Metropolitan District Antonio Ledezma (who is now under house arrest). Hundreds more people are currently political prisoners.

One of the few opposition figures remaining free is Henrique Capriles, although in 2004 he was imprisoned for 4 months. In recent months he has not been very disruptive and hasn’t made any strong calls to action since he lost the elections to Maduro in 2013. Capriles is the current governor of Miranda, one of the most important and most populated states of Venezuela. He believes that the people working from the bottom up will eventually make the regime fall.

Another important political actor is the opposition coalition called Mesa de la Unidad Democrática (MUD). They are attempting to unite different parties, visions and strategies into one unified block which will be able to confront the regime – thus far with little success. Their biggest achievement to date has been to submit all the opposition candidates for the parliamentary elections under one electoral ballot with the label MUD in order to increase clarity for voters. It seems unlikely they will have any major impact.

Venezuela’s economic situation is more comparable to a soap opera than to a normal economy – full of drama, bad decisions, and treason.

The economy is suffering from 12 years of foreign currency controls, huge over spending and corruption. More than 50% of surplus coming from the oil bonanza went to the so called “National Fund for Development” which really was a front for the money going directly to private bank accounts in Switzerland. According to the economist Francisco Faraco it is estimated that the capital flight of the last 12 years has reached 250 billion USD. To put this into perspective, this is the entire GDP of a country like Peru!

These actions have dragged Venezuela into a vicious spiral of hyperinflation, scarcity, long queues to buy basic goods, as well as absence of medicines or treatment for diseases like cancer or diabetes. More than 1,500 private enterprises were closed or expropriated by the government, including food and medical industries and many others considered “strategic” for the socialist revolution.

In July, Henrique Capriles proposed a plan to overcome the crisis. The plan seems more like a band aid instead of the much needed operation. Capriles proposed a seven step plan that included the increase of minimum wage by 50%, a fund for school supplies, the approval of dollars for productive industries, return of expropriated companies to the original owners and review of oil agreements, oil debt and conditions of the external debt. Capriles’ proposal is proof of how distant the opposition is to the people’s problems. It is populist in nature and does not offer any solutions to address the root of the issues.

With the amount of problems Venezuela is facing it can be a difficult task to prioritize, but I personally agree with most of the analysts and their priorities:  Focus on the dismantling of currency controls, corruption, and introducing institutional order by separating powers.

This “Bolivarian Socialist Revolution” game is about to end soon, but for now the winning team is clearly the government. They are taking advantage of the last minutes in the power-struggle game and are looking to score a last goal before the opposition team make a move, or people jump into the field and take control of the game.

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