Wednesday, December 6, 2017

Venezuela's economic chaos deepens, no sign of exit from the crisis (Dec. 6, 2017)

News Briefs
  • An in-depth report on Venezuelan politics by Jon Lee Anderson in the New Yorker paints a grim picture of a country in economic, social and political chaos, and likely to stay that way. After a year in which the opposition tried to capitalize on elections last year that gave it a legislative majority, President Nicolás Maduro remains firmly entrenched in power. Despite international condemnation and sanctions, the situation seems to be in a stalemate for now. 
  • In fact, if snap elections were held right now, Maduro would easily beat leading opposition figures, according to a new Venebarometro poll released yesterday. The survey found that Maduro would win 28.6 percent of the vote, followed by Leopoldo López with 18 percent and former Miranda Gov. Henrique Capriles with 15.4 percent, reports the Miami Herald. López is under house arrest, however, and Capriles has been barred from political office -- so neither is a viable option. Former National Assembly President Henry Ramos Allup and Former Lara Gov. Henri Falcón -- both of whom are eligible --would win 6.6 percent and 6.3 percent of the vote, respectively. Maduro's standing was helped by the October regional election win, according to analysts, and would be able to capitalize on opposition divisions.
  • Venezuela's U.N. ambassador, Rafael Ramírez, announced his resignation on Tuesday, saying he was ousted for his opinions but remains loyal to Chávez, reports the BBC. (See Anderson's article, above, for some of the history between Ramírez and Maduro.) Ramírez has been critical of the Maduro government in recent months, but has also been implicated in oil sector corruption. Several allies, including a cousin, have been arrested in recent weeks as part of a crackdown on graft, notes Reuters. The resignation is a sign of growing rifts within Chavismo, and Ramírez's ouster could also be a response to his perceived presidential ambitions. In a public letter Ramírez said he was ousted because of constructive criticisms regarding the government's economic policies, reports Efecto Cocuyo.
  • Venezuelan officials are threatening to suspend next year’s presidential elections unless the United States drops financial sanctions, reports the Miami Herald.
  • The New Yorker piece includes several amazing quotes. Former Uruguayan President José Mujica, who told Anderson that Venezuela must solve its food production problems. "There’s a fundamental problem there—you can’t make socialism by decree. We on the left have the tendency of falling in love with whatever it is we dream about, and then we confuse it with reality. It seems to me that Bukharin’s words apply: ‘It’s not about retreating from the revolution. It’s about respecting reality.’ You have to resolve the issue of how people are going to eat, and insure that the economy functions, or else it’s all going to go to shit on you." Also, an anecdote about how Melania Trump reportedly commiserated with the wife of jailed opposition leader Leopoldo López, telling her that the White House can also feel confining.
  • Earlier this week Maduro announced the launch of a new cryptocurrency, to be called the petro, and backed by the country's oil reserves. Though details were scarce, it is aimed at sidestepping the devaluing bolivar, reports the Associated Press. And that bolivar is depreciating at a rate "hard to fathom," according to Bloomberg. Opposition leaders questioned the move, saying the digital currency would require Congressional approval, reports Reuters. And experts say the new currency would suffer the same credibility problems as the bolivar in international markets, reports Reuters separately. A Washington Post piece explores some of the unknowns of a state-backed cryptocurrency, noting that there's "no conclusive research on the impact of such a system on a country’s financial stability or the methodology needed to link a central bank with an autonomously operating currency."
  • Venezuela is going through a period of hyperinflation, with a rate of over 800 percent as of October. The IMF predicts that consumer prices will rise by 2,300 percent next year, reports the New York Times. In addition, physical cash itself is in short supply, making daily transactions difficult. "The economic turmoil has put families — poor and affluent alike — at the intersection of some very tough choices, bred a stressful uncertainty about the course of any given day and turned the most basic tasks into feats of endurance."
  • Bolivian President Evo Morales is pushing legal boundaries to seek a fourth presidency -- as he did previously in seeking a first and second reelection, each requiring reform or court rulings. In doing so, he is slipping towards a disruption of the constitutional order, argues Héctor Schamis in El País. He questions the Bolivian government's appeal to international conventions guaranteeing political participation, and comparisons to Europe's parliamentary governments. "Those who pursue perpetuation have thought of the best of institutional alibis: indefinite reelection, an attribute of a parliamentary system, but in a hyper-presidential system. In plain terms, that formula consecrates an authoritarian regime."
  • The ruling makes Bolivia the only presidential democracy in the Americas, along with Nicaragua, to place no-limits on reelection, reports the Guardian. Yet though the move has been criticized internationally, it isn't clear that voters would reject Morales, given the choice.
  • An anti-corruption system passed last year in Mexico was supposed to be a watershed moment in the citizen fight against government corruption. Instead, citizens who form part of the new National Anti-Corruption System say they have been faced with obstacles that prevent them from carrying out their work, reports the New York Times in an in-depth piece. Specifically, commission members have been repeatedly denied briefings on issues such as spyware deployed against activists, or reports of Odebrecht bribes to a close ally of the president. "... Many civil society leaders, including some who helped engineer the creation of the anti-corruption system, say they have fallen prey to a familiar trick: The government creates a panel to address a major issue, only to starve it of resources, inhibit its progress or ignore it."
  • Opponents of leftist Mexican presidential candidate Andrés Manuel López Obrador try to link him to Hugo Chávez. But the comparison doesn't square with his history, argues Hernán Gómez Bruera in a New York Times Español op-ed. His stint governing Mexico City was modern and economically liberal. He promoted national and international investment, and is well remembered by business sectors. His presidential platform over several campaigns has promised fiscal responsibility and he shies away from polarizing terms such as "neoliberalism" in his critiques of the current government. A far better comparison would be to former Brazilian President Luiz Inácio Lula da Silva, writes Gómez Bruera.
  • Colombia's Congress has faced significant opposition in passing legislation needed to implement the peace accord with the FARC. Notably, lawmakers have employed filibustering tactics to stall and modify bills, a dangerous tactic that could derail the peace process, warns Fabio Andres Diaz in the Conversation. And presidential elections next year also pose a danger, as politicians seek to avoid backing unpopular measures.
  • Cuban President Raúl Castro will end his tenure in February leaving a changed nation, writes Richard Feinberg in the Brookings Institution's Order from Chaos blog. Notably, the younger Castro brother, diversified economic trade, opened doors to foreign investment, and created more travel opportunities for Cubans. Socially the country is much changed as well, notes Feinberg. "Another major shift that accelerated during the last decade: the evolution of Cuban society from socialist uniformity toward a more heterogeneous mix of property relations, income levels, and social styles."
  • The former Cuban Minister of Culture, Armando Hart, died on Sunday. He was a confidante of Fidel Castro, and is credited with a successful campaign that slashed the island's illiteracy rate from 25 percent to five, according to the New York Times' obituary.
  • Opinion guru Robert Worcester -- founder of Mori -- was hired by Trinidad and Tobago to provide $10 million in consultancy services between 2013 and 2015, reports the Observer.
  • The U.S. government announced it would be pulling out of talks for a U.N. agreement on handling international migrant flows, reports the New York Times. The Trump administration said the move was in defense of the country's sovereignty, but critics say it will contribute to a trend of American isolationism. 
  • U.S. statistics show that detentions of migrants at the country's border fell in the first eight months of Trump's presidency, while arrests of undocumented migrants within the country has soared, reports the Guardian. The trend is troubling, according to advocates who say it indicates a focus on people with deep ties to the U.S.  A new Human Rights Watch report details the impact of deportation on people forced to leave their homes and families, many after decades of working and paying taxes in the U.S.
  • Slave labor is "endemic" to Brazil's meat and poultry industries, according to a report by the Institute for Agriculture and Trade Policy (IATP). Workers labor for up to 20 hours a day, in "egregious" conditions, reports Reuters.
  • A Brazilian magazine cover featuring an all-white group of "Brazilians of the year" has come under fire in a country where most people describe themselves as black or mixed race. The polemic cover also made reference to "angry racism," reports the Guardian.
  • A project in Rio de Janeiro's Alemão favela, Embracing Champions, teaches youth to box, is the subject of a 16-minute documentary entitled The Good Fight winning awards in film festivals around the world, reports the Guardian.
  • The fate of the missing Argentine submarine that disappeared with 44 crew members last month remains a mystery, but experts believe that water short-circuited the battery and later caused an explosion that instantly killed the crew and sunk the vessel, reports the Wall Street Journal.
  • Take a look at Cali, Colombia's salsa capital, in a charming essay and photography in the New York Times.

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