The time separating this summary from the previous one dated 5 June is explained by travel and by a stint as interim Commissioner of CICIG, the acronym in Spanish of the UN sponsored International Commission against Impunity in Guatemala. Having returned to Venezuela three weeks ago, I will attempt to give a birds eye account of the salient events of the last five and a half months and, particularly, of the past few days as the country now moves into the last two weeks leading to the 8 December local elections for all 335 mayors and municipal councils of the nation, including the Metropolitan Mayor of Caracas.
Usually hobbled by a high rate of abstention - but apparently not this time, as over 80% of those questioned intend to vote – these elections have nevertheless been labeled a plebiscite by the democratic opposition, betting that even if the regime – now more a coalition of voracious power cliques than a government - stands to win a majority of small towns, most large towns would in all likelihood vote for the opposition candidates, thus tilting a majority of the national popular vote in favor of the democratic opposition, vindicating Capriles´s and the opposition´s assertion that the 14 April presidential election was fraudulent.
However, the approval last Tuesday 18 November of a one year Enabling Law (“Ley Habilitante”) transferring practically the entire legislative function from the National Assembly to the President, supposedly with the aim of fighting corruption , a phenomenon rampant in its own ranks and a task for which the regime has all the tools it needs, has again raised the fear that its real purpose is to use this self-inflicted crisis for the big, final revolutionary push imposing a centrally planned economy and the cancellation of most civil and political rights. Chávez benefitted from four Enabling Laws, mainly used to gradually and unconstitutionally impose the totalitarian project and persecute political opponents.
The extraordinary celebrations after the approval of the law could be signaling precisely that. Also telling is that the regime slipped into the text of the law published in the Official Gazette a little phrase which had not been presented, even less discussed in the Assembly. It says that the President is also enabled to “dictate norms sanctioning actions attempting against the security and defense of the nation, state institutions, the branches of the State, and the delivery of public services indispensable for development and the quality of life of the people”.
For good measure, Maduro stated at the celebration that “they (the parasitic bourgeoisie) have underestimated me, but what they have seen is small when compared with what we are going to do”, adding that 2014 will see the establishment of a “new internal economic order”, that production costs will be calculated with precision and that margins will be limited to between 15 and 30%, depending on the activity, for all goods imported or produced locally with components imported with “dollars of the Republic”. As he had the Enabling Law for a full year, he said, corrections would be made, if necessary.
Ironically, the regime had “acquired” the two/thirds majority it needed for the approval of the law with an act of corruption after impeaching deputy Maria Aranguren of Monagas with the solicitous help of the Supreme Tribunal of Justice, on fabricated charges of corruption, and then swearing in her substitute, also a member of her political party, but who obviously was more amenable to arrive at an understanding with the regime. The regime was unable to buy even one of the opposition deputies. Celebrating the approval of the Enabling Law in a speech at the entrance of Miraflores Palace, Maduro announced a “frightful, terrifying offensive against corruption as of January, wherever it may be found”. Standing next to him, not one muscle moved on Cabello´s face as he looked into a void.
Since the contested presidential election of 14 April the reader will recall that Capriles cancelled, for security reasons, he said, the 17 April march to the CNE headquarters in the center of Caracas, and that the Supreme Tribunal of Justice dismissed on 7 Augustthe two requests for a ruling on the validity of the election submitted by the opposition (one by Capriles and one by the Mesa de la Unidad Democratica) arguing that the requests contained “concepts offensive and disrespectful to this Chamber and other organs of the State”. It then proceeded to punish Capriles by fining him.
It also appeared rather clearly that the regime had only engaged in a dialogue with the Catholic Episcopal Conference and the Apostolic Nuntio in order to secure a photo opportunity with Pope Francis, very soon before putting an end to the meetings and closing the process without any real concession regarding the political prisoners, the only request formulated by the Church. In October, after the statutory one year period for prior notice lapsed, Venezuela ceased being a member of the American Convention of Human Rights, a fact that was not mentioned by any member of the UN Council on Human Rights in its general debate, nor of the OAS. The pathetic Mr. Insulza also said that the April elections of Venezuela were not a subject for discussion in the OAS. Since then the Pope also received Capriles, on 6 November. Finally, Maduro has declared that 8 December, the election day, would from now on be observed as the “Day of loyalty and love for Chávez”, which will almost certainly be celebrated by his followers by noisily intimidating all those waiting in line to vote.
As will also be recalled, neither UNASUR nor the OAS have even deliberated on the merit of putting the situation of Venezuela on their agendas, even less the l4 April election as, sadly, not one of its member states, Latin or North American, not one, has mustered the courage to initiate such a process. This has obviously emboldened the regime to push forward with its totalitarian blueprint (much facilitated by its purchase of Globovisión and of the very large Capriles newspaper chain (no kin of Henrique Capriles) through middlemen, and the harassment of the large, still independent dailies El Nacional and El Universal, and of the smaller El Nuevo Pais. Most media now subject themselves to self-censorship.
These developments appear to have had – understandably, to a point – a devastating effect on the morale of the political leadership of the opposition, a good part of which seems to have been frozen into silence. The notable exceptions are Capriles, López, and Machado, now called “the trilogy of evil” by the regime, and portrayed with perverted faces on large posters in the center of Caracas. Television stations are not allowed to transmit any live statement by them, now only possible through regional channels, mainly CNN en español and Colombia based NTN 24. In addition the regime grounds any plane Capriles may choose to use as head of the opposition electoral campaign, and yesterday his logistics manager, Alejandro Silva, was “disappeared” for 16 hours by military intelligence.
The news is equally grim or worse on the economic and financial front. Monetary liquidity started growing in the third quarter of 2011 and increased by 50% (representing also 50% of GDP) in 2012, a presidential election year, and is calculated to top 70% this year, in both years for purely for electoral reasons. As the Central Bank now directly finances in Bolivares all state enterprises, including PDVSA, the State oil giant, a significant amount of money without backing enters the economy, further fueling inflation and pressure on imports, as domestic production continues to fall as a consequence of the regime´s failed policies.
On 17 October operative (liquid) reserves held by the Central Bank stood at US $ 1 billion, one week of imports, according to Central Bank figures cited by respected economist Pedro Palma, explaining rumors of sales of significant amounts of Central Bank gold through the London office of Goldman Sachs. Inflation since 1 January has reportedly already surpassed 50%, and scarcity of food, mainly milk, cooking oil, coffee, sugar, and corn flour, and of basic consumer goods, such as toothpaste and toilet paper, now appear to have become a permanent feature for the foreseeable future. No wonder that the exchange rate of the Bolivar on the free market has soared from 12.70 to the Dollar in October 2012, to 55-60 this past week.
The regime´s talent for destruction has two good examples in the cases of steel and cement. SIDOR, which in April 2008 when it was nationalized by Chávez produced 4.3 million tons of steel, today produces 1.6 million tons a year, and the Pertigalete cement plant, Venezuela´s largest, formerly owned by CEMEX and nationalized in November 2011, is practically closed as it has run out of paper for its sacks and the cement in its silos has hardened.
“Cadivismo”, a particular form of “arbitrage” conducted by cliques close to the regime and from which they have benefitted enormously, making billions for themselves and their Godfathers, has been calculated at about US$ 20 billion by Edmée Betancourt, the former President of the Central Bank fired by Maduro in August for revealing the above amount. Others, less sophisticated but more powerful, have been linked to the unobstructed, almost quite official “export” of 31 cocaine-filled suitcases (1.3 tonnes) on an Air France flight to Paris on 11 September. It all seems to have been the work of small time, petty criminals, including local Air France staff and three low-ranking National Guards, at least according to the Prosecutor General.
Its falling numbers in the polls and the very real threat of a social upheaval appears to have led the regime, on 8 November, to force the large appliance chain DAKA, almost using it as a pilot project, to sell its goods at a price calculated at the official exchange rate of 6.30 and imposing discounts of as much as 70% (“Empty all the shelves!”, Maduro cried on national radio and television, in spite of Consumer Protection Superintendent Samán declaring that DAKA had for already some time not received a currency allocation at that rate), which led to large crowds gathering at their many premises and at other stores, and to looting, mainly in Valencia, but also in Puerto La Cruz, Ciudad Ojeda, Ciudad Bolívar and San Cristóbal.
The system was then extended to other chains and stores of medium priced consumer and capital goods, all under the watchful eye and helping hand of the National Guard, thus inaugurating a new modality of job destruction and further increasing the number of Venezuelans dependent on the State for their own livelihood and that of their families. The regime has also started to check stocks and prices in much smaller stores, thereby eliciting a wave of voluntary discounts as many if not most of them had also jacked-up prices quite steeply. Lambasting business without distinction, not only the large chains selling appliances, the “parasitic bourgeoisie” was extended to include the small neighborhood stores selling food, hardware, shoes and clothing. Maduro corrected that last week, explaining that only the large chains of the super-rich deserved the distinction of being called parasitic, but soon they also will have to renew their stock at much higher prices.
As stocks start to run low at the large, low cost distribution chains like EPA (hardware) and TRAKI (clothing), the regime has now called on consumers to become “price controllers” in malls, setting up modules at which complaints lodged are followed up aggressively by regime functionaries. Although a new poll reflecting last weeks´ developments has not yet been published, up to now the regime´s numbers for the 8 December elections have almost certainly improved. The question now is if stocks will last through the election or run out before it is held.
IVAD, a respected polling organization which has now published its latest opinion survey carried out between 2 and 11 November, only three days after “Operation DAKA”, not enough to gage its impact (click on http://www.scribd.com/lapatilla for the full version in Spanish), registers that in January of this year fully 56.7% of those questioned credited Maduro with a “positive performance”, against 34.4% who called it “negative”. This view has almost been reversed in this latest survey, to 53.1% “negative” against 44.7% positive this month of November, a 12% drop on paper, probably more if one considers the fear factor. 50% thought the “general situation” to be positive in January, 68.5% consider it to be negative now, 61.8% considered the economic situation to be negative in June, 70.7% does so now, and fully 67,6% consider the political situation to be unstable now while only 25.2% consider it to be stable. In addition, 49% blame The Government/The President for scarcity (12% blame the private sector), 59% blame the Government/The President for inflation (18% the private sector), 56% blame the Government/The President for insecurity (11% “the people”), and 57% blame the Government/The President for corruption (8% the opposition).
Furthermore, 62% agree with the assertion “We Venezuelans are becoming poorer”, 58% disagree with the assertion “The government is successfully tackling the economic war, basic foodstuffs are becoming available and prices have been regulated”, and 48% agree that “The Enabling Law will not solve problems but only give Maduro more power to persecute the opposition and continue the confrontation”. 46% “have confidence that President Maduro and his government have the capacity to solve the economic and social crisis”, while 50.9% disagree.
The successful operation of forcing prices down at gunpoint and throwing owners and managers into prison, with or without reason, has not only met with support. In Valencia more than one looter was stopped and saw his TV smashed to the floor. Also, Operation “Empty the shelves” is not looking like a purely electoral move either however, but more as part of a well thought-out strategy to hold on to power at any price and accelerate and deepen the Marxist-Leninist blueprint. A telling move in this regard is the establishment of two new State structures empowered to manage foreign trade and the allocation of convertible currency with the aim of, according to Maduro, of “fighting the so-called cadivismo (corruption in the allocation of foreign currency by cliques close to the regime) and protecting the foreign exchange of the Venezuelan people”.
The two new institutions are the National Center for Foreign Trade, destined to establish the priority sectors for the allocation of foreign currency and overseeing the different state agencies managing the process (CADIVI, SICAD, BancoEx and the State Banks). The second one is the National Corporation for Foreign Trade, a more operative structure designed to centralize imports for state enterprises, but also to control margins and prices of goods imported by the private sector. All of this looks very much like a disguised partial nationalization of foreign trade and a further step in the establishment of a centrally planned economy. The regime has reason to believe that it has succeeded in affirming its control by re-imposing fear and deepening social and political polarization, but for how long? Importers are feverishly cancelling orders and trying to unload their containers in Panama, Colombia and Curacao, and very soon acute scarcity of almost everything could accelerate this already deep crisis.
The regime is very nervous, and for good reason. The bill for 14 years of mismanagement and waste, wrong policies and disinvestment, corruption and destruction accumulated with such perseverance by Hugo Chavez has landed on the table of his feuding successors, but none of them dares to abandon the “Chávez Legacy”. The very sharp fall in living standards since January has seriously affected all social classes, changing the perception of a majority of Venezuelans as to who is to blame. True, Maduro does not enjoy Chávez´s Teflon coating, but even Chávez would not have been immune to the present, disastrous economic conditions.
On the other side, this immensely rich country could be turned around quite quickly, given the right policies. Given also the social safety nets already in place, it could be probably be done at a bearable social cost, but for such a turnaround to last it would certainly require vast amounts of private investment and abandoning the revolution and its dogmatic, bureaucratic and destructive obsession for total control. That is not likely to happen, as the regime has been the hostage of its dogmatism and of its system of complicity for already a long time. Yes, you cannot exclude the emergence of a Gorbachov.
The question now is if the regime will allow the foreseeable victory of opposition candidates in the majority of large towns to stand – maybe even use it to initiate a policy change towards rational economic management – or continue to use its overpowering control of the CNE to change some of the 8 December electoral results in its favor. In its arrogance it could very well feel emboldened to commit such a tragic miscalculation, particularly since it fully controls the CNE, which since 2005 has forbidden any international organization (except UNASUR) from observing any election in Venezuela.
As the hemispheric community of democratic nations has effectively been deactivated by the regime´s successful “international cooperation”, it seems clear that preventive diplomacy and the regional security and human rights systems are no longer an option. The democratic opposition of Venezuela has been left to fend by itself, and one idea it is exploring is to organize a referendum to convene a Constituent Assembly limited to the renewal of all state branches, starting with the National Assembly. If it succeeds in this endeavor, certainly a complex and probably long process, a slow but peaceful transition back to the Constitution might be possible, but only if such a process enjoys the committed support of most Latin American democracies. Will they have the courage to throw their support behind it? With its Enabling Law the regime is likely to impose its totalitarian blueprint much earlier. Democracies are often pusillanimous little creatures, and most Heads of State and Government of this hemisphere are certainly no longer made in the mold of a Betancourt, a Cardozo, or a Lagos, but one must hope that they would rise to the occasion.