Friday, March 31, 2017

The Dictorship Unmasks Itself...

from Bloomberg
Venezuela slid closer toward dictatorship after the country’s Supreme Court gutted the only opposition-run institution -- the Congress -- seizing its powers and declaring the elected body invalid.

The court’s ruling late on Wednesday night was, in the words of lawmakers, nothing short of a coup. Several opposition leaders called for street demonstrations and other forms of “democratic resistance.”

As the once-wealthy oil power descends into a chaos of hunger and crime, however, it remained far from clear whether the increasingly despondent population will view the court’s move as a genuine turning point or just another step in the nation’s bottoming out toward hopelessness.

“This is not only going to cause alarm for concern within the region, but also actions, and at this point, it will be very difficult for countries to remain neutral,” said Carlos Romero, a political scientist at the Central University of Venezuela in Caracas. “The government is provoking; not only has it not made a single gesture toward dialog, it has become completely entrenched.”

Opposition deputies said they would appeal to international bodies for help. But that may yield little. Two days before the court’s ruling, the Organization of American States met to urge Venezuela to respect the congress that has now been neutered.

The U.S. State Department condemned the Supreme Court’s decision on Thursday, saying the move "greatly damages Venezuela’s democratic institutions," according to a statement.

Constitutional Crisis

In Wednesday’s ruling, the Supreme Court’s Constitutional Chamber declared the National Assembly was operating “outside the rule of law” after long standing claims that the legislature was in contempt of previous legal statements.

“The Constitutional Chamber shall ensure that the parliamentary powers are exercised directly by this Chamber or by the body it appoints to ensure the rule of law,” the decision said.

Venezuela’s dueling political factions have been at loggerheads since opponents of President Nicolas Maduro took control of the legislature last year. Since then, the Supreme Court, largely loyal to Maduro government, has curbed congress’s powers and overturned almost every piece of legislation passed. Until Wednesday though, it hadn’t gone as far as directly assuming congress’s functions.

The country’s armed forces, which as recently as October pledged their allegiance to President Maduro, have not made any comment on the Court’s decision.

Peruvian President Pedro Pablo Kuczynski said Thursday he would recall his ambassador, while OAS chief Luis Alamagro labeled the decision“self-coup” by the Maduro government and a called an emergency meeting of the 34-member body to address the situation in Venezuela.

Caracas-based newspaper El Nacional reported that several opposition officials and journalists were assaulted by government supporters outside of the Supreme Court on Thursday afternoon.

Foreign Minister Delcy Rodriguez took to her Twitter account to respond by denouncing what she called “a concert of the regional right-wing to attack Venezuela’s democratic system built on its popular base.”

Dictatorship Allegations

Maduro’s opponents quickly condemned the ruling as an illegal power grab.

“This is a dictatorship, and this was a coup,” Julio Borges, president of the National Assembly, said at press conference in Caracas. “The world has to help us and set off alarms.”

The legal dispute stems from accusations of fraud in the 2015 congressional elections, where the opposition won a landslide victory amid a wave of anger over widespread food shortages and skyrocketing inflation. Three opposition lawmakers were accused of foul play, and the Supreme Court says any decision taken by the National Assembly is null while they remain in the chamber.

While the opposition saw their legislative initiatives stymied and their efforts to unseat Maduro blocked last year, more recently they have been emboldened by efforts to deprive the cash-strapped government of international financing as it scrambles to kick start a moribund economy and make good on around $2.5 billion dollars of debt payments that come due next month.

Oil Deals

Borges said the government was “desperately” seeking cash, as the Supreme Court ruling also gave Maduro widespread powers to authorize oil joint ventures without congressional approval. The new legal framework could allow Maduro to raise funds by giving him the authority to form new ventures -- potentially with allies including China and Russia -- that typically involve signing bonuses paid to the government.
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“Russians, Chinese and Venezuelans are interested in entering the business,” Elias Matta, an opposition legislator and member of the National Assembly’s oil committee, said in an interview, adding that state oil company Petroleos de Venezuela SA has oil blocks ready for development as it seeks to turn around declining production. “Until yesterday, because of the conflict with the Assembly, they were unable to do so.”

The opposition warned investors that any fresh loans or new ventures approved without congress’s approval would be considered illegal and that future governments would not be obligated to pay the dues.

“The National Assembly will not recognize the Supreme Court, because we were elected by 14 million Venezuelans,” Borges said. “The Supreme Court elected themselves. The court is acting outside of the constitution.”

Saturday, March 18, 2017

Updating the Classics

Correcting Obama’s Mistake on Venezuela

from the Washington Post
AS VENEZUELA has plunged deeper and deeper into a economic, political and humanitarian crisis, its regional neighbors and the United States have stood back, refusing to adopt meaningful collective measures to pressure the authoritarian regime of Nicolás Maduro and instead hiding behind appeals for “dialogue” with the democratic opposition. Now the region’s leaders are being bluntly called out by the secretary general of the Organization of American States, Luis Almagro, who says the strategy has been a feckless failure and that collective action is imperative to restore Venezuelan democracy. The Obama adminisration ignored Mr. Almagro when he made a similar appeal last year. The Trump administration should listen to him.

Mr. Almagro, a former Uruguayan foreign minister, is anything but the right-wing fascist that Mr. Maduro’s propaganda describes. He is, rather, a leftist liberal democrat who has committed himself to defending the Inter-American Democratic Charter, a treaty adopted by the 34 OAS nations in 2001 that provides for action — including the suspension of OAS membership — when states breach democratic norms such as free elections, freedom of assembly and free speech.

The Venezuelan regime, says a 73-page report issued Tuesday by Mr. Almagro, “is in violation of every article of the Inter-American Democratic Charter.” As he put it, his report is “brimming with abuses, rights violations, curtailment of civil, political and electoral freedoms, poverty, hunger, deprivation of liberty, torture, censorship, and the whole catalogue of violations of political, social and personal dignity.”

Even the most servile apologists for the regime founded by Hugo Chávez acknowledge this descent into chaos, which Mr. Almagro says has produced a “humanitarian crisis . . . at a scale unheard of in the Western Hemisphere.” For the past year, debate has centered on what to do about it. The Obama administration, along with several Latin American governments, strongly backed a mediation mission led by three left-leaning statesmen and later joined by the Vatican. Opposition leaders, who had been pressing for a recall referendum to remove Mr. Maduro from office, came under heavy pressure from Washington to negotiate with the regime.

As Mr. Almagro vividly describes it, the initiative was an abject failure. The government fulfilled none of its promises and instead increased repression; the opposition was left divided and discredited. Concludes Mr. Almagro: “We cannot allow the premise of a false dialogue to continue to be used as a smokescreen to perpetuate and legitimize . . . what has become a dictatorial regime.”

Mr. Almagro is calling on the OAS permanent council to suspend Venezuela’s membership unless the regime agrees within 30 days to hold general elections, release political prisoners and establish a channel for international humanitarian assistance, among other measures. While recognizing the limits of such multilateral measures to arrest the country’s slide, he says “peer condemnation is the strongest tool we have.”

Suspension would require a two-thirds majority on the OAS council, and Venezuela has leverage over a number of small states that it supplies with oil at a discounted price. But a strong stand by the Trump administration could make a difference. Mr. Trump should align himself with the OAS chief — and with the cause of democracy in Latin America.

Friday, March 17, 2017

...and then they took away our bread...

from the Miami Herald
Facing a bread shortage that is spawning massive lines and souring the national mood, the Venezuelan government is responding this week by detaining bakers and seizing establishments.

In a press release, the National Superintendent for the Defense of Socioeconomic Rights said it had charged four people and temporarily seized two bakeries as the socialist administration accused bakers of being part of a broad “economic war” aimed at destabilizing the country.

In a statement, the government said the bakers had been selling underweight bread and were using price-regulated flour to illegally make specialty items, like sweet rolls and croissants.

The government said bakeries are only allowed to produce French bread and white loaves, or pan canilla, with government-imported flour. However, in a tweet on Thursday, price control czar William Contreras said only 90 percent of baked goods had to be price-controlled products.

Two bakeries were also seized for 90 days for breaking a number of rules, including selling overpriced bread.

Juan Crespo, the president of the Industrial Flour Union called Sintra-Harina, which represents 9,000 bakeries nationwide, said the government’s heavy hand isn’t going to solve the problem.

“The government isn’t importing enough wheat,” he said. “If you don’t have wheat, you don’t have flour, and if you don’t have flour, you don’t have bread.”

He said the country needs four, 30-ton boats of wheat every month to cover basic demand.

The notion that bread could become an issue in Venezuela is one more indictment of an economic system gone bust. The country boasts the world’s largest oil reserves but it has to import just about everything else. Facing a cash crunch, the government has dramatically cut back imports, sparking shortages, massive lines and fueling triple-digit inflation.

Looting and chaos continue in Venezuela

Venezuela has been wracked by an economic crisis with soaring inflation and shortages of commercial goods. Most economists blame the woes on price controls, falling prices for oil exports, heavy government spending and production-crippling policies that gave Venezuelans lots of money but little purchasing power.

Earlier this week, President Nicolás Maduro launched “Plan 700” against what he called a “bread war,” ordering officials to do spot checks of bakeries nationwide. In the plan, the government said it would not allow people to stand in line for bread but it’s unclear how it might enforce the order.

“The government is doing everything in its power to end the bread lines,” Crespo said, “but they’re looking at the whole thing backwards.”

Crespo said he’d been in touch with several union members in Caracas and that most said they’d passed the inspection by simply opening their pantries.

“The bakeries are showing the authorities that they have no bread inventory,” he said. “The government has to see the reality.”

Thursday, March 16, 2017

OAS head says Venezuela should hold elections or face suspension from bloc

from Yahoo News
CARACAS (Reuters) - The head of the Organization of American States (OAS) on Tuesday said that crisis-wrought Venezuela should be suspended from the regional diplomatic body if it does not hold general elections "as quickly as possible."

Venezuela's election board in October suspended the opposition drive for a recall referendum against President Nicolas Maduro despite the OPEC nation's crushing economic crisis, the government's unpopularity and public opinion in favor of a plebiscite.

Luis Almagro, secretary general of the OAS and a former foreign minister of Uruguay, stressed that elections are key to allowing Venezuela to overcome severe food shortages and spiraling inflation.

"What's happened doesn't leave any doubts," Almagro said on Tuesday. "Venezuela is violating all the articles in the Democratic charter."

Elections "are the only real solution that exists," he added.

Venezuela's Foreign Ministry responded in a statement.

"Almagro heads the hemisphere's fascist right-wing group that harasses, assaults and viciously attacks Venezuela, without any scruples or ethics," the Foreign Ministry said in a statement.

Maduro views the OAS as a pawn of hostile U.S. policy and has often dismissed Almagro as a turncoat working for its ideological adversaries in Washington.

For Venezuela to be suspended from the OAS, a two-thirds vote in the 34-nation OAS' General Assembly would be needed.

Caracas can count on support from many poor Central American and Caribbean nations that receive Venezuelan crude under favorable terms. Leftist allies like Bolivia and Ecuador would also throw their weight behind Maduro, a former bus driver and union leader who rose to become foreign minister under his late mentor Hugo Chavez.

Still, South American politics are shifting toward the right, with Argentina, Brazil and Peru all losing leftist governments in recent months.

Grappling with fewer allies, Venezuela was expelled from the Mercosur trade bloc in December in part due to concerns about the government's human rights record.

Almagro has called Maduro a "petty dictator" and criticized Venezuela's multiple woes ranging from food and medicine shortages to alarming violent crime and regular power-cuts.

"Approving the suspension ... is the clearest effort and gesture we can make at the moment for the people of that country, for the continent's democracy, for its future, and for justice," Almagro's 75-page report on Venezuela added.

The OAS suspended communist-ruled Cuba from 1962-2009. Havana has not returned given its view, like Venezuela, that the body is servile to Washington.

Venezuela's next presidential vote is slated for 2018.

Wednesday, March 15, 2017

Socialism 101

Bolivar Currency Alternatives

from Business Insider
Venezuela's economy has seen its currency, the bolivar, plummet as inflation has spiraled into the triple digits, causing people there to struggle to meet their daily needs.

In response, some Venezuelans have chosen to cross international borders to stock up on needed supplies, as others turn to a black market where goods are often sold in US dollars.

Another alternative that has gained traction is bitcoin, a cryptocurrency whose value wobbles frequently and which can be used for clandestine purchases, both licit and illicit.

Bitcoin has been embraced in Venezuela as the economy has faltered over the last few years, providing both a way of buying essential goods and resisting the unpopular government of President Nicolas Maduro.

The number of users has surged from 450 in 2014 to 85,000 in 2016, according to Venezuelan bitcoin trading exchange Surbitcoin.

"Bitcoin is a way of rebelling against the system," Caracas-based software developer John Villar told Reuters in October 2014, not long after he started using the cryptocurrency for online purchases.

Bitcoin had dropped 70% between November 2013 and October 2014, but Venezuela's own currency had dropped 60% against the US dollar on the black market in the country over roughly the same period.

"Even though bitcoin is volatile, it's still safer than the national currency," Kevin Charles, then a recent economics graduate, told Reuters. (Many Venezuelans still converted their bitcoin immediately into dollars, however.)

"In Venezuela, we have a gold fever: a bitcoin fever!" a bitcoin miner — someone who uses a complex computer setup to create bitcoins using elaborate algorithms — said to Reuters in October 2014.

Now the Venezuelan government, long caught up in battles with the political opposition and in bloody struggles with rampant crime, has turned its attention to bitcoin users and producers.

A recent post on a related subreddit by someone claiming to be a Venezuelan bitcoin miner, cited by The Washington Post, said the government was jailing miners and accusing them of terrorism, money laundering, and computer crimes.

Two brothers in Caracas, who spoke to The Post anonymously, said police had raided their home in November, demanding $1,000 bribes for each of their more than 90 mining terminals. They paid up, they said.

Despite its other turmoil, Venezuela, which has no laws against bitcoin, had been amenable to bitcoin miners, for whom electricity can be their biggest expense.

Electricity is heavily subsidized in the Caribbean nation, where the longstanding socialist government has provided many services and goods to the population at low cost. (Those subsidies have also inspired profligate use by residents.)

The intense power demands of mining terminals may be the undoing of some miners, however. State power authorities can reportedly detect outsize power usage, and some miners who have been arrested were charged with electricity theft.

The chief of the federal police agency said recently that bitcoin miners were imperiling the electrical service in a town south of Caracas, which is not implausible, considering that the country's electrical service, plagued by underinvestment and graft, has often been overwhelmed in times of high demand. (Thieves have also started pilfering electrical and communications gear for valuable components.)

Despite enthusiasm for bitcoin in Venezuela, its spread may be hindered by the seemingly wide net of the authorities' crackdown and by the one-third of Venezuelans who don't have bank accounts.