Tuesday, May 22, 2018

Venezuela's latest election and regime change threats

"Venezuela is Latin America's biggest exporter of crude oil and has the world's largest petroleum reserves." - Brian Ellsworth and Andrew Cawthorne, Venezuela death toll rises to 13 as protests flare Reuters 02/24/2014

"Venezuela claims the world’s largest proven reserves of petroleum, an estimated 298 billion barrels of oil." - Michael Klare, The Desperate Plight of Petro-States TomDispatch 05/26/2016

I try to open all my posts on Venezuela with those quotations. Because that has been and is the most important driving force in US policy toward Venezuela.

It's easy to slip into a cynical "it's all about the oil" attitude that can become an excuse for not thinking about the various other factors involved. US policy toward Venezuela is also a part of the larger US strategic approach to Latin America.

This 2015 article from the Army Strategic Studies Institute (SSI), The Approaching Implosion of Venezuela and Strategic Implications for the United States by R. Evan Ellis 07/10/2015, characterized the Venezuelan situation at that time this way:
The current regime in Venezuela is locked in an economic and political death spiral from which multiple reinforcing dynamics make it difficult to escape calamity. During 16 years of “Bolivarian socialism,” anti-business policies including expropriations, price and currency controls, government corruption, and skyrocketing crime have destroyed virtually all productive activity in the country outside the oil sector. In agriculture, where producers battle government-encouraged land invasions and outright expropriations, difficulties in obtaining foreign currency to purchase supplies, and demands from government purchasing agents for kickbacks that must be paid in scarce dollars, production has collapsed, and the agriculturally rich, tropical country must now import almost three-fourths of the food that it requires to feed its people, with the result that, as the government’s foreign currency runs out, Venezuela’s poor find it even harder to eat.

This is precisely what is happening as declining oil production and increasing costs drive the government’s principal vehicle for earning foreign currency to zero from both ends. Although oil production has long been the principal driver of the Venezuelan economy, so much of the earnings of the national oil company PdVSA have been diverted into short-term welfare programs (the “misiones”) and programs to buy influence in the region such as the Bolivian Alliance of the Americas (ALBA) and Petrocaribe that the nation has neglected to maintain existing production infrastructure or invest to bring new capabilities on line to economically extract and process petroleum, such as the heavy oil found in the Orinoco tar sands.

I think the US pressure for regime change in Venezuela is a bad idea. Our regime-change efforts in the last half-century and more have produced far more harm than good, including damage to the interests of the United States itself. The US record in Latin America in ousting governments the American government and business lobbies find inconvenient or undesirable has been a terrible one for pretty much the entire history of the US. I don't have any apologies for taking a cautious view of regime-change advocacy and the propaganda claims that go along with them. Especially when we're talking about regime change in Latin America.

I'm more familiar with the politics of Argentina than with that of other Latin American countries. But I have tried to follow major developments in Venezuela. And I'm keenly aware that reporting on Venezuela from major outlets in the US has often been sloppy. And since both the Obama and Trump Administrations have leaned heavily toward regime change in Venezuela, the latter seemingly even more so than the former, anyone not indifferent to the problems that reckless operations in pursuit of that goal can cause will be well-advised to be cautious about alarmist reports about Venezuela. And especially claims by American regime-change advocates that they are deeply concerned about freedom and democracy and the well-being of ordinary Venezuelans.

Being opposed to Trump regime-change efforts in Venezuela does not in itself imply endorsement of current political practices by Nicolás Maduro's government or ignoring their current economic problems. Evan Ellis' comment quoted above is obviously not one sympathetic to the Maduro government. But it's description of very tough economic conditions there would still be consistent with developments since 2015. Venezuela is a petrostate, very heavily dependent on oil, and the difficulties with agricultural production to which Ellis alludes is one of the downsides of that dependence. (The oil industry attracts a lot of workers from rural areas who choose that route instead of farming.)

Greg Wilpert updates the picture for this month (Venezuela’s Highly Unusual Presidential Election Venezuelanalysis.com 05/19/2018):
... following president Chávez’s death [in 2013], Venezuela’s economic situation began to deteriorate significantly. The inflation rate rose from 21 per cent in 2012 to over 100 per cent in 2015 (and turned into hyper-inflation in 2018), basic consumer items and of food staples became increasingly difficult to purchase because of shortages, oil revenues dropped by two-thirds, from an estimated $77 billion in 2012 to $25 billion in 2016 – all of which gave the opposition additional reasons to launch ever-more uncompromising attacks on the government.

The reasons for the economic crisis are manifold, but its heart can be found in the confluence of: a fixed exchange rate, a concerted business sector effort to undermine the economy, declining oil prices, and – beginning in 2017 – US financial sanctions, all of which combined to create one of the worst economic crises in Venezuelan history.
El Espectador (Colombia) reports in Cinco claves para entender lo que está pasando en Venezuela tras las elecciones 21.05.2018:

Venezuela está sumida en una severa crisis con escasez de todo tipo de bienes básicos y una infraestructura de servicios colapsada.

El PIB se contrajo 45% desde 2013, la inflación cerraría este año en 13.800% -según el FMI- y la deuda externa asciende a 150.000 millones de dólares (con 10.000 millones en reservas).

Todo ello con un agravante, la producción de crudo, que aporta 96% de los ingresos, cayó a su peor nivel en tres décadas (1,5 millones de barriles diarios), por lo que el país no disfruta del repunte del precio del petróleo.

Las sanciones estadounidenses dificultan el acceso a financiamiento externo y complican las importaciones.

[Venezuela is immersed in a severe crisis with a shortage of all kinds of basic goods and a collapsing service infrastructure.

The GDP has contracted 45% since 2013, inflation this year will wind up being 13,800% - according to the IMF - and the external debt is rising to $150 billion (with $10 billion in reserves).

All of that with an aggravating circumstance that the production of crude oil, which constitutes 96% of income, fell to its worst level in three decades (1.5 million barrels daily), for which the country is not enjoying an upturn in the price of oil.

The American sanctions make the access to external financing more difficult and are complicating exports.]
The same report summarizes the status of the election results from Sunday with around 98% of the votes counted. The Trump Administration has labelled the results a sham. But it's not so clear-cut as that.

El Espectador reports that Maduro received 67% of the votes. Given that much of the opposition was boycotting the election, a 67% vote for the governing party is certainly a lopsided vote. But that also means that a third of the votes did not go to other parties. Participation was 46%, which is low for Venezuela.

But there were competing candidates. Henri Falcón won the second-highest vote for the Presidency with something like 21%. "The main opposition candidate, Henri Falcón, rejected the result soon after the polls closed and called for new elections." (Venezuela election: Maduro wins second term amid claims of vote rigging BBC News 05/21/2018)

Boycotting elections isn't a familiar tactic in the US or most other developed democracies. But it can be used effectively in particular situation if there is a widespread perception among the electorate that the electoral process has genuinely been rigged. The experience of Argentina's Radical Party (UCR) in the 1930s and 1940s provides some experience of how it can be an effective protest, but also of how the tactic can misfire. Even if the election is rigged, running an active campaign can have big advantages, like keeping the party structures active, keeping voters and activists engaged, and using the campaign as a way to promote the party's positions and criticisms.

The claim that the Venezuelan voting was rigged is far from clear. The Venezuelan electoral system under the chavista regimes had a strong reputation for clean elections. In this case, the US and its allies were condemning the vote ahead of time, so they now have a stake in arguing that the election was fixed.

But claiming that the elections were invalid is largely a tautology for the Trump Administration and its allies on the issue. Because the Venezuelan government re-established itself last year, i.e., rejected the previous constitution and elected a Constituent Assembly to establish a new one, a process that is still continuing. The Trump Administration's position has been that the whole new governmental structured was illegitimately set up. And so elections held under it are illegitimate. "Even before the election took place, the US, Canada, the EU and a dozen Latin American countries said they would not recognise the results." (Venezuela election: Maduro expels top US diplomat BBC News 05/22/2018)

Whatever the merits of that argument in international law may be - and it's not at all clear to me that it's a sound argument in that context - it's also entirely plausible that a legitimate election could be held under the current governmental structure. (Elizabeth Melimopoulos explained the concept in Venezuela: What is a National Constituent Assembly? Al Jazeera 07/31/2017) This is a very capsule summary. The transformation of the government through the Constituent Assembly is still under way. The Constituent Assembly superseded the Parliament. But the Parliament is still sitting under control of the opposition in it. (Asamblea Nacional califica de "usurpador" a Nicolás Maduro 22.05.2018) So a type of "dual power," might be said to exist, though more symbolic than real.

Opposition figures called for a boycott of the Constituent Assembly vote last year, too. But anyone not looking for a regime change operation in Venezuela may not find it convincing for the opposition to boycott elections and then use a lopsided vote for the government party or low electoral turnout as evidence of a fixed election.

There are legitimate questions about the extent to which the government may have restricted political activity and press freedom prior to Sunday's vote. (Sandra Weiss, Wie Maduro seine Wiederwahl in Venezuela sicherstellt Standard 18.05.2018) But that's a radically different thing than saying those claims can legitimately justify a coup or a US-directed regime-change operation.

This report from The Real News discusses the election in a non-hostile way. I've heard reports from the two analysts interviewed on this segment, Lucas Koerner and Greg Wilpert, and my impression is that both tend to be careful with the facts they report. Maduro Wins the Presidency in Venezuela - What Will the US Do Next? 05/21/2018:

Bloomberg reports that the current American sanctions against Venezuela could drive oil production down below a million barrels a day in the new few months. (Sanciones de EE.UU. a Venezuela impulsan precios del petróleo El Espectador 22.05.2018)

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