Sunday, February 10, 2019

Maduro Blocks Aid

Keeping Venezuelan's on the Maduro Diet...

Friday, February 8, 2019

How Maduro Lost the Support of the Poor...

from the New York Times
Maduro Turns to Special Police Force to Crush Dissent

CARACAS, Venezuela — The agents barged into the home of Yonaiker Ordóñez, 18, on Sunday morning as he slept. Dressed in helmets and carrying rifles, the men grabbed the teenager and forced him to another room without explaining why they came, his family said.

“They took him to the area behind and killed him there,” said his sister, Yengly González.

The operation resembled one of the many police raids against the gangs that terrorize Venezuela’s poor neighborhoods. But Mr. Ordóñez’s only crime, his family said, was that he attended a protest against the government days before.

President Nicolás Maduro is facing the biggest challenge to his authoritarian rule yet. Protesters are in the streets, an opposition lawmaker has declared himself the rightful president, a growing number of foreign governments have backed that claim and the Trump administration has intensified the pressure, cutting off Mr. Maduro’s access to oil sales in the United States — a principal source of his government’s cash.

In the face of the crisis, Mr. Maduro has hit back hard, sending out security forces to crush dissent in deadly operations that have alarmed even some of the president’s traditional supporters.

But while Venezuela’s armed forces have publicly declared their allegiance to Mr. Maduro, they have not taken the muscular role they have in the past. When months of chaotic demonstrations arose against Mr. Maduro two years ago, it was largely the National Guard that squelched dissent with batons and bullets, with protesters prosecuted in military courts.

But this time, in a potential sign of the strained loyalties inside the military, much of the crackdown has been entrusted to a relatively new national police unit that Mr. Maduro created to conduct raids on gang groups in Venezuela’s slums.

Now the unit appears to have his political opponents in its sights. Known as the Special Actions Force, or FAES, it is being sent to work as Mr. Maduro’s enforcer in the poor neighborhoods that once supported him but have turned against him, according to human rights groups, former government officials and current lawmakers.

At least 40 people have been killed in the latest round of protests against Mr. Maduro, largely in nightly raids in poor neighborhoods involving the special police unit, human rights groups say.

“FAES has become deeply involved in acts of repression,” said Delsa Solórzano, a lawmaker in the opposition-led National Assembly who met with recent victims of the raids.

The involvement of the special police unit is especially worrisome, human rights advocates say, because the unit was created to put down armed gangs or rescue hostages, not to control crowds of protesters in a peaceful manner.

“The consequence when they go in is massacres,” said Keymer Ávila, an investigator with Provea, a Venezuelan human rights organization. “They weren’t made to handle demonstrations.”

But Cliver Alcalá, a former military general who broke ranks with Mr. Maduro, said it was not surprising that the government was relying on the special police unit to do its bidding. The reason: It has lost trust in many members of the armed forces to confront protesters the way they did in 2017.

Many of the National Guardsmen who were sent to the streets in previous years have not returned to work because their salaries are nearly worthless, Mr. Alcalá said. Venezuela’s inflation — the worst in the world — has obliterated them.

Beyond that, he said, the government is afraid of uprisings or public shows of defiance by members of the armed forces, including the one last week, when members of the National Guard were arrested after pledging allegiance to the opposition. Other small uprisings have taken place before being put down.

Human rights groups say little is known about Mr. Maduro’s special police force, including the names of its top commanders and who exactly has been invited to form its ranks.

The unit patrols Venezuela dressed in black, with the identities of its members concealed by balaclavas covering their faces. A former Venezuelan government official, who asked not to be named because he is being pursued by the government, estimated its ranks to be about 1,500 people. They’re seen in Caracas on the backs of motorcycles in order to penetrate hillside slums, where they arrive heavily armed with assault rifles and body armor.

“Their faces are covered because they want impunity,” said Luis Izquiel, a criminologist in Caracas who teaches at the Central University of Venezuela. “They know they’re violating human rights.”

The group came into existence in 2017 as Mr. Maduro struggled to wrest control of the country’s poor neighborhoods from criminal gangs.

The government had been organizing joint raids with the police and armed forces, called Operation Liberate the People, which became increasingly bloody. In a single two-year period, the government said the raids killed more than 500 people.

Facing mounting opposition to the raids, Mr. Maduro changed course, creating the special unit of his national police charged with a similar task.

The new police are taught to be loyal to the president, training at Venezuela’s National Experimental Security University, an institution founded under Mr. Maduro’s predecessor, Hugo Chávez.

Mr. Izquiel, the criminologist, said that officers leave after only six months training that is largely conducted by ideologically driven professors who preach allegiance to Mr. Maduro’s government.

Even before the protests, the police unit had been involved in several high-profile crackdowns.

Among them was the killing of Óscar Pérez, a rogue police pilot who commandeered a helicopter and captured the attention of many Venezuelans in 2017 when he fired blank ammunition on government buildings and unfurled a banner calling for Venezuelans to rebel against Mr. Maduro.

For months, he continued to attack military bases and taunt the government on social media.

In an interview with The New York Times shortly before his death, Mr. Pérez asserted that a pro-Maduro paramilitary group had penetrated the special police unit and exerted influence over it. It was an explosive assertion even then, because it meant that civilian vigilantes were acting as uniformed police officers.

The day of Mr. Pérez’s death, the leader of the paramilitary group, a man named Heiker Vásquez, was killed fighting alongside FAES officials who had surrounded Mr. Pérez.

Uniformed members of the special police unit were also photographed in Mr. Vásquez’s funeral procession along with members of his paramilitary group, known as the Three Roots. In Venezuela, these armed paramilitary groups are known as “colectivos,” and typically have their roots in fervently pro-Chávez circles.

“If it’s not FAES in these raids, it’s colectivos dressed in FAES uniforms,” said Ms. Solórzano, the legislator, saying that she believes the pro-government groups are being armed and asked to fight alongside regular officers.

Julio Reyes, an opposition activist, said he was targeted on Sunday in the Tacagua Vieja neighborhood by the special police unit.

Just after he had gotten up and his wife began making coffee, he said he heard motorcycles revving in front of his house. Six masked men barged into his home, forced his family onto a couch and pointed a gun at his wife and him, he said. After a short period, they left.

“I said, ‘Brother, lower your weapon,’” Mr. Reyes said. “‘You’re not talking to a criminal, you’re talking to a father who works Monday through Saturday.’”

Relatives of Mr. Ordóñez, who was killed that day, said they never got a real explanation for his death.

His sister, Ms. González, said she asked a FAES officer patrolling the area why the group had shot her brother. The officer said that Mr. Ordóñez had been killed in a fight with the unit and had been trying to flee, she recalled.

But Ms. González said the explanation made little sense because her brother had already been hit with rubber bullets fired by FAES officers during a protest several days ago, and was barely able to walk.

On Wednesday, at his funeral, Mr. Ordóñez’s body lay in a wooden coffin lined with butcher paper. Family members knelt beside it in the back of a pickup truck before it was lowered into a grave.

“The government obliges you to be what they want you to be,” said Ms. González. “Because if not, they will imprison you, or you’re dead.”

Wednesday, February 6, 2019

How Venezuela Struck It Poor

from Foreign Policy
In the spring of 1959, at a secretive meeting at a yacht club in Cairo, Venezuela’s then-minister of mines and hydrocarbons, Juan Pablo Pérez Alfonso, hatched a plan to give big oil-producing countries more control over their black gold — and a greater share of the wealth it promised to create. A year later, his scheme would be formally christened the Organization of the Petroleum Exporting Countries, or OPEC. Venezuela, which sits atop what are arguably the biggest petroleum reserves in the world, was the only non-Middle Eastern country to be included — a testament to its importance to the global oil business.

Venezuela was considered rich in the early 1960s: It produced more than 10 percent of the world’s crude and had a per capita GDP many times bigger than that of its neighbors Brazil and Colombia — and not far behind that of the United States. At the time, Venezuela was eager to diversify beyond just oil and avoid the so-called resource curse, a common phenomenon in which easy money from commodities such as oil and gold leads governments to neglect other productive parts of their economies. But by the 1970s, Venezuela was riding a spike in oil prices to what looked like a never-ending economic bonanza. Complemented by years of stable democracy, it seemed a model country in an otherwise often troubled region.

Such success makes the sorry state of Venezuela’s oil industry today, not to mention that of the country at large, all the more surprising — and tragic. The same state that, six decades ago, dreamed up the idea of a cartel of oil exporters now must import petroleum to meet its needs. Crude production has tanked, hitting a 28-year low last fall when it dipped under 2 million barrels a day. “I don’t think we’ve ever seen a collapse of that magnitude [anywhere] without a war, without sanctions,” said Francisco Monaldi, a Latin America expert at Rice University’s Baker Institute for Public Policy.

Venezuela has not, of course, fought a war in recent years. But the combination of plummeting oil revenues and years of government mismanagement has virtually killed off the country’s economy, sparking a humanitarian crisis that threatens to engulf the region. Caracas refuses to track inflation (or at least publish its findings), but the National Assembly calculates the annual rate to be more than 4,000 percent, and the International Monetary Fund predicts it could hit 13,000 percent this year. Given how much prices have already risen since January, the real number could be 10 times higher.

Venezuela’s murder rate, meanwhile, now surpasses that of Honduras and El Salvador, which formerly had the world’s highest levels, according to the Venezuelan Violence Observatory. Blackouts are a near-daily occurrence, and many people live without running water. According to media reports, schoolchildren and oil workers have begun passing out from hunger, and sick Venezuelans have scoured veterinary offices for medicine. Malaria, measles, and diphtheria have returned with a vengeance, and the millions of Venezuelans fleeing the country — more than 4 million, according to the International Crisis Group — are spreading the diseases across the region, as well as straining resources and goodwill.

What explains the country’s precipitous decline from being one of Latin America’s richest and most stable states? Mark Green, the head of the U.S. Agency for International Development, blames President Nicolás Maduro — who, in May, won another six-year term in elections widely denounced as fraudulent — and his “delusional” policies. But while there’s no question Maduro is partially culpable, to fully understand how a country blessed with the world’s biggest oil endowment could end up so crushingly poor requires going much further back. The fuse for the bomb that is now blowing up Venezuela’s oil industry — and the country along with it — was deliberately lit and fanned by Maduro’s predecessor and mentor, the strongman Hugo Chávez, not long after he swept into power in the late 1990s.


The decline and fall of Venezuela’s oil industry essentially begins with its nationalization in 1976, a time of booming crude prices and rising resource nationalism. President Carlos Andrés Pérez sought a much greater role for the state over the economy and especially wanted to use the country’s fast-growing oil wealth to turbocharge development. That year, to gain full national control over the oil fields, Caracas banished foreign oil firms and created a new, state-run oil monopoly called Petróleos de Venezuela (PDVSA). The moves marked the capstone to Pérez Alfonso’s decades-long dream of Venezuela grabbing full control of its destiny. It was also the logical outcome of the widely held belief that the country’s oil, discovered in 1922 on the shores of Lake Maracaibo, was national patrimony.

At first, Venezuela’s state-owned oil company stood out from peers such as Petróleos Mexicanos in many ways. A large number of its executives, for example, had previously worked for foreign companies in the country and imbued the new firm with a business-oriented outlook and a high degree of professionalism. PDVSA had a lean workforce, an efficient cost structure, and a global outlook: A decade after its creation, the company acquired half of Citgo, the big U.S. refiner, and stakes in a pair of European refineries.

Yet none of these assets proved much help when a global oil glut in the mid-1980s depressed prices and hammered the national economy. OPEC members struggled to prop up prices by cutting back output. By the middle of the decade, Venezuelan production had fallen below 2 million barrels a day, or about 50 percent less than during the heyday right before nationalization.

When oil is cheap, it becomes very tempting for countries to pump more crude — even if that extra production ends up keeping prices low. And so, to right the reeling Venezuelan economy in the early 1990s, the government sought to reopen the oil industry to international companies. The outsiders would be especially useful in accessing Venezuela’s mother lode, the Orinoco heavy oil belt, which holds more than a trillion barrels of tarlike bitumen. Unlike regular light crude oil, which can be pumped straight out of the ground and sold as is, heavy oil is more difficult to extract and then needs to be upgraded to something resembling liquid oil before sale. Doing all that takes the kind of cash and sophisticated know-how PDVSA lacked at the time.

By the mid-1990s, international firms, including Chevron and ConocoPhillips, had moved back into the country and were hard at work unlocking Venezuela’s massive heavy oil deposits. But in 1998, the price of oil collapsed again, dipping to $10 a barrel. The impact on Venezuela — which, like many oil-rich countries, had never managed to diversify its economy despite a bout of reform efforts in the 1970s — was severe, given that petroleum exports then represented about one-third of the state’s revenues. Then along came Chávez, a former army lieutenant colonel who’d served time in prison for an abortive coup attempt in 1992. He won the 1998 presidential election on the promise to reshape and restore Venezuela’s reeling economy.

Among his first targets: the technocrats at PDVSA, especially the company’s deeply knowledgeable then-chairman and CEO, Luis Giusti, who’d led the drive to reopen the country’s oil sector. “Chávez saw Giusti as a potential rival. In fact, Chávez used the slogan ‘PDVSA is part of a state within a state,’” said Juan Fernández, a former PDVSA manager who would also fall afoul of the strongman. Giusti, alarmed by Chávez’s plans for the oil company, resigned just as he took office in early 1999; he was then replaced by a revolving cast of political appointees. The departure of Giusti, who’d spent three decades in the Venezuelan oil business and had won international plaudits for overhauling and modernizing the state-run firm since taking over in 1994, would prove to be bad news for PDVSA’s fortunes.

Chávez’s goal was to exert control of PDVSA and maximize its revenue, which he needed to fund his socialist agenda. But achieving the latter required cooperating with the rest of OPEC, which, as in the 1980s, wanted to cut production in order to raise prices. The problem for Chávez was that many of the PDVSA’s then-managers wanted to increaseproduction, by continuing the development of Venezuela’s technically challenging heavy oil fields. To do so, they needed to reinvest more of the company’s earnings rather than hand them all over to the government. So the managers had to go.

Unfortunately for Venezuela, Chávez — like many of the people he appointed to run PDVSA — knew nothing about the business that was so central to the country’s prosperity. “He was ignorant about everything to do with oil, everything to do with geology, engineering, the economics of oil,” said Pedro Burelli, a former PDVSA board member who left the company when Chávez took power. “His was a completely encyclopedic ignorance."

But Chávez wasn’t the type to let that stop him. In 2001, the former paratrooper pushed through a new energy law that jacked up the royalties foreign oil firms would have to pay the government. It also mandated that PDVSA would lead all new oil exploration and production; foreign firms could only hold minority stakes in whatever partnerships they struck with the national company.

In 2002, Chávez took two more steps to turn the once-proud PDVSA into his private preserve. First, he installed a new president, Gastón Parra Luzardo, a leftist economics professor who was a fierce opponent of opening the industry to more private investment. Then, in April, he went on live television to humiliate and fire a handful of PDVSA managers, replacing them with political hacks. Together, the moves sparked violent public protests, which turned into a coup attempt against Chávez.

The president survived the putsch, but his popularity plummeted — especially inside PDVSA. By the end of 2002, opposition to Chávez had solidified, and big labor groups called for a national strike in hopes of pressuring him to leave office. Oil workers backed the effort, setting the stage for what would turn out to be the critical step in PDVSA’s road to ruin.

During the two-month work stoppage, PDVSA’s output plummeted as field workers stopped pumping and tanker crews refused to leave port. Venezuela’s oil production fell from close to 3 million barrels a day before the strike to levels as low as 200,000 barrels a day in December 2002.

Crucially for Chávez, however, the international oil companies refused to join the protest. “The multinationals kept producing during the strike,” said Monaldi of Rice University. “That is what saved him,” by blunting the economic impact of the protest.

Chávez immediately fought back. During the strike, he axed scores of senior executives, including Juan Fernández, one of the organizers of the protest. In the months that followed, the pink slips kept coming, and by the time the smoke finally cleared, Chávez had fired more than 18,000 workers. With them went most of the managerial expertise and technical know-how PDVSA had managed to preserve during the earlier purges.

This evisceration of the PDVSA’s human capital would prove the most damaging of Chávez’s many moves against the company. Even his own government soon realized the harm it had done. Accidents and spills began to proliferate, and in 2005, a top energy ministry official admitted privately that it would take at least 15 years to rebuild the technical skills lost by the mass firings. Another energy ministry official even asked U.S. diplomats in Caracas to help arrange training in the United States. And in the years since, the situation has only worsened. Conditions at the company (and in the economy) are now so bad that employees take home a pittance — just a handful of dollars a month — and face political pressure to support the regime. Such treatment has led to the large-scale flight of skilled workers: more than 25,000 since last year, union officials say. According to Reuters, the exodus has grown so big that some PDVSA offices have begun refusing to let their workers resign.

“PDVSA was one of the best. They really knew how to operate,” said one executive at an international oil company with long experience in Venezuela. “The purge massively screwed them over, bled them of guys who knew what they were doing on so many levels. And they’ve never recovered.”

While some of his underlings clearly understood the havoc he was causing, Chávez either didn’t know or didn’t care; determined to finance his ongoing socialist revolution and use cheap exports to buy friends abroad, he kept turning the screws on the oil industry. Using legally questionable methods, he started siphoning off billions of dollars in PDVSA revenue to pay for his social programs, including housing, education, clinics, and school lunches. While this strategy may have paid off politically in the short term, it was extremely dangerous: for the more cash the government took out of PDVSA, the less money the oil company had to invest in maintaining production or finding new resources. Since oil fields gradually produce less oil over time as they get tapped out, countries constantly need to dig new wells and rejuvenate shrinking reservoirs with injections of water or gas. Thanks to their geology, Venezuela’s oil fields have enormous decline rates, meaning the country needs to spend more heavily than other petrostates just to keep production steady. But as Chávez channeled more income into other areas, PDVSA was forced to mortgage the future to pay for the political present.

In 2005, Chávez once again turned on the foreign firms. He raised royalty rates yet again and billed the companies for billions of dollars in bogus back taxes. Then he began forcing foreign companies to cede the bulk of their operations to PDVSA, a process U.S. Embassy officials described at the time as “creeping confiscation.” Every year, “Chávez systematically did something” to the international firms, “whether raising their taxes or forcing them to sell oil for local currency,” Monaldi said. These provocations exasperated foreign executives; even officials from the China National Petroleum Corporation grumbled to U.S. officials about Caracas’s interference. ExxonMobil and Conoco threw in the towel and left. (This spring, Conoco finally won a $2 billion arbitration award against PDVSA for the expropriation of its assets.) Yet many others, such as Chevron, found Venezuela’s gargantuan potential so tempting that they accepted the punishing new terms.

Despite the presence of these holdouts, Chávez’s increasingly erratic behavior further reduced the investment needed to get the heavy oil out of the ground. So did the government’s use of PDVSA’s revenue to fund social programs and to pay off Venezuela’s sovereign debts. “During the highest oil boom in history, when every other country in the world increased investment, Venezuela did not, and production kept declining,” Monaldi said.

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For all Chávez’s abuses and mistakes, Venezuela’s oil industry managed to stagger along for a surprisingly long time. Production held virtually steady from 2002 (just before the strike) to 2008, when global oil prices peaked at almost $150 a barrel. That year, Venezuela earned about $60 billion from oil. (These production numbers come from OPEC; the government’s own estimates are higher and viewed skeptically by the rest of the industry.)

The higher prices more than made up for the slight decline in production — between 2002 and 2008, Venezuela’s output fell from 2.6 million barrels a day to 2.5 million — allowing Chávez to keep spending and masking the need for a major overhaul of the industry. But even high crude prices couldn’t hide the deeper economic dysfunctions caused by Chávez’s efforts to build what he called “21st-century socialism.” Shortages of common consumer goods became endemic. A country that was once an exporter of agricultural products had to start importing lots of government-subsidized food — another common feature of the resource curse. “In 2007, there were already intermittent shortages,” said Patrick Duddy, who served as U.S. ambassador in Caracas from 2007 to 2008 and again from 2009 to 2010. “There was, at times, no milk of any sort on the store shelves, not fresh, not powdered, not condensed — and this was when oil prices were soaring. It was startling.”

Increasingly desperate, the government soon found yet another way to strip-mine PDVSA: by using whatever management expertise it had preserved to run other parts of the economy that were breaking down. By 2007, for example, PDVSA had been dragooned into producing and distributing milk; later, the firm began importing other basic foods, from cooking oil to rice and beans. The company’s work in these areas may have provided the country with some short-term relief, but it further distracted PDVSA from what should have been its core business.

Reality finally came crashing down in the summer of 2014, about a year after Chávez died from cancer and was succeeded by Maduro. Oil prices collapsed from a high of more than $100 a barrel in the summer to less than half of that by January 2015. By the end of that year, Venezuelan oil was selling for less than $30 a barrel, even as the budget was predicated on prices of $60 a barrel. By this point, Venezuela had become nearly wholly dependent on oil revenues, which made up about 95 percent of its export earnings. Cheaper oil tipped the economy into recession in 2014 and a full-blown crisis in 2015, with GDP shrinking by almost 6 percent and inflation exploding. And because Venezuela had neglected to diversify its economy, the country was out of options.

The one relative bright spot in Venezuela’s oil industry today is the superheavy Orinoco fields, jointly operated with foreign firms since the 1990s-era opening of the sector. Crude production in the Orinoco actually grew during the first half of this decade, and even now production declines have been modest. That’s a sharp contrast to steep output declines at traditional oil fields solely operated by PDVSA. But even the superheavy fields are struggling to keep production levels close to steady. Before it can export the heavy bitumen, PDVSA needs to blend it with light oil, and since at least 2010, Venezuela’s own light oil production has been falling. That forces the state energy company to spend much-needed cash importing light oil. Venezuela also imports gasoline — which it gives away to consumers for a paltry 4 cents a gallon. And it loses money when purchasers reject its cargoes of crude oil for their poor quality, an increasingly common problem. In other cases, it doesn’t even get paid: While the country now sends China 400,000-odd barrels a day, for example, Beijing considers them repayment for Caracas’s debts. Meanwhile, despite the collapse of its oil industry, Venezuela continues to buy foreign oil to ship, at a loss, to the regime’s ideological cousins in Cuba — a bitter legacy of Chávez’s plan to use Venezuela’s oil riches to buy friends in the neighborhood.

All these problems cost PDVSA — and Venezuela — huge amounts of cash. Selling oil at a discount, shipping it off to China (and Russia) to pay off the national debt, and subsidizing Venezuelan drivers cost the company, and the country, more than $20 billion a year, Monaldi estimated. Among other things, this massive shortfall has made it increasingly difficult for PDVSA to pay service companies such as Halliburton and Schlumberger, which help it drill for oil. Last year, the two companies wrote off more than $1.5 billion in unpaid bills owed by PDVSA. And since they’re not getting paid, they’ve slowed their work on the mature oil fields that were once Venezuela’s livelihood. That means even less light oil — which makes all the industry’s other problems even harder to solve.

That toxic mix collided last year, when production suddenly collapsed by 30 percent, marking a net decline of 2 million barrels a day since Chávez launched his plan to use Venezuela’s huge oil endowment to build a socialist paradise. The oil ministry now is reportedly bracing for a further fall during the rest of this year, to as low as 1.2 million barrels a day.

The only way Venezuela, which is broke and stripped of talent, can possibly fix its oil industry today is by relying more on foreign companies. Even if they were given a free hand, however, it’s not clear that international firms could turn things around anytime soon; the lack of investment in recent years hasn’t helped the health of Venezuela’s oil fields. “If you messed up the reservoir by overproducing or underinvesting, then you just can’t pick up where you left off,” the international oil company executive said. “They’ve probably done some long-term damage to the reservoirs.”

But Caracas seems unwilling to even test the proposition and continues doing everything it can to alienate the very businesses it needs so badly. In April, for example, government agents arrested two Chevron executives who reportedly refused to cooperate in overbilling for oil supplies. The two were held for months while facing possible treason charges, which carry a prison sentence of up to 30 years.

Real reform would require a wholesale change in the country’s economic management: getting hyperinflation under control, establishing a stable and realistic exchange rate, and building an enforceable legal framework that could offer foreign investors some semblance of predictability and protection. Of course, it’s impossible to imagine Maduro doing any of those things, especially after recently winning (or stealing) another term. And his re-election carries additional short-term risks for the tottering Venezuelan oil sector. The United States is considering additional sanctions that could limit exports of U.S. crude and refined products to Venezuela or even ban the purchase of Venezuelan crude by U.S. refineries. Either move, or both, would deal yet another body blow to an industry already on its knees. What likely can’t be put back together again is the state oil company. “There is no money in the world that can bring that back,” Burelli said. “You might be able to rebuild an oil sector full of private players but not PDVSA.”

Ultimately, Caracas’s bid to nationalize the oil industry and assert its sovereign rights to the country’s black gold has all but ensured that less and less of that wealth will be left for Venezuelans. With no other vibrant economic sector, the only way to fund the government is by increasing oil production — which would require investing up to $10 billion a year for a decade, Burelli suggested — and the only way to attract that kind of investment is by offering international companies favorable terms. That means a bigger cut for them and a smaller cut for the state.

As Burelli put it, “To resurrect the oil sector, somebody will have to invest in it on their terms, not our terms, and that will not generate revenue. So, what will we live off?”

Tuesday, February 5, 2019

Breaking the Situation in Venezuela Down

from quilette
The day after Venezuela’s National Assembly voted to declare its president, Juan Guaidó, interim President of the Republic, I received a text from a former friend. “If the U.S. topples Vz [Venezuela],” he wrote, “I will hold you responsible.” I would have been happy to accept this responsibility had I done anything important enough to deserve it. But the idea was absurd and he knew it. If the Venezuelan regime falls—and I hope that it does—it won’t even be possible to credit (or blame) the United States. It is the Venezuelan people who finally are taking their destiny in hand and rejecting an intolerable status quo.

The message was not a serious attempt to apportion responsibility for Venezuela’s current upheaval; it was an attempt to shame me for my treacherous betrayal of the Bolivarian cause. An early supporter of the Revolution, I had traveled to Venezuela in 2013 to cover the April presidential elections. By the time I returned to the US, I was disillusioned and depressed. I decided I needed to start writing and speaking about what I had seen there. In an article I wrote for the radical magazine Counterpunch around that time, I argued that “the so-called ‘Bolivarian Revolution’ is bankrupt: morally, ideologically, and economically,” and I asked what we, as leftist solidarity activists, should do in response. “Should we continue to make excuses for incompetence, corruption, and irresponsibility and thereby make ourselves accomplices?” I asked. “Or should we tell the truth?”

I had resolved to tell the truth. Having been so wrong about something so consequential, I felt it was the least I could do. By then, Venezuela was already in a terrible mess. Many of those I had helped to convince of the possibilities offered by Bolivarian socialism were deeply suspicious of the mainstream media and deserved to hear what was going on from a writer they trusted. But, as it turned out, the people I wanted to reach didn’t want to hear such things. And the people I asked to publish my articles didn’t much want me to write about them either. As a result of my voltafaccia, former comrades and friends contacted my editors and publishers in (occasionally successful) attempts to have my articles spiked. I was denounced and slandered online and in print. Phone calls and emails to people I had thought of as friends now went unanswered. On those occasions when I encountered one of them in public, they looked the other way. Abruptly, I found myself excommunicated, and people I’d known for 30 or 40 years made it clear that they no longer wanted to be part of my life.

* * *
I’d originally come to California from the Bible Belt in the mid-’70s in search of enlightened neighbors. I knew what it was to live an isolated life. It had been lonely on my father’s farm in Southern Oklahoma. I had endured farm life for five years but, having grown up in the military, I longed for the company of diverse, worldly-wise people one often found among military brats. Having become a Christian a few years before, I hoped Berkeley would offer a deeper faith than I’d found in fundamentalist churches.


I hitchhiked west and in Berkeley I joined the “radical Christian” community of the House Church of Berkeley that had grown out of Christian World Liberation Front (CWLF). From the margins of that community I gradually found my way, through liberation theology, into the secular Left. For nearly a decade I did solidarity work with the Sandinista Revolution until that process came to a halt when its “vanguard” Sandinista National Liberation Front (FSLN) was removed from power in the elections of 1990.

Following the collapse of communism, I ended up with the other “dead-enders” in Berkeley, scratching around in the depleted soil of radical politics for any worm of hope that might emerge. Those were desperate years. I soon hitched a ride on the Redwood Summer bandwagon, the joint IWW (Industrial Workers of the World, “Wobblies”) and Earth First! project to protect the last stands of old growth redwoods in Northern California from logging companies. I played a very minor role in that campaign, printing the flyers announcing the actions, but I was quickly drawn into working in the IWW. I was briefly an editor for the Bay Area Branch Bulletin and a co-editor of the Industrial Worker, and then I spent ten years in an IWW union job shop (New Earth Press) where my partner and I did a lot of ecological printing for local community organizations.

After we sold the business, I went to graduate school at San Francisco State University for a couple of very dismal years in academia. Then, after graduation, I spent the summer of 2004 in Nicaragua interviewing ex-Sandinistas who were now in opposition to the FSLN, the “glorious revolutionary vanguard,” which had been reduced over time to the status of a populist party serving the caudillo (strongman) Daniel Ortega. During the years of the Nicaraguan Revolution (1979-1990), I had translated and published the revolutionary poetry and writings of Sandinista militants—mostly farmers, low-ranking militia members, and even young children. As I was a poet, it seemed appropriate work to help spread the word about a process I found hopeful, and endangered by the hostile policies of the Reagan administration. I knew very little at the time of the Sandinistas’ responsibility for generating the war that would eventually tear their country apart. Most of us on the radical Left distrusted the media, and it was only recently that I returned to that period (in Chapter 11 of my 2016 memoir) to uncover details I had ignored during the years of that brutal civil conflict.

Foremost among the poets I’d translated during the years of the Sandinista Revolution was Ernesto Cardenal, a revolutionary priest and the Sandinista Minister of Culture. Cardenal and other “liberation theologians” were preaching a synthesis of Marxist revolutionary ideology and Christian theology, and they were my inspiration back then. By 2004, I no longer identified with Christianity, and my faith in Marxism was also in doubt. Nevertheless, I still considered myself some kind of socialist, and I thought Cardenal might be able to reassure me that there were embers of socialism still burning somewhere in Latin America. He duly obliged. Towards the end of our interview, when I asked him to name the projects in Latin America today which gave him hope, he didn’t mention (as I thought he would) the Zapatistas. “The Bolivarian Revolution,” he announced. President Hugo Chávez was doing some very interesting things down in Venezuela, he thought, and he encouraged me to visit and see for myself.

So, that December, eager to learn more, I flew down to Venezuela on Christmas break from Berkeley City College where I had been working as an adjunct English instructor. I immediately fell in with like-minded leftists in the small Andrean city of Mérida, who introduced me to a good part of the Bolivarian community there. I was so inspired by what I found that I decided to take a year off from teaching so I could follow the Bolivarian process first-hand.

It is as difficult as it is uncomfortable to enter into a previous state of mind from a later, more “evolved” or developed state. I don’t like to admit that I once believed Jesus rose from the dead, but I did. I also believed that socialism would make everyone brothers and sisters and end what my comrades and I called “capitalist oppression.”1 The available scientific and statistical evidence (not to mention common sense) weighs strongly against belief in bodily resurrection from the dead. History has delivered a verdict of comparable finality about socialism. This verdict is routinely dismissed on the grounds that only corrupted iterations of socialism have been tried; if socialism is designed to unite mankind, but all previous versions of socialism have failed to do so, then it follows that true socialism has yet to be successfully attempted.

Rarely do true believers stop to consider that there may be something wrong with the logic of socialism itself. In his 1993 book Post-Liberalism: Studies in Political Thought, the English philosopher John Gray wrote that Soviet socialism forced its subjects into a “vast Prisoner’s Dilemma, with each being constrained to act against his own interest and, thereby, directly or indirectly, to reproduce the order (or chaos) in which he is imprisoned. Thus Soviet subjects are compelled to compete with each other in climbing the rungs of the nomenklatura, pursuing the ordinary goods of life by party activism or, in extremis, by informing or denouncing one another, and so renewing daily the system that keeps them all captive.” These are not exactly optimal conditions for building community.

By 2004, I was already well aware of what Marxist-Leninist socialism had done to the twentieth century. So why did I fall for the socialism that Hugo Chávez proposed in Venezuela? The reasons were part push, part pull. The push came from the American invasion of Iraq less than two years earlier. After a rapid battlefield victory, the news from the Middle East seemed to be growing more dire by the day. A little over a month before I left for Venezuela, allegations began to emerge that the US military were committing war crimes in Fallujah. Surely a better way than this remained possible? As I wandered around Venezuela that December I was desperate for an alternative I could believe in, no matter how fragile.

The pull was what Hugo Chávez was proposing. He acknowledged the problems of twentieth century socialism, and claimed to be offering something different—the Bolivarian version of “twenty-first century socialism.” This would be the “socialism with a human face” and quite unlike the repressive, totalitarian bureaucratic behemoth of Marxist-Leninism. As Chavista Gregory Wilpert insisted in his 2007 book Changing Venezuela by Taking Power, under Bolivarian socialism “ownership and control of the means of production must be collective and democratic.” Cooperatives were to play a large part in this and, after 2006, so would the local communal councils.

The money from the 2004 oil boom had saved Chávez from a recall referendum as he distributed the revenue flooding into the country among his followers. In this way, Chávez was able to fund his “revolution” from 2005 onwards. He ensured that the oil wealth would bypass the government, which he characterized as “corrupt” and (naturally) “counter-revolutionary.” Instead, money would be funnelled directly into a non-state-controlled corporate entity known as Fonden, the National Development Fund, over which, of course, Chávez personally presided. Fonden then parceled money out to cooperatives and the so-called “Missions” to the poor. During the oil boom, petroleum prices went from $10 a barrel to $100 and peaked at around $150 over the course of a decade. Given the astonishing amount of wealth generated, Chávez had a lot of money to throw at his pet projects. And, predictably, as the wealth trickled down, corruption increased since everyone had to get his or her piece of the patronage.

The cooperatives and community councils were among the many promising and inspiring initiatives dreamed up by Chávez in the early years of the boom. I witnessed these developments and documented them in my feature film, Venezuela: Revolution from the Inside Out. There really did appear to be great enthusiasm for these initiatives at the grassroots, especially as Hugo Chávez pushed them forward with massive funding. I quickly joined the chorus of supporters, first as invited poet to the Second World Poetry Festival of Venezuela in July 2005, then as a freelance (that is, unpaid) journalist for various left-leaning websites. When Chávez appeared on the scene, there were under 2000 cooperatives in the country. Once he came to power, that number skyrocketed to nearly 200,000, and I was there to document their ups and downs. I attended a few community council meetings and “political formation” training sessions, as well as a number of oil-funded projects like community kitchens, cultural events, and community development programs. It felt like something was really happening and that a fairer society was being built.

After the year I spent living in Venezuela (2005-2006), I returned as frequently as my schedule would allow, sometimes twice a year. Between 2008 and 2011, however, I became preoccupied with traveling across Latin America and conducting interviews with social movement activists for a book entitled Until the Rulers Obey that would be published in 2014. During that time, I was forced to become a “generalist” and didn’t have much time available to keep a close eye on what was happening in Venezuela. Nevertheless, from people who were watching, and from what I saw on my two visits there in 2011, I gathered that the situation was taking a bad turn. As even supporters were pointing out a few years later, by 2007 only about 15 percent of the 184,000 remaining cooperatives were active. If the distinction between earlier socialism and the Bolivarian version was that in the latter the “ownership and control of the means of production must be collective and democratic,” the new version wasn’t faring well at all.

Big questions began to arise about the financing of the community councils. Critics charged that these organizations were simply instruments that Chávez (and then Maduro) used to fund their supporters while denying access to the opposition. It was classic populism in the style of the Mexican PRI, which Mario Vargas Llosa once called “the perfect dictatorship.” By 2008, Chávez had suffered his first electoral defeat in a referendum that he had hoped would drive his socialist agenda forward. In response, he adopted a new approach to building twenty-first century socialism, and it looked very much like the twentieth century variety: nationalization of industries followed by the expropriation and redistribution of wealth and property. The “Bolivarian Revolution” was starting to look like any other rentier or petro-state—burgeoning corruption, a politics of clientelism, and a growing gap between the elite in control of the state (and, of course, the oil revenues) and the increasingly desperate mass of people at the bottom.

When the Arab Spring swept Gaddafi from power, I argued with my Venezuelan friends and felt the beginnings of a great divide opening up between us. I didn’t like the company Chávez was keeping—Gaddafi, Putin, Hezbollah, etc.—but neither was I ready to denounce him and his project as a fraud. Meanwhile, as my wife and I compiled the interviews with the social movement activists in Latin America, we began to notice themes and threads that confirmed what Raul Zibechi had told us when we visited him in Montevideo, Uruguay in the spring of 2012.

Zibechi was an astute analyst of Latin American politics with a focus on social movements. He explained that the so-called “Pink Tide” of leftwing governments that had risen to power on the wave of the commodities boom were in fact following the prescription of Robert McNamara, the former president of the World Bank and architect of the Vietnam War under Lyndon Johnson. In this scenario, moderately progressive governments were far more useful than their rightwing homologues to the world elite, because they provided a buffer between the transnational corporations and the social movements protesting the impact of resource extraction on communities and the environment. The testimony of our interviewees seemed to bear out Zibechi’s thesis. But surely this couldn’t be true of the more “radical” processes, like the one unfolding in Venezuela?

As I was writing the introductions to the Nicaraguan and Venezuelan chapters of our book, I investigated further, and what I discovered in the academic literature and reports by investigative journalists on both countries confirmed my doubts. By the mid-1990s, I’d already given up on the FSLN reforming itself. When I met Ernesto Cardenal again in 2004, he argued that there was no hope of any positive change from the “Ortega dictatorship.” My introduction to the Nicaragua chapter of our book was therefore fairly easy to write, since the direction the country was going under the Ortega mafia seemed clear. I quoted Dennis Rogers’s description of the Somoza dictatorship the FSLN had overthrown and remarked that it also described the present Ortega regime quite well: “A venal oligarchy run by a small elite satisfied to promote a form of what might be termed ‘hacienda feudalism.’” But Venezuela? Chávez? I had grown more critical, but I still believed in Chávez. As so many Chavistas in Venezuela had reassured me, “Chávez is clean, but all those surrounding him are corrupt.” This was a cult of personality—a One Man faith.

* * *
On the afternoon of March 5, 2013, I’d just finished another draft of my introduction to the Venezuela chapter when the phone rang and a friend told me that Hugo Chávez had died. I wrote a eulogy for Counterpunch that now, nearly six years later, I find embarrassing. I then decided to go back down to Venezuela for the elections. On the flight I caught up on my reading, including a fascinating biography of Hugo Chávez written by two well-known Venezuelan journalists, and some analyses of the massive problems in the Venezuelan economy, including the missing $29 billion dollars from the Fonden budget over which Chávez had presided.

Chávez, in the style of Latin American autocrats from time immemorial, had hand-picked his successor, Nicolás Maduro. Maduro was a fairly hard-core Leninist with a soft spot in his heart for Sai Baba, the Hindu guru-huckster accused of child molestation before he died in 2011. Compared to Chávez, Maduro is wooden and utterly lacking in the warmth and charm of his political “father.” But he had close relations with Cuba and was part of Chávez’s trusted inner circle and, most importantly, he was Chávez’s choice. Y punto, end of discussion.


Of the difficulties I faced over the next few days attempting to enter the country and cover the April 2013 presidential election between Maduro and Henrique Capriles, I have written elsewhere. Suffice it to say that I wasn’t granted entry until the day after the elections. Even then, due to the massive nationwide protests, I only managed to get to Mérida thanks to the generosity of oppositionists who gave me a ride. Over the course of the trip, they filled me in on the details of why Maduro had only won the elections by only slightly more than a single percentage point. This was despite using all the state resources at his disposal to (illegally) pay for and promote his campaign, including the state oil company PDVSA’s buses which drove state employees to the polls to vote for him. Chavistas simply hadn’t come out in large numbers to vote for him, and clearly many of the faithful had already gone over to the opposition.

Over the next few days and weeks, as I traveled through Venezuela, I began talking to the “counter-revolutionaries” and they offered evidence of their country’s deep problems to which my Chavista friends could only respond with rhetoric. In the industrial region of Guayana in the state of Bolívar, I interviewed union workers in the nationalized industries about the collapse of those industries. I was able to confirm their claims with secret footage shot for me by a worker using my own video camera, which showed the ruined interior of an enormous state factory where not a soul was to be seen on this particular work day.

In Caracas, I met with opposition human rights activists, union leaders, and leftwing academics for interviews. As the missing pieces of the puzzle began to fall into place, the reality of the Bolivarian catastrophe overwhelmed my resistance. Emilio Campos, then Secretary General of Carbonorca, the nationalized industrial coke plant, described the Bolivarian Revolution as nothing more than “a media show.” He called himself “a revolutionary for a plurality of ideas where a country seeks balance, not just for a party, or one sector of society. I believe in freedom of thought, in a diversity of ideas. But the hegemony of power makes you narrow-minded.”

The real turning point for me, however, was the interview I conducted with labor journalist Damian Prat, whose extraordinary book Guayana: El milagro al revés (Guayana: The Reversed Miracle) I had read over the two or three days it took me to get to Guayana from Merida by bus. The interview took place within a day or two of the shocking beatings of several prominent opposition National Assembly deputies by Chavista deputies during an official session. The state television cameras were turned off during the violence and afterwards, as the wounded were taken to the hospital. I was still shaken by the footage some brave parliamentarians had captured on their cell phones and leaked to the press.

I met Prat at his office at the Correo del Caroní, the Guayanesa daily paper. As I turned on my video camera, Prat smiled wryly. “Some of you in the critical, intellectual circles of Europe and the United States seem to think it’s fine that in the countries of our Latin America there are arbitrary governments and processes full of abuses that in your countries you wouldn’t consider allowing for a minute. No, in your own country you’d militantly reject the same things you seem to feel are perfectly fine to take place down here, so far away, where it’s exotic and interesting…” I felt my face redden with shame, and I suddenly felt my whole world capsize.

It would be months before I was able to return to Guayana to interview Rubén González, the former Chavista and Secretary General of Iron Mine Workers Union of the Orinoco (Sintra Ferrominera del Orinoco) about his own experience of imprisonment without trial “just for doing my job in the union and defending the rights of workers.” Referring to the claims of “sabotage” as the reason the industries were failing in the country, González told me that those in government “never thought of governing, but rather of enriching their little group in power. They never invested in these businesses, but totally bled them dry. They themselves are the saboteurs.” At the time of this writing, González is back in jail for organizing on behalf of workers in the state ironworks.

* * *
All of a sudden, I found myself in a strange world. I had drifted—at first gradually, but then definitively—into the camp of my former “enemies,” persuaded by their narrative and by the evidence before my own eyes. And, as I did so, I discovered that the editors of the news sites where I’d published my passionate defenses of the Bolivarian project for the past few years no longer responded to my pitches or my queries or my emails. As Venezuela disintegrated, I was lost and confused and alone.

And then, while I was grieving the loss of my innocent old life and its many friendships, something curious and unexpected began to happen. I discovered a great sense of excitement as I investigated “new” ideas for which I’d previously had nothing but contempt. I found myself reminded of Herbert Spencer’s quote at the end of the Alcoholics Anonymous Big Book: “There is a principle which is a bar against all information, which is proof against all arguments, and which cannot fail to keep a man in everlasting ignorance—that principle is contempt prior to investigation.”

For the next two years, I delved into the literature on Venezuela with renewed interest. Javier Corrales and Michael Penfold’s book, A Dragon in the Tropics, it turned out, was particularly well-researched and compelling. Since I could no longer get my writing published in any of the outlets for which I’d previously written, I redirected my energies into making a new film entitled In the Shadow of the Revolution with the help of a Venezuelan filmmaker and friend, Arturo Albarrán, and I wrote my political memoir for an adventurous anarchist publisher. But what preoccupied me more and more were the larger questions of socialism versus capitalism, and the meaning of liberalism.

I’d visited Cuba twice—in 1994 and again in 2010—and now, with my experience of Venezuela, I felt I’d seen the best socialism could offer. Not only was that offering pathetically meagre, but it had been disastrously destructive. It became increasingly clear to me that nothing that went under that rubric functioned nearly as well on any level as the system under which I had been fortunate enough to live in the US. Why then, did so many decent people, whose ethics and intelligence and good intentions I greatly respected, continue to insist that the capitalist system needed to be eliminated and replaced with what had historically proven to be the inferior system of socialism?

The strongest argument against state control of the means of production and distribution is that it simply didn’t—and doesn’t—work. The proof, as they say, is in the pudding—and in this case, there was no pudding at all. In my own lifetime, I’ve seen socialism fail in China, fail in the Soviet Union, fail in Eastern Europe, fail on the island of Cuba, and fail in Nicaragua under the Sandinistas. And now the world is watching it fail in Venezuela, where it burned through billions of petro-dollars of financing, only to leave the nation worse off than it was before. And still people like me had insisted on this supposed alternative to capitalism, stubbornly refusing to recognize that it is based on a faulty premise and a false epistemology.

As long ago as the early 1940s, F.A. Hayek had identified the impossibility of centralized social planning and its catastrophic consequences in his classic The Road to Serfdom. Hayek’s writings convinced the Hungarian economist, János Kornai, to dedicate an entire volume entitled The Socialist System to demonstrating the validity of his claims. The “synoptic delusion”—the belief that any small group of people could hold and manage all the information spread out over millions of actors in a market economy—Kornai argued, leads the nomenklatura to make disastrous decisions that disrupt production and distribution. Attempts to “correct” these errors only exacerbate the problems for the same reasons, leading to a whole series of disasters that result, at last, in a completely dysfunctional economy, and then gulags, torture chambers, and mass executions as the nomenklatura hunt for “saboteurs” and scapegoats.

The synoptic delusion—compounded by immense waste, runaway corruption, and populist authoritarianism—is what led to the mayhem engulfing Venezuela today, just as it explains why socialism is no longer a viable ideology to anyone but the kind of true believer I used to be. For such people, utopian ideologies might bring happiness into their own lives, and even into the lives of those around them who also delight in their dreams and fantasies. But when they gain control over nations and peoples, their harmless dreams become the nightmares of multitudes.

Capitalism, meanwhile, has dramatically raised the standard of living wherever it has been allowed to arise over the past two centuries. It is not, however, anything like a perfect or flawless system. Globalization has left many behind, even if their lives are far better than those of their ancestors just two hundred years ago, and vast wealth creation has produced vast inequalities which have, in turn, bred resentment. Here in California, the city of Los Angeles, “with a population of four million, has 53,000 homeless.” Foreign policy misadventures and the economic crash of 2008 opened the door to demagogues of the Left and the Right eager to exploit people’s hopes and fears so that they could offer themselves as the solution their troubled nations sought to the dystopian woe into which liberal societies had fallen. In his fascinating recent jeremiad Why Liberalism Failed, Patrick Deneen itemizes liberal democracy’s many shortcomings and, whether or not one accepts his stark prognosis, his criticisms merit careful thought and attention.

Nevertheless, markets do work for the majority, and so does liberal democracy, as dysfunctional as it often is. That is because capitalism provides the space for ingenuity and innovation, while liberal democracy provides room for free inquiry and self-correction. Progress and reform can seem maddeningly sluggish under such circumstances, particularly when attempting to redress grave injustice or to meet slow-moving existential threats like climate change. But I have learned to be wary of those who insist that the perfect must be the enemy of the good, and who appeal to our impatience with extravagant promises of utopia. If, as Deneen contends, liberalism has become a victim of its own success, it should be noted that socialism has no successes to which it can fall victim. Liberalism’s foundations may be capable of being shored up, but socialism is built on sand, and from sand. Failures, most sensible people realize, should be abandoned.

That is probably why Karl Popper advocated cautious, piecemeal reform of markets and societies because, like any other experiment, one can only accurately isolate problems and make corrections by changing one variable at a time. As Popper observed in his essay “Utopia and Violence”:
The appeal of Utopianism arises from the failure to realize that we cannot make heaven on earth. What I believe we can do instead is to make life a little less terrible and a little less unjust in each generation. A good deal can be achieved in this way. Much has been achieved in the last hundred years. More could be achieved by our own generation. There are many pressing problems which we might solve, at least partially, such as helping the weak and the sick, and those who suffer under oppression and injustice; stamping out unemployment; equalizing opportunities; and preventing international crime, such as blackmail and war instigated by men like gods, by omnipotent and omniscient leaders. All this we might achieve if only we could give up dreaming about distant ideals and fighting over our Utopian blueprints for a new world and a new man.
Losing faith in a belief system that once gave my life meaning was extremely painful. But the experience also reawakened my dormant intellectual curiosity and allowed me to think about the world anew, unencumbered by the circumscriptions of doctrine. I have met new people, read new writers and thinkers, and explored new ideas I had previously taken care to avoid. After reading an interview I had given to one of my publishers a year ago, I was forwarded an email by the poet David Chorlton. What I’d said in that interview, he wrote, “goes beyond our current disease of taking sides and inflexible non-thinking. I’m reading Havel speeches again, all in the light of the collective failure to live up to the post-communist opportunities. We’re suffering from a lack of objectivity—is that because everyone wants an identity more than a solution to problems?”

Clifton Ross writes occasionally for Caracas Chronicles, sporadically blogs at his website, www.cliftonross.com and sometimes even tweets @Clifross
Note:
1 Considerable confusion surrounds the definitions of “socialism” and “capitalism.” Here, I am using “socialism” to mean a system in which the state destroys the market and takes control of all capital, as well as the production and distribution of goods and services. I am using “capitalism” here to refer to a market economy in which the state, as a disinterested party, or a “referee,” sets guidelines for markets but allows private actors to own and use capital to produce and distribute goods and services.

Sunday, February 3, 2019

Military Defections from Maduro Begin, Air Force General Changes Sides

from the Washington Post
On Saturday morning, just before massive pro-opposition demonstrations were set to take place across Venezuela, a high-ranking military officer published a surprising YouTube video.

Dressed in uniform, acting Venezuelan air force Gen. Francisco Yanez looked at the camera and announced he was throwing his support behind Juan Guaidó, the 35-year-old head of the opposition-controlled National Assembly who declared himself interim president last month.

[Venezuela’s opposition leader calls for ‘unstoppable’ wave against Maduro amid huge opposition marches]

Political chaos has erupted since Guaidó’s announcement, but the Venezuelan military has stood by President Nicolás Maduro, who took office in 2013. But in the video, Yanez claims that “90 percent of the armed forces are not with the dictator.”

Yanez is now the highest ranking military official to defect from Maduro’s side to Guaidó’s, raising questions as to whether he is an outlier or if others will follow his lead. Last month, Col. José Luis Silva, the defense attache at the Venezuelan Embassy in Washington, also declared his support for Guaidó.

The United States and a number of other countries have backed Guaidó, and Sen. Marco Rubio (R-Fla.), has been outspoken in his support for the opposition leader. On Saturday Rubio tweeted the video of Yanez, claiming that at least seven “other high ranking officers want to do the same but are still in fear.”

He also tweeted a video saying the national police “refuses to repress marchers. Watch as at least one [officer] hugs one of the marchers,” he wrote. “This is why Maduro is using those death squads. The police, national guard & military rank & file will not attack their families & neighbors.”

Venezuela has been in crisis for much of Maduro’s time in office, as hyperinflation made the prices of food and medicine soar, prompting a humanitarian crisis and an exodus of Venezuelans. Despite the chaos at home, Maduro won reelection in a widely contested vote last May, which Vice President Pence called “a sham."

In the video published Saturday, Yanez claims Maduro is prepared to flee the country, and then urges him to consider doing so.

“The transition to democracy is imminent,” he said. “The people have already suffered enough."

The Venezuelan air force’s Twitter account responded to the YouTube video by publishing an image of it — edited to include the word “traitor” on Yanez’s face. “We have to highlight that he has no command over troops and less so over air force units,” the account wrote. “He has no leadership at the air force and was only serving planning functions.”

Yanez verified to the Associated Press in a phone call on Saturday that it is he who appears in the video and that he would not make further comments on his views until Guaidó, whom he called “the commander in chief of the legal armed force,” gave him the go-ahead to do so.

On Saturday, national security adviser John Bolton tweeted that the United States “calls on all military members to follow General Yanez’s lead, and to protect the peaceful protestors supporting democracy.”

He also wrote that the Venezuelan military should “stand on the side of the Venezuelan people.”

Rival protests took place in Venezuela on Saturday, with Maduro’s supporters joining him for a celebration that marked 20 years since his predecessor, Hugo Chávez, took power. Much larger crowds appeared to take to the streets in opposition protests throughout the country, with estimates that crowds could be in the hundreds of thousands.

“The military and the world take note: There are many, many people filling the streets of Venezuela today,” Guaidó said in a speech addressing a crowd that supports him. “This movement is historic and unstoppable.” He also urged more of the military to defect, telling them to “get on the side of the Venezuelan people.”