Political Crisis in Venezuela

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Venezuela that could be one of the richest countries on the planet, is going through the deepest economic and political crisis.

Political Crisis in Venezuela

Venezuelan President Nicolas Maduro (Photo: EPA / Miguel Gutierrez)

During the past 19 years, the so-called Chavistas, supporters of Hugo Chavez, a former Venezuelan President and leader of the Fifth Republic Movement socialist political party, which later joined the United Socialist Party of Venezuela, have been holding power in the country. Now, the right-wing opposition for the first time in 17 years has gotten a chance to get to power. But the scale of Venezuela’s problems is huge. Whether the oppositionists can solve them is a big question.

The results of the last presidential election of 2013, when the current Venezuelan President Nicolas Maduro won, were met with a protest. Henrique Capriles Radonski, a representative of the Justice First party, who was just a little bit behind Maduro, refused to recognize his opponent’s victory, demanding to recount votes. However, the National Electoral Council confirmed the victory of the ‘Chavista’ despite clashes between police and protesters, during which 7 people were killed and over 60 other were injured.

Since February 2014 and to this day, demonstrations and protests, the main reasons of which are corruption, the economy’s state and shortage of goods, have been continuing in the country. Since 2016 protestors also has been having one more goal – to displace Maduro from the president post.

Against the backdrop of the continuing instability, in May 2016, opposition leaders appealed to the National Electoral Council (CNE) in order to initiate preparations for a referendum on the early termination of Maduro’s powers.

In August 2016, the electoral council stated that the initiative collected the necessary number of votes (1 percent of the electorate) for the second stage of the referendum. In October, the CNE announced that the second stage of preparations for the national referendum was indefinitely delayed, while the signature collection stage was scheduled to be held from October 26 to 28.

The parliament’s reaction was immediate. On October 25, 2016, the National Assembly voted to start a process of impeachment against Maduro. These events exacerbated the political crisis, and the beginning of communication between representatives of the executive branch and the Democratic Unity Roundtable electoral coalition of Venezuelan political parties took place only at the end of the month thanks to the participation of international mediators.

On January 9, 2017, the Supreme Court of Venezuela made it clear to the parliament that the resolution on “leaving the post” by the country’s President has absolutely no legal force. According to the state’s constitution, the National Assembly does not have the authority to remove the President from power. At the end of the same month, the Democratic Unity Roundtable accused the government of not fulfilling agreements, reached earlier, and said that it definitively stopped the dialogue with the authorities.

Thus, there is no real and immediate threat of the President’s removal from power due to the National Assembly’s resolution. However, in 2018, the country will hold regular presidential elections. And Maduro’s chances for the reelection are very slim.

On March 30, 2017, the Venezuelan Supreme Court announced that it has assumed the legislative power’s full powers instead of the National Assembly, which is controlled by the opposition. “As long as the situation of disrespect [to the judiciary] and adoption of invalid decisions by the National Assembly continues, this judicial body guarantees that performance of the parliamentary duties will be carried out directly by it or by a body that it will create for preservation of the state, governed by the rule of law,” the decision’s text reads.

According to the verdict, the disrespect for the judiciary lies in the fact that the Venezuelan parliament failed to comply with the Supreme Court’s requirement to invalidate the election of deputies from Amazonas state in December 2015. At that time, the judicial body took an appropriate decision due to violations revealed in the voting process.

The opposition won the parliamentary elections in 2015 for three reasons. Firstly, discontent was growing in the country due to the shortage of some categories of civilian goods, the level of corruption and the growing level of crime. Secondly, the already difficult economic situation was strongly affected by the global decline in energy prices, including oil, which is about 95 percent of Venezuela’s total exports. Finally, popularity of the current Venezuelan President as an independent politician was significantly lower than that of his predecessor, Chavez. The latter consistently gained 6-10 percent more votes than Maduro in presidential elections.

An anecdote circles around Venezuela: “When should I go to a store? When there is a huge queue in front of it.” Stores’ shelves are empty in all other times. As soon as bread, rice and coffee, which are sold at “fair prices” in accordance with Maduro’s decree, are delivered to stores, a crowd lines up near them. People’s crush for cheap food, which has become a deficit, or insane prices on food on the black market are all that the socialist state offers its citizens today.

Though, Venezuelans have Columbia next to them, where they run in droves to buy rice and medicines. Sometimes the state border is actually taken by storm.

In his fiery speeches, Maduro convinces fellow citizens of an artificial nature of the food and medicine crisis. And he is right at least in the fact that property owning classes do not need the socialist regime.

For example, in May 2016, the Polar brewing company, which produced almost 80 percent of all local beer, announced to the whole country that it stopped to brew beer. Polar’s owners said that the company needed to buy barley malt abroad, and they could do this, only using dollars. In 2016, the official rate of the so-called “strong bolivar” was 10 bolivars per dollar. However, it was impossible to get dollars for such price. The real rate was 400 bolivars per dollar, this price was operative on the black market. But when companies try to buy dollars, Maduro accuses them of storing dollars for future use and undermining of the bolivar’s course. In their turn, the property owning classes demand to let the local currency to float freely. Trying to press on the President, they might have created an artificial deficit of some goods and products.

In July 2016, McDonald’s suspended sales of the Big Mac in Venezuela due to a lack of basic ingredients – bread products. Sales of French fries were discontinued even earlier, it was had to be replaced with yucca roots, which were served in fried or salted form.

About the same time, the US Kimberley-Clark company, the leader in the manufacture of diapers, announced its closure. Maduro immediately stated that the Texas company was involved in the US economic war against Venezuela and promised to pay reliefs to 971 Venezuelan workers, who seized the Kimberley-Clark shopfloors. However, he does not have levers of influence on the situation at large. The President also cannot impact on the American Citibank bank, which promised to block all accounts of the Venezuelan Central Bank. At the same time, the International Monetary Fund (IMF) has predicted inflation of 1640% in Venezuela in 2017.

Market leaders all over the world advise the Venezuelan authorities to abandon the “strong bolivar” and state regulation of the economy. But if Maduro took their offer, the country’s population would literally starve to death, as well as the fight against poverty, the main real achievement of socialists, would be lost.

A sad paradox is that Venezuela could be one of the richest countries on the planet. Its explored reserves of oil are the largest in the world and amount, according to different data, from 70 to 170 billion tons or 17.5% of the global reserves. Oil sales provided 95% of the Venezuelan GDP, and decades of high prices for it created a material base for the Venezuelan socialism.

The fall in the world oil prices knocked down Venezuela. If earlier the population’s poor majority supported the socialists’ government, as it provided them with a decent standard of living, now they criticize Maduro in the same way as the bourgeoisie initially did this. Chavez’s political heirs are rapidly losing their social base – rich and poor people have mixed in the criticism of the President. Venezuelans post in social networks photos of their empty refrigerators with signatures, such as “That’s what socialism brought us,” and justifications of the country’s leadership in the style of “This all is intrigues of the CIA” have long ago bored everyone.

Against the background of inflation, empty stores’ shelves and regular power cuts, it was not difficult for the right-wing opposition to collect signatures of 400,000 voters in order to initiate the referendum on Maduro’s resignation. Henrique Capriles, a representative of the Justice First party, who was just a little bit behind Maduro in the presidential election in 2013, hoped to win the pre-term election, which should have been held as a result of the referendum.

Capriles insisted on a speedy determination of the referendum’s date and was openly supported by the US – then Secretary of State John Kerry warned that he would not allow Caracas to “play games with postponement of the referendum.” At the same time, all Anglo-Saxon media actively published articles about the appalling situation in Venezuela, and human rights defenders accused Maduro of provoking a humanitarian catastrophe. Leaders of the Organization of American States (OAS) even proposed to suspend the Venezuela’s membership in the organization due to regular violations of human rights in the country. In this way, in addition to the economic pressure, Venezuela is also under strong information pressure.

In this situation, Venezuela’s major partners, China and Russia, try to somehow help the state. So, Beijing restructured Caracas’ debt at $ 65 billion, while CEO of Rosneft Igor Sechin visited the country in order to “expand cooperation between Rosneft and the Venezuelan PDVSA company.” However, this has not reflected on contents of refrigerators of ordinary Venezuelans, and the dissatisfaction with the President continues to grow.

Capriles, the main rival of the current President, is a representative of the Venezuelan bourgeoisie and a rich family’s heir. His program includes improving relations with the US and “democratization of public property.” In this way, it is supposed that under his rule American corporations will come to Venezuela, state property will be privatized, and the country will return to the wild capitalism, traditional for these places. It is difficult to say how much it can help ordinary Venezuelans. Venezuelan liberals have no practical experience of governing the country.

The opposition likes to criticize the socialists’ government for the fact that it has been eating oil revenues for seventeen years instead of diversifying the country’s economy. But the opposition also has been living in great style all these years, only scolding the socialists and drawing caricatures of Chavez. It is not entirely clear how they are going to solve problems of the economic base, the main of which is a 95 percent share of oil revenues in the GDP structure.

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  • DJ Double D

    Great Article.

  • Expo Marker

    Venezuela was hit quite hard when the Saudi’s started over-producing oil, causing the market to flood. But on the other hand is the core fact that Venezuela never bothered to diversify the economy. As Russia saw in 2014, there is a genuine need to diversify the economy.

  • Daniel Castro

    What’s up with this socialist article?! Half of the tells real facts about the economic crisis in Venezuela while other half try to blame it on the opposition and the CIA, this is riiculous! I live in Brazil and we here had the same problem with socialist government. The problem with latin american socialists is they are the opposite of classic socialist governments!

    While in classic socialist created a socioeconomic structure where everyone should work with no exceptions, latin american “socialists” socioeconomic structure is to give alimony to everyone using government resources, while classic socialists punished crime severely with death penalty for armed robberies, rape, corruption, latin american socialists treat violent criminals as “victims of society” and do nothing to fight crime. Hence the shortage in goods in Venezuela, and rampant crimes!

    Oil alone can’t develop state infrastructure, sustain education, healthcare, social security give food and luxuries to everyone! The strategic sector of oil is the treasure of the state, it should be to pay state debt, develop great infrastructure programs, military forces, technology sector and currency reserves, everything else (social security, health, education) should be the work of the people… But how the people will develop any sort of economic sector if they are reduced for nothing more government parasites living from alimony?!

    It is a shame to blame the crisis on the productive class (i.e. the owning class)!What do you want, that they produce to sell by less than the cost of production?! No wonder there is no food in Venezuela, working on the field is very hard work, and if you work only to be indebted what is the point?! What happened is most of venezuelan farmers reduced their production to subsistence levels, or even left the country. The fact that venexuela has shortage of rice is a testimony for the incompetence of such government, as the Roraima state in Brazil has land and climate very similar to Venezuela and it is excelente to produce rice. The fact is Venezuelans do not have food because they’ve stopped the production, and the blame for that is all on the government, government want farmers working as slaves?! Sorry, this won’t happen!

    As to all the blame on CIA, I’m sorry to say this, but it is the obligation of the government to protect the nation against foreign enemies, however following such delusional socioeconomic system they made completely Venezuela vulnerable even the slightest fluctation in the price of oil. The same thing happened here here in Brazil where in our 14 years of socialist governments they ruined our military forces?! How can you say you are against gobalism when you make your country vulnerable to external aggressions? Add to that the fact this people are known internationalists from international socialist movement?!

    Russia and China should dump this incompetents and start to search people of greater value to work in South America, I know you have historic ties with latin american left, but it is better to start to question the value of such ties as this people bring nothing but misery wherever they go.