sure win ph 'Trump Closing Door To Migrants Will Create New Dynamic' | Venezuela's Never-Ending War

There were three main rounds of social protest in Venezuela—in 2014, 2016 and 2017—that Maduro responded to in a very authoritarian way. By 2017, Venezuela was no longer counted as a democracy Photo: Getty ImagesThere were three main rounds of social protest in Venezuela—in 2014, 2016 and 2017—that Maduro responded to in a very authoritarian way. By 2017, Venezuela was no longer counted as a democracy Photo: Getty Images

Rigged elections, migration, hyperinflation and other internal disputes have marred Venezuela's once flourishing economy. Once cited as one of the fastest-growing countries in Latin America, Venezuela now ranks at the bottom of several global charts.

From Hugo Chavez’s days, when the country became the ultimate example of a successful economy, to now a failed state, Bull sheds light on the need for reforms in every sector for the country to revive. On the political landscape, which is in turmoil by itself, Bull points out that US intervention has made the picture more complex as allegations of rigging elections has put the incumbent Nicolás Maduro’s presidency in jeopardy.

In an interview with Jinit Parmar, professor at the University of Oslo’s Centre for Development and the Environment (SUM) Benedicte Bull, who has written extensively on the political economy of Venezuela, highlights what went wrong for the petrostate. Excerpts:

Latin America And Human Rights: The Never-Ending Crisis In Venezuela, Cuba And Nicaragua

BY Danita Yadav

Q

How did Hugo Chávez come to power in 1999? What were the factors that led people to vote for him?

A

During the 1980s and 1990s, Venezuela was in a pretty deep economic crisis, basically due to two major reasons— corruption and mismanagement of the economy. In addition, there were also the problems that an oil-driven economy often represents. There were signs of mismanagement of oil during the 1970s, indicating an environment of Dutch disease (an economic phenomenon wherein both the rapid development of one sector of the economy and the decline of other sectors lead to the substantial appreciation of the domestic currency). These were mainly related to the common overvaluation of the currency, leading to problems for the non-oil economy, which it already had since the 1970s.

Later, the problems due to overspending aroused and the political leadership at the time had taken several big loans which later caused deep economic problems. This led the International Monetary Fund (IMF) and the World Bank to put some harsh structural adjustment programmes on Venezuela’s economy which deteriorated the living conditions, particularly for the Venezuelan poor, significantly. This eventually led to a major uproar in 1989, which was met with brutal repression from the governmental forces leading to the death of several thousand civilians.

These years were sensitive and especially in the early and mid-1990s, the two big political parties—the Partido Socialcristiano (COPEI) and the Acción Democrática (ADECO)—which had been sharing the presidential seats between them since 1958, imploded and ended up in the bottom of the table. This was when Chávez appeared and

staged a coup in 1992 during which he was imprisoned. His imprisonment time saw him planning a political comeback, which further created a political movement where he presented himself as the one who should save Venezuela. This idea of a revolution which had the backing of his military career brought him to power in 1999.

Latin America's Dilemma

BY Tom Turnipseed

On Tuesday, deep inside Chinese Mongolia, the Harmanpreet Singh-led Men in Blue did just about enough to beat a spirited Chinese side. The occasion: the final of the Asian Champions Trophy 2024.

Q

How big was Venezuela’s dependency on oil during Chávez’s reign? How did the Bolivarian idea work for Chávez?

A

Venezuela was the ultimate petrostate as its dependency on oil was huge. But its dependency on oil was nothing new as the state had some of the largest oil reserves in the world. It has been an oil-driven economy since the 1920s. The new idea that Chávez brought with him was to distribute oil in different ways across different sectors. The aim behind this was to ensure that more oil and its benefits were shared between the state and the people.

Chávez also aimed to work closely with the state-controlled oil company, the Petroleos de Venezuela (PDVSA). The PDVSA was established in 1976 as a national company which meant that the production and supply of oil was nationalised but there were private companies, too, which existed simultaneously. His idea was to ensure that more of these benefits would go to the state-owned companies. For this, he even worked actively on ensuring good relations with the Organization of the Petroleum Exporting Countries (OPEC) and formed alliances with Middle-Eastern countries to make OPEC work as a cartel to ensure a price increase.

In Venezuela, his main challenge was to take complete control of PDVSA, but there was a lot of opposition against his policies on the same. In addition, the political elite of Venezuela were also against some of his policies.

Q

Socially and politically, how was Chávez’s reign? Were there any major riots or protests that led to internal tensions?

A

The developing dissent, especially among the middle class and among the young elite, peaked in 2002 when there were country-wide protests against Chávez. As a result of his approach towards nationalising companies, he fired thousands of workers at several oil companies and at PDVSA as well where he later took total control. As a policy measure, he made it mandatory for the existing companies to form alliances with international companies.

In 2005 and 2006, he brought in another round of nationalisation programmes to develop the economy. During this time, the Venezuelan government inked pacts with China and took huge funding that would be diverted towards the development of Venezuelan industries. But all these companies failed and the country had loans worth $63 billion from China. There was another round of protests in 2007 against Chávez’s taking over the National Assembly and making constitutional changes that would ensure that he and his party would come to power again. This time, young, frustrated Venezuelans took the lead. This round of protests generated a new generation of political leaders; one of them being Juan Guaidoó, who later became the president of the National Assembly in 2019.

Q

This is the beginning of Nicolás Maduro’s presidency. How deeply did Venezuela plunge into an economic crisis post-2012-2013? When did hyperinflation start affecting the economy?

A

The economy was already showing signs of weakness during Chávez's reign. For example, he started printing money to pay for his extended social and economic programmes. However, the problems came to the surface after his death in 2013 and with the plunging of the oil price in 2014. The petrostate suffered major losses when the oil price dropped globally in 2014. This led to huge debt, with very little income and very little productive capacity to fulfil the needs of the Venezuelan people. As a result of this, there was a drop in income, and the lack of domestic production and later Venezuela started to face scarcities of goods and services. Meanwhile, poverty and inflation skyrocketed, too. Maduro responded by printing more money, making matters worse. This was a disincentive for internal development and this economic system generated so much inflation and corruption that it turned the shape of the Venezuelan economy.

This led to three main rounds of social protest—in 2014, 2016 and 2017—that Maduro responded to in a very authoritarian way. By 2017, Venezuela was no longer counted as a democracy.

Q

How influential is the USA’s intervention in Venezuela and how is it affecting the country’s political landscape?

A

Venezuela has been very dependent on the USA since the 1920s when it was the American companies that extracted and controlled oil in Venezuela. The USA had a dislike of Chávez from the beginning.

They gave their support to the opposition and became very influential, and in the first Trump administration started pushing hard for sanctions. The USA has imposed some very mild sanctions on Venezuela since 2006 when they introduced an arms embargo and some individual sanctions against specific persons in the Chavez regime.

But in 2017 (Trump’s first tenure) they sanctioned the financial aspects of Venezuela. Everything that had to do with the Venezuelan state was kind of cut off from US financial markets and then essentially from global financial markets. As a result, inflation went from being very high to what we call “hyperinflation” i.e. above 1,000 per cent annually. Then in 2019, the USA introduced oil and gold sanctions. The gold sanctions didn't matter much, but the oil sanctions were kind of the nuclear option. It hit the Venezuelan economy hard and they were not allowed to sell their oil on the regular market. At the same time, the USA supported the announcement of Juan Guaidó, leader of the opposition, as the real president of the country.

On the other side are Russia and China who see Venezuela as an important partner due to its oil reserves and strategic position. For China, the country was a kind of door opener to partnering with Latin America in general. The Chinese are disappointed with Venezuela but they still want to keep them as a partner because the Chinese work trying to establish long-term relations and are interested in Venezuelan oil. They (Chinese) don’t try to influence the opposition or the government during the elections, but have still been important for the survival of Maduro’s regime. Russia has had quite different interests in Venezuela. They have sold a lot of arms, especially after the USA’s arms embargo towards Venezuela in 2006. They also have powerful oil companies, like Rosneft (a Russian integrated oil company) which has been a major player. But the most important point for Russia is that Venezuela is a partner in Russia’s quest for a “multipolar world order, as it has a strategic location closer to the USA.

Q

The latest presidential elections in Venezuela had allegations of rigging by Maduro. How did that pan out?

A

The governments in Venezuela have been in some or another way managing to do some kind of tricks to outmanoeuvre or repress the opposition for many years. However, the fraud of the presidential elections in July 2024 was of a different magnitude. The Maduro episode was the latest where the incumbent government simply refused to show the detailed result and proof. However, everybody knew that Maduro lost with a large margin.

Even left-wing countries in Latin America, mainly Brazil and Colombia, know that, and have pushed for Maduro to recognise it. Of course, it hasn’t worked well for Brazil, as it blocked Venezuela’s entry into the Brazil, Russia India, China, and South Africa (BRICS) alliance in Russia’s Kazan. This could be looked at as a major defeat for Venezuela’s prestige.

The Unwomanly Face Of War

BY Rashmi Varma

lodi777 phQ

Going ahead, what should be Venezuela’s focus area for economic and political revival?

A

Global politics will influence Venezuela to a significant extent. It will be very interesting to see how and what impact the global factors will have on Venezuela. There's not a lot of revolt but people are angry.

The other thing is, of course, the economy, whether the government can create some kind of economic growth. This depends to a large extent on the external sanctions imposed on them because the economy has been working well internally for the past three years. There has been some, although very modest, growth in the last couple of years. This growth was to a large extent a result of licenses that were given for some oil production to Chevron as a payback to PDVSA. Due to sanctions on Russian oil exports, some countries started importing Venezuelan oil.

It's very hard to see how they're going to make substantial changes to the economy without further lifting off the sanctions because there are so few other things that work. One of the problems is the failing of the system. There are public services that are horrible and it's hard to think that the engine of the Venezuelan economy will work without that. Another issue to watch is migration. Around 7.7 million Venezuelans have left the country—that is more than 1/4th of the population. It has become a big problem for the neighbouring countries.

If Trump now closes the doors to more migrants, it will create a new dynamic. The only thing that could change the picture is if Trump makes a deal for sanctions liftingsure win ph, depending on Maduro accepting the return of migrants. But it is difficult to imagine that a person like Marco Rubio, Trump’s incoming foreign minister, will accept. He has been a “hardldliner” against Maduro for many years.