Venezuela politics

The Obama Administration’s new approach to Cuba has jolted Western Hemisphere leaders preparing for next week’s Summit of the Americas in Panama. According to senior host nation officials, the Summit will be historic as the first time since the Eisenhower Administration that all hemispheric leaders will meet together at the same time. Coupled with a recovering US economy regaining attractiveness to regional partners, the Summit offers a tailor-made opportunity to find new ways to cooperate on energy, agriculture, technology and innovation.

Unfortunately, this scenario is at risk of being undermined needlessly by hemispheric reaction to the Obama Administration’s sanctions on seven Venezuelan officials and the declaration that Venezuela is an “unusual and extraordinary threat” to the US. Read more

How isolated is Venezuela’s government from the people it supposedly represents? Very isolated indeed, according to a study commissioned by beyondbrics from Marco Ruediger and colleages at FGV DAPP, the department of public policy analysis at the Fundação Getulio Vergas in Rio de Janeiro.

The study, derived from activity on Twitter, demonstrates the extreme polarisation of opinion in the country and suggests that Venezuela’s media, often either controlled or suppressed by the government, is increasingly lining up with opposition voices.

Source: FGV DAPP

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The intricacies of Venezuela’s bizarre economic policy apparatus long ago became a subject approached with confidence only by seasoned specialists. Undaunted, Caracas this month decided to make an already byzantine currency system even more complicated by introducing another official exchange rate to the two (plus the black market version) that already exist.

The move came after pressure from falling oil prices, which have hammered Venezuela’s exports and reduced its dollar earnings. Other countries with similar problems in recent years such as Iran (and to some extent, Argentina) have also taken the route of multiple exchange rates. Read more

“You want milk? Low fat? Skimmed?” asked a man who identified himself only as Juan. “I can get you milk, but it is going to cost you!”

My arrival for a three month reporting stint in Caracas has schooled me in some simple rules of life in the Venezuelan capital. One is that supermarkets almost never have milk, so if people want something to add to their coffee they need to find the telephone number of someone like Juan, a fixer.

The next rule is that once they’ve heard the price, they’ll prefer black coffee. Juan was charging 150 bolivares a litre ($24 at the official rate of 6.3 per US dollar). That is roughly ten times the cost of pasteurised milk at the regulated price in state-run supermarkets. Read more

By Russ Dallen, Caracas Capital Markets

Trying to predict what will happen in South America’s wildest emerging markets in 2015 has the degree of difficulty of trying to compute pi to the 100th digit in your head.

With Venezuela, in particular, the range of options of what could happen next year is almost as infinite – ranging from more of the same and muddling through, to default, violence, coup, civil war and international brigades. On the economic front, whether Venezuela survives 2015 will depend almost purely on the price of oil, however. Read more

One could talk about Venezuela’s economic policy in Shakespearean terms. To devalue or not to devalue; to converge foreign exchange rates or not to converge; to raise the price of the world’s cheapest gasoline or not to raise; to sell Citgo or not to sell; to default or not to do so – these are the questions.

The distortions created by the government’s foreign exchange and price controls – covering even Barbie dolls – keep playing a treacherous role in Venezuela’s unfolding tragedy. Why is this happening instead of not happening? To some analysts, that is the question. Read more

With Venezuela’s economy in tatters, corruption allegations abounding and political infighting the name of the game, it may be time for changes at the top.

A fortnight ahead of the ruling socialist party’s third congress at the end of July, President Nicolás Maduro (pictured) is expected to make the first announcements of a government restructuring this week. What’s at stake in the country with the world’s largest oil reserves, but where shoppers struggle to find basics such as toilet paper and powdered milk? Read more

More tragic news from the frontline of Venezuela’s crime scene: the murder in front of their five year-old daughter of Mónica Spear, a former beauty queen and soap opera star, and her British-born ex-husband at the hands of a gang of armed robbers this week.

It is doubtful that the assailants had much on their mind beyond armed robbery – which they knew could end in murder, an outcome not unusual in a Venezuela ravaged by violence. In that sense, the deaths are just more statistics in a country with one of highest murder rates in the world, up there with Honduras, El Salvador, Ivory Coast and Jamaica. Read more

Amid rampant inflation, widespread shortages, a yawning fiscal deficit, a tightening grip on the private sector and dwindling foreign cash reserves, many are worried about Venezuela’s economy.

That includes Standard & Poor’s, which on Friday cut the rating of the oil-rich country one notch, to B- from B, with a negative outlook. Read more

By Felipe Pérez Martí

In a recent article published in The Guardian, American economist Mark Weisbrot argues that concerns expressed by economists about the condition of the Venezuelan economy are unfounded. He claims that the Venezuelan economy is not headed for collapse, and describes those who say this is so as “Venezuela haters” allied to the opposition.

I served under President Hugo Chávez as Minister of Planning and Head of the Economics Cabinet between 2002 and 2003. I deeply believe in the ideals of the Bolivarian Revolution of creating a just, egalitarian and democratic society in Venezuela, and in Chávez’s commitment to turn these ideals into reality. Read more

Nicolás Maduro, the Venezuelan president, has pledged to continue his “economic offensive” against private business after the victory of his ruling PSUV in Sunday’s local elections strengthened his hand.

But despite his rhetoric, analysts said the result could give him enough political muscle to undertake less populist measures such as a devaluation.

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President Nicolás Maduro is a fraud, his government is incompetent and corrupt, most ministers should be sacked, the ruling Socialist Party’s ideological discourse is sterile, the national “Bolivarian” project is on a suicide path, and there is a growing risk of a coup from within the administration.

But don’t believe the FT on any of this. These are the words of Heinz Dieterich, a Marxist professor and former mentor of Hugo Chávez, writing in the leftist website Aporrea. Having cleared our throats before Sunday’s municipal elections, what actually is at stake at the vote — in concrete terms? Read more

As beyondbrics was landing on Monday evening, Venezuela’s capital gave it a warm welcome: a massive blackout. A big chunk of the country was without power, including much of Caracas.

Roving the streets of one of the world’s most dangerous cities in complete darkness was quite an experience – even for your correspondent’s seasoned driver, desperately calling family and friends to check if they were doing fine. Read more

First, he came for the toilet paper factory. Then, late on Friday, Venezuela’s President Nicolás Maduro seized a national chain of electronic stores as part of his battle against galloping inflation and rampant shortages he blames on an “economic war” coming from right-wing contrarians.

Maduro sent soldiers to “occupy” Daka, (similar to Best Buy in the US), accusing them of unjustified price hikes and said it will force them to sell everything at “fair prices”. Read more

Christmas comes round pretty quickly each year – too quickly for some, given the proliferation of Xmas ads on TV. But not soon enough, it seems, for Venezuela’s President, Nicolás Maduro. Forget the calendar: over the weekend he wished his followers a “merry early Christmas”, flicking on the lights at the presidential palace and saluting the Three Wise Men.

His decision of advancing Christmas by decree means that workers will receive the first two-thirds of their bonuses and pensions next week, with the remaining in early December, and that the supply of some 50m toys will be guaranteed in a country that is battling shortages. Read more

What to do if you are a president struggling with massive shortages and galloping inflation? You create a Deputy Ministry of Supreme Social Happiness, to try keep people, well, happy.

That is what Venezuela’s President Maduro announced late last week, stating that the ministry co-ordinate all the poverty alleviation programmes installed by his mentor and predecessor Hugo Chávez. Leaving aside the self-declared good intentions, some commentators smell political motives ahead of municipal polls in December already perceived as a plebiscite on Maduro’s rule. Read more

Even the IndyCar Series now appears to have been hit by Venezuela’s currency jousts, another example of the country’s citizens desperately trying to skirt around the country’s tight foreign exchange controls.

On Friday, officials froze the hard currency allowance to automobile and motorcycle racers who compete overseas while they are being investigated over activities that might be “fictitious or overpriced”. Read more

For a country where consumers are often hard-pressed to find staples like milk or toilet paper, Venezuela certainly has no shortage of scandals. After last month’s accusations of electoral fraud and a saloon-style brawl in congress, now Mario Silva, a TV talk show host, rabble-rouser and the best journalist in Venezuela – according to the late president, Hugo Chávez – has fallen into the fray.

In an extraordinary hour-long recording of what opposition politicians say is a conversation between Silva and a top Cuban intelligence official, the chavista broadcaster delivers a laundry list of backbiting and corruption at the highest levels of chavismo. Venezuelans are wondering what will come next. Read more

Perhaps the most revealing feature of the wikileaks publication of US diplomatic cables a few years ago is that it showed that what Washington said in public to other governments is also what is said to them in private.

By contrast, many other governments, especially in the Gulf but also in Latin America, were often revealed as two-faced hypocrites that praised each other publicly in elaborate shows of regional unity while privately stabbing each other in the back. That remains as true as ever today when it comes to Venezuela’s contested presidential election, which Nicolás Maduro, heir of Hugo Chávez, won by a whisker. Read more

John Kerry, US secretary of state, on Wednesday backed the Venezuelan opposition’s call for a recount of the vote after disputed presidential elections on Sunday, despite plans for the inauguration on Friday of Nicolás Maduro.

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