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.
The most important business stories of the day.
Get Bloomberg's daily newsletter.

“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.”