Friday, December 15, 2017
LIMA, Peru — It is 8 a.m. and the line of Venezuelan refugees outside the Interpol office already stretches to the end of the block.
Most have just arrived in Lima with not much more than the clothes on their back and are here applying for a certificate to show they have no criminal record, a requirement for a work permit in Peru.
“Leaving was tough, but staying would have been tougher,” said Andrea Sequiera, 29, as she waits at the back of the line with her husband Luis, 31, and 8-year-old son Fabian. ”We know lots of people who would like to get out of Venezuela but can’t afford the ticket.”
Although Venezuelans for years have been fleeing the “socialist revolution” first launched by the late Hugo Chávez in 1999, in recent months the trickle has turned into a flood as living conditions become ever more dire — from hyperinflation to acute shortages of food and medicine to one of the worst homicide rates in the world.
n response to protests over the once-wealthy country's seeming demise, President Nicolás Maduro’s increasingly authoritarian regime has cracked down on opponents, making prospects for improved times less and less likely.
While many exiles had fled to the United States, surging numbers, like the Sequieras, now head to other Latin American nations. The change probably stems from President Trump’s tough anti-immigration stance and the fact that fewer Venezuelans can afford the airfare.
From Mexico to Argentina, immigration agencies are reporting skyrocketing numbers of Venezuelan arrivals, doubling and even tripling the total for previous years.
The Sequieras have been in Lima just four days, after a grueling six-day bus trip from their native Valencia, Venezuela’s third-largest city. They rented a small room in a gritty eastern suburb and are now looking to start a new life in Peru.
The Sequieras became desperate as their wages became increasingly worthless — Andrea’s pay as a human resources coordinator and her husband's at Empresas Polar, Venezuela’s largest food and beverage company. “The worst thing is not being able to feed him,” she said nodding toward their son.
The final straw came when a tire on their car ruptured beyond repair and they couldn't find a replacement, making the vehicle useless — in the nation with the world’s largest proven oil reserves. Then the couple spent five days searching in vain for an antibiotic to treat a boil on young Fabian’s arm.
Peru introduced a special temporary visa in February to address the growing humanitarian crisis in Venezuela. Nearly 30,000 Venezuelans have applied so far for the visa, which includes a temporary work permit.
The exodus from Venezuela has caused tension in some Latin American countries. In Panama, the flood of citizens from the much larger neighbor now competing for jobs has stoked nationalistic sentiment, said Harold Trinkunas, an international security expert at Stanford University who grew up in Venezuela. Panama responded by tightening visa requirements.
Other countries have coped better, particularly Colombia, which has called on its extensive refugee system, originally created to help those displaced from its civil war that recently ended.
Another change is that most Venezuelan immigrants are now simply looking to survive, instead of wanting to send money back home to support family members, said Garrinzon González, who runs the Venezuelan Union in Peru, a self-help group for immigrants in Lima that has nearly 20,000 Facebook followers.
“There’s nothing to buy in the shops in Venezuela now anyway,” he said. “Here you can have a roof over your head and stable work very quickly after you arrive.”
The Venezuelan diaspora is estimated to be about 1.1 million — more than 4% of the population — although the country long ago stopped publishing official numbers. Many hope to return to Venezuela and help their homeland recover once there is a political transition. They don't know when that might happen, and the longer they stay abroad, the more they put down roots.
“I want to go back and help lift my country up again, but I am at an age where I want to be established and have a family,” said Patricia Acosta, 38, an MBA who arrived in Peru in April and now consults for the Spanish telecom giant Telefónica. “This really hurts. Venezuelans don’t have a culture of emigration. The expectation is that grandparents will see their grandkids growing up.”
That may hinder Venezuela’s recovery, because most emigrants are university-educated professionals who play a vital role in the economy. “Venezuela’s brain drain is a brain gain for its neighbors,” Trinkunas said.
The Sequieras are not even thinking that far ahead. Their priority is to sort out their papers, find work, rent an apartment and get Fabian back to school as quickly as possible.
“We want to make friends and have a good life here,” Andrea Sequiera said. “We would like to go back, but right now we are focused on just rebuilding our lives.”
Tuesday, December 12, 2017
Wednesday, November 15, 2017
Milton Friedman once joked that if you put the government in charge of the Sahara Desert in five years there would be a shortage of sand. He could have been talking about Venezuela and its oil wealth. But it is no joke.
On Monday Caracas missed interest payments due on two government bonds and one bond issued by the state-owned oil monopoly known by its Spanish initials PdVSA. Venezuela owed creditors $280 million, which it couldn’t manage even after a 30-day grace period.
Venezuela is broke, which takes some doing. For much of the second half of the 20th century, a gusher of oil exports made dollars abundant in Venezuela and the country imported the finest of everything. There were rough patches in the 1980s and 1990s, but by 2001 Venezuela was the richest country in South America.
Then in 2005 the socialist Hugo Chávez declared that the central bank had “excessive reserves.” He mandated that the executive take the excess from the bank without compensation. Today the central bank has at best $1 billion in reserves.
Falling oil prices are partly to blame, but the main problem is that chavismo has strangled entrepreneurship. Faced with expropriation, hyperinflation, price controls and rampant corruption, human and monetary capital has fled Venezuela.
As of Tuesday evening, the Investment Swaps and Derivatives Association still had not declared Venezuela in default. That matters because this will trigger the insurance obligations inherent in the credit default swaps. But S&P Global Ratings declared the country in default Monday. On Tuesday morning the Luxembourg Stock Exchange issued a suspension notice for the bonds with missed payments.
President Nicolás Maduro has formed a commission to restructure up to $150 billion of the debt and put Vice President Tareck El Aissami —who is under U.S. sanctions for drug trafficking—in charge. Mr. El Aissami called a meeting of creditors on Monday in Caracas, which most bondholders did not attend. Press reports said Mr. El Aissami delivered a monologue on Venezuela’s intention to pay and took no questions. He argued that Trump Administration sanctions make it difficult for the dictatorship to arrange refinancing.
The real problem is that restructuring assumes the country can grow again. That’s nearly impossible without a change in policy that will free the economy.
If Caracas doesn’t find a way to settle with bondholders, they will soon ask authorities to seize Venezuelan assets such as oil shipments at sea and Citgo facilities in the U.S. Such are the wages of socialism.
Tuesday, November 14, 2017
The agency is downgrading Venezuela's sovereign debt grade to "selective default".
It means Caracas skipped a specific bond payment but remains committed to paying off its international debts.
And in a further blow to President Nicolas Maduro's debt-ridden socialist government S&P said: "There is a one-in-two chance that Venezuela could default again within the next three months."
The ratings agency said the nation failed to make $200 million in coupon payments within the allowed 30-day grace period for bonds due 2019 and 2024.
S&P said Venezuela could again miss a payment on its outstanding debt obligations or advance a distressed debt exchange operation, equivalent to default, within the next three months.
Venezuelan sovereign debt was mainly a touch firmer but some PDVSA bonds fell further, with the 2035 bond down 1.2 cents, the 2027 bond down 1.4 cents and the 2021 issue down 1.5 cents.
Industry body ISDA said it would reconvene on Tuesday to discuss whether PDVSA had triggered a credit default event through a late payment of its 2017N bonds.
It comes after Venezuela gave creditors chocolates instead of firm proposals in a desperate ploy as the country teeters on the edge of financial collapse.
Yesterday the socialist government offered the sweet treats during a brief meeting in Caracas but left investors without a clear understanding of the government's strategy to renegotiate $60 billion in debt.
President Maduro confused investors this month with a vow to continue paying Venezuela's crippling debt, while also seeking to restructure and refinance it.
Monday's short and confused meeting, attended by senior Venezuelan officials blacklisted by the United States, gave no clarity on how Mr Maduro would carry out his plan, bondholders and their representatives who participated said afterwards.
One bondholder, leaving the meeting that lasted a little over half an hour at the 'White Palace', departing with a colourful gift-bag containing Venezuelan chocolates and coffee, said: "There was no offer, no terms, no strategy, nothing."
Russia, China, Egypt and Bolivia boycotted an informal public United Nations Security Council meeting on Venezuela on Monday organised by the United States, saying the 15-member body should not be involved in the situation.
"The issue is about meddling with the internal domestic affairs of Venezuela," Russian UN Ambassador Vassily Nebenzia told reporters, adding he hoped the country could settle its issues peacefully without any external interference.
US Ambassador to the UN Nikki Haley told the meeting: "The fact that the (Venezuelan) government would go so far as to try and get people not to show up to a meeting is guilt. And that's unfortunate.
"We received pressure from regional partners not to have this meeting. This goal is not to degrade anyone. This is not to humiliate a region. This is only to lift up the region."
Uruguay's Deputy UN Ambassador Luis Bermudez attended the UN meeting, but said his country did not believe the situation in Venezuela was a threat to international peace and security.
Venezuela's UN Ambassador Rafael Dario Ramirez spoke to reporters as the meeting was being held, flanked by Nebenzia, Chinese Deputy UN Ambassador Wu Haitao and Bolivian UN Ambassador Sacha Sergio Llorentty Soliz.
Mr Ramirez said: "The meeting is a hostile and clearly interfering act of the United States that undermines the principle of sovereignty of a member state of the UN. We condemn this act of political manipulation."
Venezuela is suffering from a harsh economic crisis and President Maduro's government has clamped down on the opposition, jailing or otherwise barring from office many dissenting leaders and activists.
Dozens of people have died in violence since the opposition began a sustained wave of protests in April. Met by rubber bullets, water cannon and tear gas fired by the National Guard, the protesters say the crisis demands an early presidential election that they are sure Mr Maduro would lose.
His popularity has been pounded lower by triple-digit inflation and acute food and medicine shortages.
European Union foreign ministers approved economic sanctions, including an arms embargo, on Venezuela on Monday, saying regional elections last month marred by reported irregularities had deepened the country's crisis.
The United States has also imposed targeted sanctions on top Venezuelan officials.
Anxious not to push Caracas any closer to economic and political collapse as debt restructuring talks begin, EU governments held back from targeting any individuals.
The bloc instead left names for a later stage to try to persuade President Maduro to calm the situation.
Spain's Foreign Minister Alfonso Dastis told reporters at a meeting with his counterparts where the sanctions decision was made: "Everything we do is aimed at seeking dialogue between the government and the opposition to find a democratic and peaceful solution."
Venezuelan opposition leaders said last week they would resume efforts to hold a dialogue with President Maduro, even though they say he previously used such talks to stall for time instead of implementing serious reform.
Over the weekend, President Maduro had termed imminent sanctions by the bloc as "stupid."
Monday, October 23, 2017
Venezuelans are screwed but happy,” President Nicolás Maduro chortled this month. State elections last weekend show he was half-right. The economy is in freefall, there are acute shortages of medicine and food, inflation is almost 1,000 per cent and homicide rates have soared.
Before Sunday’s vote the government — steward of this mess — had at best a 30 per cent approval rating. Improbably, though, the ruling socialist party won 17 of 23 governorships up for grabs.
“Fraud” cried the opposition.
“Another victory!” Mr Maduro proclaimed. Whatever the case, the vote’s lasting results will be pernicious: greater polarisation; radicalisation; more international isolation; an even weaker economy; and, as the country’s problems fester, a greater risk of civil war.
There is a still a way out of this mess. Venezuela is not Syria or North Korea. It does not suffer from sectarian violence; nor does it have nuclear arms. Rather, the regime in Caracas is more akin to a group of mafia mobsters that has run out of options. The amounts they have looted are breathtaking: as much as $300bn, according to disaffected former ministers. A negotiated transition, perhaps with selective amnesties, is still possible. Indeed, although distasteful, it is the only real and lasting option for the country. The question is how best to get there?
The politics are the hardest part. The regime has dug in. It has cynically used past mediation efforts — led, among others, by the Vatican — to pretend to talk. One problem is that, although the country’s situation is dire, it is not yet catastrophic for Mr Maduro and his cronies. Presently, their incentive to negotiate is low. This needs to change.
To this end, targeted sanctions by Washington have frozen the US assets of corrupt officials. This has pressured regime members without harming the broader populace. Latin America has also begun to do its bit. In August, 12 of the region’s biggest countries, including Brazil and Mexico, said they would not recognise the all-powerful constituent assembly installed by Mr Maduro, nor any of its laws.
Now the EU needs to follow suit. The aim should be a package of sanctions that is conditional on the country holding free, fair and internationally monitored presidential elections in 2018. That is what the constitution stipulates. Disclosure by banks of financial information on public officials who have stashed stolen funds abroad would be a good place to start. For one, it would expose the sham of “Bolivarian socialism” and undercut government support.
The economics of a transition would be only slightly less complex. Encouragingly, the International Monetary Fund has begun to ponder this eventuality, as the Financial Times revealed this week. Venezuela’s external financing needs will probably amount to upwards of $30bn a year. Such a large programme would test the IMF’s funding rules, as in Greece and Ukraine. It would require a write-off of an estimated $140bn of foreign debt. Adding to the complexity will be Russia and China, both major Venezuelan creditors, IMF shareholders and sometime Caracas allies. Their role will be crucial.
Of course, the international community is not going to provide large sums of money unless it is accompanied by a fresh government with broad consensus on required economic policies. That day will come. When it does, Venezuela will be able to borrow from the IMF at 2 per cent, instead of the extortionate 48 per cent lending rate Caracas has used of late. Consumption will rise. Austerity will lift. Venezuelans will no longer be so screwed, and much happier.
Wednesday, September 27, 2017
Tuesday, September 19, 2017
Tuesday, August 29, 2017
Venezuela is considering banning messages that promote “hate” and “intolerance” on social media and messenger services, according to Delcy Rodriguez, the president of the country’s all-powerful constituent assembly.
Rodriguez told reporters on Monday that the South American nation is looking to limit messages that fuel bigotry and confrontation between Venezuelans in a so-called anti-hate law, which is currently being debated by the legislative super body, known as the constituyente.
“We’re going to regulate and control because, in recent years, Venezuela has been victim of laboratories of physiological war that, through messages and social medial, promote a fratricidal war between Venezuelans,” Rodriguez said. “We’re not going to allow what happened in Rwanda repeat itself in Venezuela.”
Rodriguez didn’t provide details on how the government plans to monitor social media and on penalties for offenders. The new assembly will meet again tomorrow.
The anti-hate law comes as the government of President Nicolas Maduro has intensified a clampdown on the media, blocking the transmission of Colombian networks Caracol and RCV last week. Like his predecessor, the late Hugo Chavez, Maduro alleges that private media providers are conspiring with his political foes to undermine his socialist government.
Since April, a wave of protests against Maduro’s government has claimed dozens of lives and left hundreds behind bars. In a bid to consolidate power amid a crippling recession, Maduro installed the consituyente earlier this month with the mandate to rewrite the country’s constitution. The new legislative body has since bypassed the opposition-led congress and has been targeting the last strongholds of dissent in public institutions.
Rodriguez singled out a growing practice among Venezuelan expats of publicly heckling top-ranking government officials on trips outside of the country. The practice, known locally as escrache, is filmed on smart phones and is wildly shared on services like Instagram, Twitter and WhatsApp. In one recent escrache video, Caracas Mayor Jorge Rodriguez, who is the brother of the constituyente president, was filmed while being jeered during a trip to Mexico City.
Rodriguez said the practice fuels bloodshed and needed to be curbed.
“It starts by banging pots and pans around chavistas in a restaurant,” she said of supporters of Chavez’s self-styled brand of socialism, “And its finishes by burning chavistas alive.”
Friday, August 18, 2017
CARACAS (Reuters) - Venezuela's new legislative superbody on Friday gave itself the power to pass laws, superseding the opposition-led congress and fueling criticism by government adversaries that socialist President Nicolas Maduro is consolidating a dictatorship.
In practice, the move does little to change the existing situation. The Socialist-dominated Supreme Court has stripped power from the congress and shot down nearly every law it has approved since it was taken over by the opposition in 2016.
But the decision suggests the constituent assembly, elected in July in a vote boycotted by the opposition, is more interested in limiting the opposition's influence than carrying out its official task of rewriting the nation's constitution.
Delcy Rodriguez, a Maduro ally and president of the constituent assembly, insisted the move did not imply a dissolution of the congress.
"Those lazy bums have to work. What we are doing is telling them 'Gentlemen, we are not going to let you take a holiday,'" Rodriguez said in a reference to opposition legislators.
The assembly had invited leaders of the existing congress to join the session. Congressional leaders did not attend, insisting it was fraudulently created and usurped their powers.
"(Congress) only obeys the constitution and the people. We do not recognize the constituent assembly, much less subordinate ourselves to it," Freddy Guevara, an opposition politician and vice president of the congress, wrote on Twitter.
Maduro pushed for the creation of the constituent assembly on promises it would bring peace to the country after months of violent street protests that have killed more than 125 people.
Critics say the constituent assembly was created to extend the rule of the Socialists, who face anger across the country over chronic food shortages, triple-digit inflation and a severe recession.
Protests have slowed since the July 30 election, partly because opposition leaders are in talks to present candidates for the gubernatorial elections expected in October. Many opposition supporters are also tired and demoralized.
Governments around the world have slammed the creation of the constituent assembly, with many accusing Maduro of seeking to ignore the will of Venezuelans who want a change of government.
The United States has slapped sanctions on top Socialist Party officials, accusing them, among other things, of weakening democracy and violating human rights. Washington has said it will consider sanctions against anyone who participates in the constituent assembly.
Monday, August 14, 2017
Thursday, August 10, 2017
Airlines are continuing to pull out of Venezuela, and this time it’s not just about trapped cash but a whole series of grievances including staff held up at gun point, luggage theft, poor runway maintenance and low quality jet fuel.
United Airlines, Avianca and Delta Air Lines have either stopped flying to Venezuela or said they would leave the country, while three others canceled flights on specific days as the nation descends into chaos. Colombia’s pilots’ association says its members who have flown to Venezuela have had to deal with contaminated fuel and hours-long delays as the National Guard pulls suitcases off flights to loot them. This week, videos showed an apparent assassination of a man at the check-in desk of a local airline at the airport.
“Everything that’s part of the airport’s infrastructure started to get degraded,” Julian Pinzon, the head of security and technical issues at Colombian pilot association Acdac, said. “We started seeing problems in the runway, problems in the aircraft taxiway, problems with the airport’s electricity supply, in the fuel distribution trucks.”
The current round of carrier defections comes after routes had stabilized from the previous exodus triggered by the government’s halt of dollar payments, and leaves Venezuelans increasingly cut off from the rest of the world. A flight to Miami in coach class can cost about $1,000, in a country where the monthly minimum wage is about $20 at the black market rate.
The nation’s social and economic implosion has turned tasks as simple as busing flight crew to hotels into logistical challenges. Staff who once stayed overnight in Caracas, which is about a 45-minute drive away, took to sleeping in hotels near the airport to avoid the bandit-ridden highway. Even then, they’d get attacked, minutes outside the airport perimeter. Some carriers took to flying crew to spend the night in neighboring countries.
Avianca hired bodyguards after shots were fired during a robbery of a bus carrying its crew. Although no one was injured, it wasn’t enough to calm nerves, and the overnight route was eventually canceled, according to Acdac.
Traffic in and out of Caracas dropped 40 percent in 2014 after cash piled up from local sales that couldn’t be repatriated – there’s still $3.8 billion that never made it out, according to international airline association IATA. The airlines that stuck it out were able to pay off local costs and fuel with bolivars – until Venezuela changed that rule, requiring payment in dollars.
Some carriers are refusing to throw in the towel. American Airlines, which still flies to Caracas and Maracaibo, said in a reply to emailed questions that it would not operate at any airport that didn’t meet the highest standards safety and security. Panama’s Copa Airlines, which flies to Caracas and two other Venezuelan cities, said it’s been able to overcome operational challenges and continues to monitor conditions in the country.
Venezuela’s aviation authority Inac said it didn’t have an official spokesperson who could talk about the sector. The U.N.’s International Civil Aviation Organization said that when it last visited Venezuela four years ago, the country delivered “exemplary results.”
Flights have found Venezuelan jet fuel to be contaminated due to poor conditions in distribution trucks and storage tanks, according to the Acdac. Planes that fill their tanks with the fuel sometimes require lengthy maintenance, the association said.
“You don’t have the guarantee anymore that the fuel they’re putting on board isn’t contaminated,” Pinzon, the head of safety and technical issues at Acdac, said. “The engines that are getting that gas aren’t going to stop, but the internal system will start to degrade and the filters will start getting blocked up, or damaged.”
The official reasons for leaving have been varied. United said its Venezuela route wasn’t meeting financial expectations, while Avianca cited operational issues without providing too many details. Aerolineas Argentinas said it wants to continue flying to Caracas, but first needs reassurance that it would be viable and secure. After dropping off passengers from its its weekly Buenos Aires to Caracas flight, the airline takes its crew on to Bogota, rather than have them spend the night in Caracas. They return to Venezuela for the return leg the following morning.
Complaints about operational issues to Venezuelan authorities have been falling on deaf ears, according to Peter Cerda, IATA’s regional vice president for the Americas.
“It’s quite unfortunate, the airlines have done everything possible to maintain Venezuela connected to the rest of the world,” he said. “It’s more of a challenge every day.”
Wednesday, August 9, 2017
CARACAS, Venezuela (AP) -- The new constitutional assembly assumed even more power in Venezuela by declaring itself as the superior body to all other governmental institutions, including the opposition-controlled congress.
That decree came Tuesday just hours after the assembly delegates took control of a legislative chamber and put up pictures of the late President Hugo Chavez, who installed Venezuela's socialist system.
Delcy Rodriguez, the head of the ruling socialist party and leader of the body, said the unanimously approved decree prohibits lawmakers in congress from taking any action that would interfere with laws passed by the newly installed constitutional assembly.
"We are not threatening anyone," said Aristobulo Isturiz, the constitutional assembly's first vice president. "We are looking for ways to coexist."
Leaders of congress, which previously voted not to recognize any of the new super-body's decrees, said lawmakers would try to meet in the gold-domed legislative palace Wednesday, but there were questions whether security officers guarding the building would let them in.
The opposition to President Nicolas Maduro also faced another fight Wednesday before the government-stacked Supreme Court, which scheduled a hearing on charges against a Caracas-area opposition mayor. The judges convicted another mayor Tuesday for failing to move against protesters during four months of political unrest.
In calling the July 30 election for the constitutional assembly, Maduro said a new constitution would help resolve the nation's political standoff, but opposition leaders view it is a power grab and the president's allies have said they will go after his opponents. Before its decree declaring itself all-powerful, the assembly ousted Venezuela's outspoken chief prosecutor, established a "truth commission" expected to target Maduro's foes and pledged "support and solidarity" with the unpopular president.
The latest surge of protests began in early April in reaction to a quickly rescinded attempt by the government-supporting Supreme Court to strip the National Assembly of its powers. But the unrest ballooned into a widespread movement fed by anger over Venezuela's triple-digest inflation, shortages of food and medicine, and high crime.
Opposition lawmakers said security forces led by Rodriguez broke into the congress building late Monday and seized control of an unused, ceremonial chamber almost identical to the one where lawmakers meet.
"This government invades the spaces that it is not capable of legitimately winning," Stalin Gonzalez, an opposition lawmaker, wrote on Twitter, alluding to the opposition's overwhelming victory in the 2015 congressional elections.
Before the assembly met Tuesday, the pro-government Supreme Court sentenced a Caracas-area mayor to 15 months in prison for not following an order to remove barricades set up during anti-government demonstrations.
Ramon Muchacho was the fourth opposition mayor ordered arrested by the high court the past two weeks. His whereabouts were not known, but he denounced the ruling on Twitter.
The constitutional assembly's meeting Tuesday came amid mounting criticism from foreign governments that have refused to recognize the new body.
The foreign ministers of 17 Western Hemisphere nations met in Peru to discuss how to force Maduro to back down. The ministers issued a statement after the meeting condemning the body and reiterating previous calls for the parties in Venezuela to negotiate on ending the political crisis.
Meanwhile, leaders from the Bolivarian Alliance, a leftist coalition of 11 Latin American nations, met in Caracas and declared the creation of the constitutional assembly a "sovereign act" aimed at helping Venezuela overcome its difficulties.
"We reiterate the call for a constructive and respectful dialogue," the alliance said in a statement read after the meeting.
Since the disputed election, security forces have stepped up their presence. A U.N. human rights commissioner report issued Tuesday warned of "widespread and systematic use" of excessive force, arbitrary detention and other rights violations against demonstrators.
Only a few dozen demonstrators heeded the opposition's call to set up traffic-snarling roadblocks in Caracas on Tuesday to show opposition to the new assembly, underlining the fear and resignation among that has weakened turnout for street protests that once drew hundreds of thousands. At least 124 people have been killed and hundreds injured or detained during the protests.
Tuesday, August 8, 2017
Sunday, August 6, 2017
Friday, August 4, 2017
CARACAS (AFP) -
Venezuela's money, the bolivar, is sinking faster and faster under an intensifying political and economic crisis that has left citizens destitute and increasingly desperate.
Its depreciation accelerated this week, after a disputed vote electing an all-powerful "Constituent Assembly" filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.
On Thursday alone, the bolivar slumped nearly 15 percent on the black market, to be worth 17,000 to one US dollar.
In a year, the currency has lost 94 percent.
The decline has been dizzying -- yet largely ignored by the government, which uses an official rate fixed weekly that is currently 2,870 to the dollar.
Ordinary Venezuelans, however, refer only to the black market rate they have access to, which they call the "dolar negro," or "black dollar."
"Every time the black dollar goes up, you're poorer," resignedly said Juan Zabala, an executive in a reinsurance business in Caracas.
- Salaries decimated -
His salary is 800,000 bolivares per month. On Thursday, that was worth $47 at the parallel rate. A year ago, it was $200.
The inexorable dive of the money was one of the most-discussed signs of the "uncertainty" created by the appointment of the Constituent Assembly, which starts work Friday.
As a result, those Venezuelans who are able to are hoarding dollars.
"People are protecting the little they have left," an economics expert, Asdrubal Oliveros of the Ecoanalitica firm, told AFP.
But Zabala -- who is considered comparatively well-off -- and other Venezuelans struggling with their evaporating money said they now spent all they earned on food. A kilo (two pounds) of rice, for instance, cost 17,000 bolivares.
The crisis biting into Venezuela since 2014 came from a slide in the global prices for oil -- exports of which account for 96 percent of its revenues.
The government has sought to monopolize dollars in the country through strict currency controls that have been in place for the past 14 years. Access to them have become restricted for the private sector, with the consequence that food, medicines and basic items -- all imported -- have become scarce.
According to the International Monetary Fund, inflation in Venezuela is expected to soar above 700 percent this year.
In June, Maduro tried to clamp down on the black market trade in dollars through auctions of greenbacks at the weekly fixed rate, known as Dicom. There is also another official rate, of 10 bolivars per dollar, reserved for food and medicine imports.
"Things are going up in price faster than salaries," noted Zabala, who spends 10 percent of his income on diabetes treatment, when he can.
- 'No limit' -
Maduro has vowed that a new constitution the Constituent Assembly is tasked with writing will wean Venezuela off its oil dependency and restart industry, which is operating at only 30 percent of capacity.
But the president, who links the "black dollar" with an "economic war" allegedly waged by the opposition in collaboration with the US, has not given details on what would be implemented.
On Thursday, Maduro promised "speculators" setting their prices in line with "the terrorist criminal dollar in Miami" would go to jail.
For the past four months, Maduro has been the target of protests which have been forcefully confronted by security units, resulting in a toll of more than 125 deaths.
The opposition says the new Constituent Assembly is an effort to create a "dictatorship" along the lines of Communist Cuba.
Against that backdrop of tensions, "there is no limit on how far the black dollar can go," according to Ecoanalitica.
But a director of the firm, Henkel Garcia said he believed the current black market rate "didn't make sense" and he noted that in the past currency declines weren't linear.
Oliveros said increased printing of bolivares by the government was partly the reason for the black dollar's rise.
"When you inject bolivares into the market, that means that companies, individuals go looking for dollars, which are scarce," he said, estimating that the shortfall of dollars this year was some $11 billion.
The horizon is darkened further with big debt repayments Venezuela has to make, for instance $3.4 billion the state oil company PDVSA has to reimburse in October. That debt is denominated in dollars.
Thursday, August 3, 2017
Tuesday, August 1, 2017
Forget all you’ve heard about dialogue in Venezuela between the regime and the opposition. Hungry, hurting Venezuelans are done talking. The country is in the early stages of civil war. Sunday’s Cuban-managed electoral power play was the latest provocation.
In my column two weeks ago, “How Cuba Runs Venezuela,” I failed to mention Havana’s 2005 takeover of the Venezuelan office that issues national identity cards and passports. It was a Castro-intelligence coup, carried out with then-President Hugo Chávez’s permission. The move handed Havana the national Rolodex necessary to spy on Venezuelans and surreptitiously colonize the country. Islamic extremists received Venezuelan passports to give them false cover when crossing borders. Regime supporters got the papers they need to vote under more than one identity.
This is something to keep in mind when Venezuelan strongman Nicolás Maduro reports the results of Sunday’s election for representatives to draft a new constitution. In polls, some 80% of Venezuelans oppose Mr. Maduro’s “constituent assembly.” But the opposition boycotted Sunday’s election because they know Cuba is running things, that voter rolls are corrupted, and that there is no transparency in the operation of electronic voting machines.
Opposition leaders in Caracas are still trying to use peaceful means to unseat Mr. Maduro. Last week they orchestrated an effective 48-hour national strike and on Friday another day of demonstrations.
But grass-roots faith and hope in a peaceful solution has been lost. One symptom of this desperation is the mass exodus under way. On Tuesday the Panam Post reported that “more than 26,000 people crossed the border into Colombia Monday, July 26, according to the National Director of Migration in [the Colombian city of] Cúcuta.”
Venezuelan applications for asylum in the U.S. were up 160% last year, making Venezuelans No. 1 among asylum seekers to the U.S. According to the United Nations Refugee Agency, there were 27,000 Venezuelan asylum seekers world-wide in 2016. By mid-July this year there were already 50,000.
Last week the National Guard arrested and badly beat violinist Wuilly Arteaga, who has become a national symbol of peace. Many of those fleeing say they fear that after Sunday the regime crackdown will intensify. Some of those staying behind have already begun to launch counteroffensives. This provides the regime an excuse for increasing repression, yet there is a growing sense that violence is the only remaining option.
The regime has the armored vehicles, the high-powered rifles, and the SWAT gear. But the population has the numbers and the anger. It also may increasingly have support from dissident government forces.
Consider what happened in the municipality of Mario Briceño Iragorry in the state of Aragua earlier this month, when the pro-government mayor and the regime’s paramilitary, known as colectivos, began looting shops that were closed during a one-day national strike.
Eyewitness testimonies sent to me by a source in Caracas describe how townspeople tried to defend the shops. The mayor brought in paramilitary reinforcements. But the town was saved when the judicial police arrived from the state capital of Maracay. According to the Venezuelan daily El Nacional, they arrested the mayor, who was armed, and “many” colectivos.
The judicial police, who number around 12,000 and conduct criminal investigations, are Venezuela’s largest national police agency. They are also responsible for protecting Attorney General Luisa Ortega Díaz. Ms. Ortega broke with the regime in March when the Maduro-controlled Supreme Court tried to dissolve the opposition-controlled legislature. She is an outspoken critic of Mr. Maduro’s constituent assembly. She has not been arrested, probably because the regime doesn’t want to confront the judicial police.
There are also dissident members of the military but their possible role in recovering democracy seems difficult. The leadership is pro-regime and though there are rumors of grumbling among the lower ranks, organizing a coup requires communication. The security and intelligence apparatus installed by Cuba makes that challenging.
But a citizens’ revolt, led by young people whose families are starving, is already under way. Last week after 24-year-old Ender Caldera died from injuries sustained in a demonstration in Timotes, Merida, his friends exacted revenge by intercepting an armored National Guard truck on a mountain road and setting it afire. Numerous other National Guard vehicles have been torched in Caracas.
The state of Barinas, where the late Hugo Chávez was born, was once a regime stronghold. Today it is an antigovernment pressure-cooker where dissidents burn debris in the streets and confront the National Guard. It is the state with the highest number of protest fatalities in the country since the street protests began in April.
Mr. Maduro tried Sunday to put a “democratic” imprimatur on his power grab. But by the afternoon there were at least six dead in clashes with the regime. On the streets of Venezuela, it is now fight or flight.
Monday, July 31, 2017
Sometimes I really hate it when I’m right. The “vote” in Venezuela yesterday went largely as expected, with the government of tyrant Nicolas Maduro claiming that upwards of eight million people voted to essentially wipe out the elected legislature and replace it with some window dressing which essentially makes him dictator of the country. This is a condition which could last for his entire life unless his people manage to find a way to oust him from office.
The vote was, of course, largely a sham. And as NBC News was reporting throughout the day, many of the polling places were frequently empty as Maduro’s many opponents boycotted the bogus proceedings.Many polling stations were largely empty and more than 70 percent of the country was opposed to the vote in the first place, according to opinion surveys. Critics called it a naked power grab by President Nicolas Maduro.Noticing something of a disparity there? Nearly three quarters of the country was opposed to and sitting out the vote according to recent polls. Election monitors put the turnout at 9% (which actually might be on the low side) and yet Maduro’s “election officials” said it was over 40%. Even if that was a valid figure, that’s still pretty low for something this historic in terms of completely reshaping the country’s government structure.
As protesters clashed with police across the increasingly volatile country, only about 9 percent of eligible voters went to the polls, Delsa Solórzano, a prominent leader of the opposition party Un Nuevo Tiempo, said at a news conference Sunday night.
The country’s election authorities, meanwhile, put the number of voters at 8.1 million, equaling a 41.5 percent turnout.
CNN describes just how much power Maduro has now and also grimly notes that the body count went up as even more protesters – including two teenagers – were slaughtered by his militias.The election will allow Maduro to replace Venezuela’s current legislative body — the National Assembly — with the new assembly, which would be made up 545 members, all nominated by his administration.Now the rest of the world has to decide what, if anything, to do about it. As far as the United States goes, our U.N. Ambassador, Nikki Haley immediately declared the vote to be “a sham” and said that the United States “would not accept the results.” Our State Department put out a statement condemning the results as well and promising a “strong and swift response”, though in somewhat gentler terms. But what does that mean? More sanctions? I’m not sure Maduro particularly cares at this point.
Deadly clashes between protesters and police marred Sunday’s vote, which followed weeks of violent street protests in which many people have been killed or injured. On Sunday the death toll rose sharply with at least six people — including two teenagers — killed at protests and a National Guard officer also reported dead by the attorney general’s office.
More than 8,089,000 people or about 41.53% of registered Venezuelan voters cast ballots Sunday, according to Venezuela’s National Electoral Council.
Unless there’s a drastic (and probably violent) change in course, the stage seems to be set. Maduro has completed his takeover and will now be able to rule essentially as a dictator. He’ll probably gather the support of a few other authoritarian regimes, but even that will be limited until he can get his oil production back up. (Assuming he can manage it.) For now, Venezuela will likely become a hermit kingdom, much in the style of either Fidel Castro’s Cuba during the early years or North Korea’s present regime. And the real losers in all of this will be the Venezuelan people. They are currently starving while living on some of the richest farmland on the continent and their government is almost bankrupt while sitting atop some of the largest proven crude oil reserves in the world. These are the fruits of socialism. Watch closely if you are cheering for similar policies in the United States.
from Noticias 24
(Caracas, 30 de julio. Noticias24) – La rectora del Consejo Nacional Electoral Tibisay Lucena ofreció a las 11:47 de la noche de este domingo el primer boletín tras la elección de los miembros de la Asamblea Nacional Constituyente.
Lucena precisó que el órgano electoral contabilizó 8.089.320 votos para alcanzar el 41,53% del padrón electoral.
Asimismo agradeció a los funcionarios que hicieron posible el proceso electoral pese a las dificultades que presentó la jornada en diferentes partes del país dados los focos de violencia.
Friday, July 28, 2017
CARACAS, July 27 (Reuters) - Three people died during clashes on the first day of an opposition-led strike against Venezuela's President Nicolas Maduro, the state prosecutor's office said on Thursday.
At least 106 people have died in total during anti-government unrest convulsing the South American OPEC nation since the opposition launched protests in April demanding elections to end nearly two decades of socialist rule.
Many streets around Venezuela remained barricaded and deserted during the second day of an opposition-led shutdown, which began on Wednesday. The strike aims to to pressure Maduro into cancelling a controversial vote for a new congress at the weekend.
Adversaries say the ruling Socialist Party wants to consolidate dictatorship with a sham vote for the super-congress that will have the power to rewrite the constitution and shut down the existing opposition-led legislature.
Faced also with intense international pressure including the threat of U.S. economic sanctions, Maduro says he is going ahead with Sunday's election for the Constituent Assembly as the only way to empower the people and bring peace to Venezuela.
The Venezuelan prosecutor's office said a 23-year-old man died in western Merida state, while a 16-year-old boy died in the poor Caracas neighborhood of Petare during clashes between security forces and young masked protestors on Wednesday. That added to the previously announced death of a 30-year-old man, also in mountainous Merida state.
Thursday, July 27, 2017
Wednesday, July 26, 2017
Under pressure from growing street protests and threats of U.S. sanctions, Venezuelan President Nicolás Maduro has offered the opposition, in secret negotiations, a 45-day delay of Sunday’s election for a Constitutional Assembly and a proposal to hold presidential elections by the end of next year.
Maduro’s offer requires the legislative National Assembly, controlled by the opposition, to recall the 33 new judges it appointed last week as well as a “cooling down” of the street protests against the government, according to sources familiar with the talks.
Confirmation that the talks were taking place came late Monday night by a message on Twitter by the vice president of the Venezuelan National Assembly, Freddy Guevara, who reported that the former prime minister of Spain, Jose Luis Rodriguez Zapatero, brought the proposal to the residence of opposition leader Leopoldo Lopez, who is under house arrest.
Previously, local media had picked up a story run by Chilean newspaper La Tercera with comments from Rodriguez Zapatero confirming the talks. The former prime minister later denied he talked to the publication, but he did not deny that the meeting with opposition leaders took place.
“As always, Leopoldo asked me to report clearly and directly concerning the meeting that took place in his house and the invocation of a general strike and the ‘Take Over of Caracas,’ ” Guevara said on Twitter.
According to a source in Washington close to the opposition leaders, Maduro is asking the opposition to help him lobby the U.S. government to abstain from slapping new sanctions on the Venezuelan government.
In exchange, Maduro is offering to delay for 45 days the Constitutional Assembly election set for Sunday and to give opposition leaders a chance to participate, said the same source who spoke on condition of anonymity.
The opposition, however, told Rodríguez Zapatero that it remains firm in its demand to cancel outright the Constitutional Assembly vote, according to Guevara’s tweets. More than 7 million Venezuelans voted against the assembly election in a July 16 plebiscite.
The 45-day delay offer was also confirmed by an opposition leader who also asked not to be named.
The source also said that Maduro was also dangling another offer before his adversaries: a proposal to hold presidential elections by the end of next year.
The balloting for the Constitutional Assembly is scheduled for Sunday, using a system that guarantees the government will control the body even though the Maduro government’s popularity now stands at about 10 percent.
The street protests have become a critical stumbling block for Maduro and he has decided to search for some sort of arrangement that would allow him to put off the vote, said Martín Rodil, president of the Venezuelan American Leadership Council.
“The government fell into its own trap. It proposed the Constitutional Assembly with the intention of trapping the opposition, and it wound up falling into its own trap because the opposition is obeying the will of the street and refused to participate,” said Rodil.
“At the end of the day, they found themselves in an untenable position because it’s causing cracks within the armed forces and because they may soon be hit with [U.S.] sanctions,” he added.
Tuesday, July 18, 2017
Caracas (AFP) - Venezuela's opposition called a nationwide strike for Thursday to press President Nicolas Maduro to back off a rewriting of the constitution, ratcheting up tensions after an unofficial vote rejecting Maduro's plan and amid months of deadly protests.
The strike call, issued on Monday, was part of what the opposition called a "final offensive" aimed at forcing Maduro out through early elections before his term ends in 2019.
On Sunday, in an event organized by the opposition, more than a third of Venezuela's 19 million voters rejected Maduro's bid to have a citizens' body called a "Constituent Assembly" elected on July 30 to redraft the constitution.
Several countries lauded the balloting. White House spokesman Sean Spicer said Monday it sent an "unmistakable statement" to Maduro and his government.
The EU's top diplomat, Federica Mogherini, said that Maduro should suspend his plan, or he "risks further polarizing the country and increasing confrontation."
However Maduro and his government, backed by a loyal military, have dug in against the opposition tactics and the international criticism.
Despite growing public anger at food and medicine shortages under a spiralling economic crisis that has fed into the opposition movement, authorities in Caracas portray the efforts against them as illegitimate and the result of interference from the "imperialist" United States.
- 'Escalation' to follow -
"We are calling all the country to take part in a massive and violence-free protest through a nationwide civic strike for 24 hours," said one leader in the opposition coalition, Freddy Guevara.
He said the stoppage was a "mechanism for pressure and to prepare for the definitive escalation to take place next week."
There were fears, however, that the stepped-up confrontation could worsen violence in Venezuela's streets. Since April, when anti-Maduro protests and police pushback turned bloody, 96 people have died.
The opposition set the scene for the strike with its vote Sunday, which it called a "plebiscite" but which the government dismissed as "illegal."
Electoral authorities, who have systematically sided with Maduro against the opposition-controlled legislature, denied authorization for the balloting.
A total of 7.6 million Venezuelans -- at home and abroad -- turned out for Sunday's vote, the opposition said, undermining legitimacy for Maduro's future Constituent Assembly.
Brazil's foreign ministry said in a statement "the high turnout in the plebiscite... was an unmistakable sign the Venezuelan people want democracy quickly restored." It, too, called on Maduro to shelve his Constituent Assembly idea.
- Change wanted -
Venezuela's opposition, invigorated by the voter support and the international reactions, clearly was keen to seize the moment.
"The mandate the people have given us is clear," said Julio Borges, leader of the opposition-controlled National Assembly.
Borges said the vote showed a public desire to see Maduro leave power before his term ends.
Political analyst John Magdaleno told AFP that "there is evidence of a persistent and durable demand for political change."
The result of Sunday's vote may not have been binding, but Venezuela "sent a clear message to the national executive and the world," announced Central University of Venezuela president Cecilia Garcia Arocha, one of several experts who oversaw Sunday's vote.
According to the opposition, the final turnout figure was enough to overturn Maduro's mandate should there be a recall referendum, because it exceeded the 7.5 million votes that put the president in power in 2013.
To lend weight to the vote, a group of former Latin American presidents, including Mexico's Vicente Fox, who was declared "persona non grata" by the government, took part as observers.
But Luis Vicente Leon, head of the polling firm Datanalisis, said the opposition's challenge now was to leverage the vote to "crack" Maduro's stance and "press for negotiations that would give an peaceful chance for change."
The opposition has accused Maduro of driving the country into bankruptcy, and of planning to use the Constituent Assembly to entirely sideline the legislature.
For many ordinary Venezuelans suffering under shortages of basic goods, sky-high inflation and climbing unemployment, the vote was a way of expressing frustration at the president and his policies.
Yet Maduro has insisted his proposed Constituent Assembly is "the only path" to peace and economic recovery. Thus far, he has shown no sign of backing down.
by Enrique Krause and Biodun Iginla, BBC News, Caracas
More than seven million voters have taken part in an opposition-organised referendum in Venezuela, according to academics monitoring the poll.
Voters strongly opposed government plans for a new constituent assembly with the power to scrap the National Assembly and rewrite the constitution.
Venezuela is polarised between backers of President Nicolás Maduro and opponents, who want fresh elections.
A nurse was shot dead while queuing to vote in the capital, Caracas.
Men on motorbikes opened fire, killing 61-year-old Xiomara Soledad Scott, and wounding three others.
The opposition blamed a “paramilitary” gang for the shooting, which prosecutors said they would investigate.
Separately, journalist Luis Olavarrieta was grabbed by what he said were a group of government supporters who robbed and beat him, but he managed to escape.
Friday, July 14, 2017
Thursday, July 13, 2017
Sunday, July 9, 2017
Saturday, July 8, 2017
CARACAS, Venezuela (AP) — Jailed Venezuelan opposition leader Leopoldo Lopez was transferred to house arrest Saturday after spending more than three years behind bars in a military prison.___
The Supreme Court, in a statement, said it had granted Lopez the "humanitarian measures" for health reasons and "serious signs of irregularities" in the handling of the case that it did not specify.
Outside Lopez's house in the capital, Caracas, a few dozen supporters arrived carrying Venezuelan flags to celebrate along with journalists looking for information about whether the transfer may have been part of a larger deal between the opposition and President Nicolas Maduro's government.
The opposition has been demanding the release of dozens of activists it consider political prisoners, the most prominent being Lopez, in order to initiate talks aimed at resolving a political crisis that has left more than 90 people dead and hundreds injured.
"We spoke for like 40 minutes. He's hugging his children, he's with his wife. .... I'm sure they are celebrating," Lopez's father, who shares his son's name, said from exile in Spain. He said in recent days Lopez had been isolated in his prison cell without food and attributed his son's transfer to the considerable international pressure on Maduro's government.
"He told me himself recently: Dad, it's always darkest right before the break of dawn," he added.
Lopez, 46, was sentenced in 2015 to nearly 14 years in prison for inciting violence during anti-government protests in which three people died and dozens were wounded.
Venezuela has been rocked by months of near-daily protests again this year, fueled by widespread discontent over shortages of basic goods, galloping inflation and allegations that Maduro is flouting democratic norms.
Spanish Prime Minister Mariano Rajoy broke the news of Lopez's pre-dawn transfer in a message posted on Twitter. His predecessor, Jose Luiz Rodriguez Zapatero, has been traveling back and forth to Venezuela for months trying to broker a deal on jailed opposition leaders and jumpstart a dialogue between the government and opposition and was in Caracas as recently as last week.
Colombian former President Ernesto Samper, who had been working with Zapatero on some sort of humanitarian release for Lopez, praised the "positive gesture" by the government, predicting it would open a space for dialogue across Venezuela's bitter political divide so that in the coming months there could be transparent, democratic elections.
There has been much speculation about Lopez's since several people, including Florida Sen. Marco Rubio, reported in early May that he had been rushed to a hospital in very serious condition. The report was later denied by the government, which released video of Lopez saying he was alive and well.
But more recently supporters have stepped up complaints that Lopez was being tortured and punished for supporting the street protests against Maduro — claims that the government has denied. Lopez's party said he had not been allowed to see his lawyers for 90 days and had been in solitary confinement for the last 32 days.
Lopez's lawyer in Spain, Javier Cremades, said the terms of Lopez's release mean he will be allowed to serve out his sentence at home and cannot leave.
"It is a gesture of weakness of the Maduro regime and of the opposition's strength," Cremades said. "It is a step forward, and very positive news."
Lawmaker Gaby Arellano of Lopez's Popular Will party said his release represents "the end of the dictatorship."
Foreign governments and human rights groups have criticized Lopez's detention as politically motivated. A Venezuelan prosecutor on the case who later sought asylum in the United States has said he was ordered by the government to arrest Lopez despite a lack of evidence.
Lilian Tintori, Lopez's wife, has campaigned in Venezuela and abroad to try to win freedom for her husband.
In February she met with President Donald Trump in the White House. Trump tweeted a photo of the Oval Office encounter and called for Lopez to be released "immediately."
"It gives us great pleasure that Leopoldo Lopez is at his home with his family!" said Henrique Capriles, another opposition leader, via Twitter. "He must be given his full freedom, like all the political prisoners!"
Thursday, July 6, 2017
Caracas (AFP) - Dozens of pro-government activists stormed into the grounds of Venezuela's National Assembly Wednesday and attacked lawmakers, leaving several hurt and bleeding.
Intruders brandishing sticks and dressed in red broke through the front gate and set off fireworks in the interior gardens of the building, AFP journalists at the scene said.
The government supporters reached as far as the corridors of the congressional building, striking and injuring at least three lawmakers. The attackers ordered journalists to stop filming and taking photographs and leave the premises.
Lawmaker Yajaira de Forero named three of her colleagues who she said were struck, including one who was taken away for medical treatment.
Tension is high in Venezuela after three months of anti-government protests that have seen 91 people killed in clashes with police.
Protesters blame President Nicolas Maduro for a desperate economic crisis. He says the chaos is the result of a US-backed capitalist conspiracy by the opposition.
The opposition-controlled legislature was holding a special session to mark independence day when the government supporters burst in.
Before the violence broke out on Wednesday, Maduro's vice-president Tareck El Aissami had made an impromptu appearance in the congress along with the head of the armed forces, Vladimir Padrino Lopez and ministers.
El Aissami made an address in which he called on supporters of Maduro to come to the legislature to show support for him. A crowd of Maduro supporters held a rally outside the building for several hours before breaking into the grounds.
Maduro retains the public backing of the military high command -- a key factor in keeping him in power, according to analysts.
Sunday, July 2, 2017
Tuesday, June 13, 2017
Anti-government protesters set fire to the supreme court in Caracas, Venezuela, Monday.
This is the twelfth week of upset in the country, as protesters demand the resignation of president Nicolas Maduro and call for elections.
The supreme court Monday voted to reject a motion that would prevent Mr Maduro from rewriting the country's constitution.
Violence broke out in protests at the Supreme Court over a bid to change the constitution, and Venezuela's chief prosecutor said on Monday her family had been threatened and followed by intelligence agents since she split with the government.
Fanned by anger at triple-digit inflation along with shortages of food and medicine, protests have grown smaller but more violent over the past two months, with at least 67 killed and thousands injured.
Luisa Ortega, a former ally of Mr Maduro who has turned against him and the ruling Socialist Party, has questioned his handling of opposition street protests in recent weeks and challenged his plan to rewrite a constitution brought in by late leader Hugo Chavez.
State officials have launched a series of verbal attacks on Ms Ortega, ranging from questioning her sanity to accusing her of promoting violence.
She said she would hold the government responsible if her family was harmed.
Ms Ortega's office said it was investigating the death on Monday of a man called Socrates Salgado, 49, in a coastal town near Caracas. Opposition politicians said he died during a protest.
In April, Ms Ortega successfully challenged a Supreme Court decision to assume the powers of the opposition-controlled legislature, making her the highest official in years to openly break with the ruling party.
She filed a Supreme Court challenge last week to Mr Maduro's plan to elect a legislative super-body known as a constituent assembly, that will have the power to rewrite the constitution and in some cases dissolve state institutions.
The Supreme Court rejected the challenge on Monday.
"The electoral chamber of the Supreme Court of Justice declares that the (challenge) filed by Luisa Ortega Diaz is inadmissible because it is an inept accumulation of pretensions," the court said on Twitter.
In response, Ms Ortega launched another legal challenge, this time claiming that 13 judges appointed to the court in 2015 were put there via an "irregular" process and that they should be replaced.
Police arrested 24 people for their involvement in the daylight attack on a busy office block, which was condemned by Mr Maduro as a terrorist act. Opposition leader Henrique Capriles said it was the work of government agitators.
Outside the Supreme Court headquarters in downtown Caracas, protesters backing Ms Ortega were confronted earlier by government supporters.
Mr Maduro says Venezuela is the victim of an "economic war" that he says can only be addressed by a constituent assembly.
The elections council has set an election for the assembly for July 30. The opposition is refusing to participate in the vote, saying it is rigged in favor of the Socialist Party.
Venezuela Court Sides With Maduro Over Constitutional Rewrite
Amid mounting protests, the court blocked a motion to stop President Nicolas Maduro from instituting legislative changes that favor his government.
from The Atlantic
Amid mounting protests, the court blocked a motion to stop President Nicolas Maduro from instituting legislative changes that favor his government.
Venezuela’s Supreme Court voted Monday to reject a motion that would prohibit the nation’s president, Nicolas Maduro, from rewriting its constitution. The decision comes just days after Venezuela’s chief prosecutor, Luisa Ortega Díaz, stood on the steps of the Supreme Court with a copy of the nation’s blue constitution book and defended Venezuela’s current laws. “What’s at play here is the country,” she said, “the integrity of Venezuelans.”How long will these stall tactics be allowed to continue to crush Venezuelan liberty?
A few weeks earlier, on May 24, Maduro signed a document calling for a “constituent assembly” to draft a new version of Venezuela’s constitution in what he considers to be an effort to bring peace to the nation. The assembly would also have the authority to dissolve public powers and convene general elections—stipulations that could give Maduro undue influence. With voting for the new assembly scheduled for July, many have accused Maduro of giving extra weight to populations that might secure his re-election. The president of Venezuela’s democratically elected congress, Julio Borges, has since called the new assembly “nothing more than an evil announcement meant to divide, distract, and confuse Venezuelans.”
In many ways, Maduro’s bid for a new constitution has further united Venezuela’s opposition groups, who continue to carry out massive demonstrations and demand that the president be recalled from office. In recent months, opposition protestors—angered by the nation’s triple-digit inflation and dire shortages of food and medicine—have clashed with security forces, throwing rocks and jars of feces at officers, only to be met with tear gas and rubber bullets. In the last two months alone, at least 68 people have been killed in anti-government protests, with thousands more injured.
Photos released Monday show opposition protestors lighting a fire outside Venezuela’s Supreme Court headquarters in Caracas and vandalizing an office within the building. Many protestors were shoved to the ground as pro-government armed groups, or “colectivos,” attempted to blockade the headquarters. In Miranda, an opposition-controlled state in northern Venezuela, the nation’s interior ministry even took control of the state’s police force, citing its alleged criminal behavior and human rights violations. “It’s clear [the interior ministry will] try to use the police against the people,” said Henrique Capriles, the state’s governor and a member of the opposition.
Last week, Ortega criticized the government’s “ferocious repression” of opposition protestors. “Those opposed to the [new constitutional] assembly are called traitors, fascists, terrorists. We cannot live in a country like that,” she said. Despite her loyalty to Maduro’s predecessor, Hugo Chavez, Ortega has been a fierce critic of the current president, who has been known to jail opposition leaders and limit access to newspapers that speak critically of his government. Most recently, she has accused the president of violating universal suffrage. “The appeal I am attempting is to defend the rule of the people,” she said Thursday.
In the wake of mounting criticism from Ortega, the Maduro government has proceeded to blame her for recent violence, dubbing her a de facto opposition leader. On Monday, the Supreme Court—which remains loyal to Maduro—said her motion to stop the new constitution was inadmissible, since it lacked sufficient legal grounds. Ortega is now opposing the National Assembly’s approval of 13 Supreme Court officials and 21 substitute judges back in 2015, when the Maduro government maintained a legislative majority. In an interview with Union Radio, she said her aim was to restore Venezuela to its former stability. “It can’t be that institutions aren’t working here,” Ortega said, noting that Venezuela’s legislative bodies were lost and needed to be recovered.
Tuesday, May 30, 2017
There's almost nothing good to be said for sovereign default. Nothing is quite the disaster for an entire nation's foreign investment, for credit access both public and private (the little guys get socked up the wazoo), or for the value of a nation's money and savings than a nation that refuses to pay its bills. Just ask the boobs who ran Argentina a few years back. And then there's...Venezuela.
Venezuela is a socialist hellhole, but it seems to defy Lady Thatcher's iron dictum of socialist regimes: that eventually you run out of other people's money. It's easy to see why: Chavistas have learned to manipulate the international debt markets, quite unlike other communist dictatorships that came before them. They're well aware of Lady Thatcher's summary and apparently have learned from history. So instead of scrapping the failure that is socialism and creating value, which would require capitalism, they borrow cash from capitalists abroad. Russia and China have bought a lot of their issued debt. Chavista elites have bought a lot of it, too. Hedge fund speculators have dipped right in, and so have U.S. investment banks.
Goldman Sachs in particular has been taking heat for buying $2.8 billion in Venezuelan debt. The Venezuelan debt purchases pay Goldman 30 cents on the dollar, which isn't a good deal for the country, money-wise, but it's discounted because no one thinks Venezuela can really go on as it does. For Chavistas, this isn't a problem, since paying the bonds back is someone else's problem down the road. They intend to enjoy the cash now. But the bond issuance and its willing buyers in the markets do prop up the Chavista regime and undercut Venezuela's democratic opposition – even as the country starves for lack of food and medicine. The cash will likely go to Russia and China to pay for their loans to Venezuela. In short, Goldman's purchase wasn't any ordinary sovereign bond buy; it was a lifeline to the Chavista regime.
The Chavistas, being communists, don't particularly believe in paying their bills. They've defaulted on food bills, on oil supplier bills, on medical bills, on airline bills to private companies. They're not very different from Castro, who never paid a bill in his life – and that's who their teacher is. But they also know that should they default on their sovereign debt, they will lose access to any of the credit that keeps their other people's money regime running. That day should have come and gone long ago. But it didn't, because the likes of Goldman Sachs went and bought more of their bonds even as the country starves. This has prompted the Venezuelan opposition to soul-search in the morality of paying these bonds.
Not only have Venezuela's opposition questioned the rightness of paying for this Chavista spending spree, but they've since threatened to make it unpleasant for Goldman, warning the investment bank that should they take power, they may just walk out on paying those bonds.
The ball got rolling on this concept back in 2014 with an article titled "Should Venezuela Default?" by first-rate Harvard economist Ricardo Hausmann. The Chavistas screamed "financial outlaw" and "hitman" and threatened lawsuits against Hausmann, who is also Venezuelan, solely for raising the question of the morality of not defaulting.So, should Venezuela default on its foreign bonds? If the authorities adopted common-sense policies and sought support from the International Monetary Fund and other multilateral lenders, as most troubled countries tend to do, they would rightly be told to default on the country's debts. That way, the burden of adjustment would be shared with other creditors, as has occurred in Greece, and the economy would gain time to recover, particularly as investments in the world's largest oil reserves began to bear fruit. Bondholders would be wise to exchange their current bonds for longer-dated instruments that would benefit from the upturn.Others have since voiced similar sentiment.
None of this will happen under Maduro's government, which lacks the capacity, political capital, and will to move in this direction. But the fact that his administration has chosen to default on 30 million Venezuelans, rather than on Wall Street, is not a sign of its moral rectitude. It is a signal of its moral bankruptcy.
Hausmann has done more soul-searching on the morality of paying these bonds in a piece he wrote a few days ago, titled "The Hunger Bonds," noting the creepy dynamic of what they finance:You might invest in the EMBI+ because it promises higher returns, or because you want to make your savings available to a larger segment of humanity. But if you do, you will root for Venezuelan debt, which means wishing for really bad things to happen to Venezuela's people.At a minimum, he wants Venezuela yanked from the JP Morgan Emerging Market Bond Index (EMBI+) to keep Venezuela's rose-sucker dynamic from draining resources from honest emerging markets bonds and to keep Venezuela the pariah state it is.
As has been widely reported in the media, Venezuela is experiencing one of the most calamitous economic collapses ever, accompanied by massive doses of political repression and human-rights violations. So investing in the EMBI+ means that you rejoice when Wall Street analysts inform you that the country is literally starving its people in order to avoid restructuring your bonds.
Your happiness is easily explained: Venezuelan imports, after having collapsed by 75% from 2012 to 2016, are down more than 20% in the first quarter of 2017. That's good news for you as an EMBI+ investor, because it means that more money is left to service your bonds. Meanwhile, Venezuelans are involuntarily losing weight and searching for food in garbage piles. Sure, it's a humanitarian catastrophe. But, to you, it's a fabulous investment opportunity.
Now assume that you want to hold Venezuelan debt because you are hoping that President Nicolás Maduro will lose power and that a more sensible, democratically minded government, more in line with your moral compass, will emerge. Even in that case, you will still want the gains from Venezuela's future recovery to be used preferentially to service the old debt issued to finance the corruption and national destruction brought about by Maduro and his predecessor, Hugo Chávez. You will not be rooting for the recovery of livelihoods that Venezuelans deserve after having lived through this nightmare.
You will also be rooting for US judges to seize assets and impound money to pay you. In fact, analysts who are bullish on Venezuelan debt have been lobbying the government and opposition leaders with an implied threat: even considering a restructuring of your bonds, they point out, will allow those managing your assets to cause havoc in Venezuela.
If you are a decent human being, investing in Venezuelan bonds should make you feel "mildly nauseous," to borrow a phrase recently used by former FBI Director James Comey while testifying to the US Congress. Emerging-market fund managers feel a similar discomfort. They currently spend a disproportionate share of their time "getting the Venezuelan call right," because their bonuses are based on their over-performance relative to the index – of which Venezuela is the main driver.
Venezuela's opposition are right also in injecting an element of uncertainty into bonds for investors, warning that they may not service the debt. If they were operating in a normal even if shambling democracy, it might be questionable, but they are not. They and Venezuela's starving people have been operating in a dictatorship in democracy's clothing for years. They have had so much taken away from them. Only a club to Venezuela's overseas investors might make a difference. It's time for the West to stop bankrolling this vile Chavista regime.