Venezuela’s Horrific Food, Medicine Shortage

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[MY COMMENTS ON] O’Neil: Venezuela’s Collapse Has Further to Go

Today, Dr. Shannon O’Neil, senior fellow at the  Council on Foreign Relations, spoke on Bloomberg Surveillance about the situation in Venezuela. Below, I elaborate on my initial reactions to this interview.

Fearing defeat, the National Electoral Council (under President Maduro’s control) did not activate the gubernatorial elections and the recall referendum.

The opposition engaged in such “dialogue” with two publicly declared goals: 1) make the recall against president Maduro happen and 2) achieve the release of 71 political prisoners, including Mr. Leopoldo Lopez.

Unless any of those goals are accomplished, it looks like these talks will not result in a political solution (For more information, see my report Venezuela This Week).

Why the Democratic Unity Roundtable (MUD) gave up the recall referendum and wants to wait until 2018? Venezuela’s opposition is divided into two main positions: The MUD prefers a pacific and electoral long-transition whereas another group, represented by Leopoldo Lopez, Maria Corina Machado and Diego Arria, insists on a constitutional referendum that could become a non-violent and electoral short-transition.

Who is right? Could a deeper humanitarian crisis and gross violation of human rights be prevented now? Is it permissible to tolerate famine and deaths -due to current economic crisis-, arguing this could save thousands of Venezuelans from a potential violent conflict?

Those who believe this dire situation must be stopped before it gets worse, would support Mr. Lopez’s approach. People who think that it will actually get worse if the opposition attempts to protest now on the streets instead of talking,  would bet on the MUD.

Since politicians behind the MUD want to be the main leaders of the opposition, it is understandable why they are willing to agree upon the government’s breaches of basic democratic rules as long as president Maduro orders the National Electoral Council to celebrate gubernatorial elections in 2017 and the presidential election in 2018.

However, would president Maduro agree to carry out any of said elections? The electoral calendar does not give him too much choice.

On the other hand, what if Chavismo accepts defeat in both, the gubernatorial elections and the presidential election? Apparently, the problem would be solved.

Nevertheless, facts show it will not be that easy. By avoiding the celebration of the gubernatorial elections and the recall referendum, this year, the government demonstrated it is not giving any advantage, no matter if it has to break constitutional rules to stay in power.

In the event Chavismo undertakes the elections, would them be free, fair and transparent? Would the attempt by the government to steal the elections end up in the bloodshed the Obama administration and the Vatican wanted to prevent?

As of today, the MUD is wining -and, of course, the government too. If initiatives like #SiHaySalida do not take off, president Maduro may be still ruling the country by 2018 -I give more details in my post When will Venezuela’s Maduro exit the presidency?

Mr. Trump might decide to have a dog in this fight. It is very tricky because his good intentions may end up helping Mr. Maduro, in case the Trump administration intervenes to help the wrong people oust president Maduro.

There is always a possibility that a popular uprising and/or Venezuela’s army intervention backfire, victimizing president Maduro.

The bottom line: At this stage, certain measures outside diplomatic boundaries could be more damaging than helpful.

Venezuela This Week – SAT 03, 2016

sihaysalida
Voluntad Popular

* November 28 to December 02, 2016. These are the Editor’s picks. Every week, Claudio Sandoval (@Claudiopedia) presents his selection of  Top News about Venezuela -comments included.

OVERVIEW

This week I cover the following six different -yet interconnected- matters:

  • OPEC agrees to cut production to boost prices / Venezuelan Oil & Gas Brief
  • The Government asks its controlled Supreme Court to appoint the new members of the National Electoral Council (CNE)
  • MERCOSUR agrees to suspend Venezuela
  • Venezuela’s currency is in free fall
  • Venezuela’s opposition declares it could leave the talks
  • Leopoldo Lopez’s party launches #SiHaySalida, as a new strategy to oust Maduro by democratic means.

NEWS AND COMMENTS OF THE WEEK

  • OPEC agrees to cut production to boost prices / Venezuelan Oil & Gas Brief

1. This deal, aimed at raising oil prices, is great news for President Maduro, as Chavismo desperately needs petrodollars to buy more time in power -extra cash to service foreign debts and import basic goods, in an attempt to cope with high unpopularity rates and the economic mess it created.

2. As Reuters Venezuela reported, the deal helped Venezuela’s oil basket price end slightly higher, reaching $40,47 per barrel (better than last week -closed at $39,83 pb).

3. The news was also regarded as Mr. Eulogio Del Pino’s -Minister of Petroleum and President of Petroleos de Venezuela, S.A., (PDVSA)- diplomatic victory.Mr. Del Pino believes that by August 2017, oil price will range from $60 to $70 pb and firms will restart investments (that would have experienced a drop of $300bn, since 2014).

4. Venezuela would cut 95,000 barrels per day, which is thought to be a life-saver from an embarrassing situation, as PDVSA has been unable to raise its productionArgus shows some interesting numbers that are worth sharing in this week’s edition:

Venezuela’s crude production dropped 338,000 b/d or almost 13pc over the first 10 months of 2016, from 2.654mn b/d at end-2015 to 2.316mn b/d in October…

Venezuela’s official crude output in October was 18,000 b/d below September’s reported production of 2.334mn b/d.

… Calculated on an annualized basis at PdV’s current year-to-date average export price of $34.21/bl, a crude output decline of 338,000 b/d totals almost $4.2bn of lost potential export revenues.

Venezuela has continued servicing its foreign debt on time despite an over 61pc plunge in PdV’s average oil export price from $88.42/bl at end-2014 to $34.21/bl for year-to-date 2016 as of 25 November.

5. During previous talks-to save the deal-, Venezuela had argued that Iran should not cut but Iraq. The latter ended up agreeing  to a 210,000 bpd cut. Iran was allowed to continue raising output. Venezuela will monitor compliance with the agreement, along with Algeria and Kuwait.

  • The Government asks its controlled Supreme Court to appoint the new members of the National Electoral Council (CNE)

6. The electoral solution to Venezuela’s crisis might be tied to an impartial and independent CNE. Right now, the Chavista government has total control over the CNE, whose members must be replaced any time soon, pursuant to article 296 of the Venezuelan constitution (seven-year period). With this control, the government has undertaken several irregularities throughout the years, such as electoral fraud, delaying regional elections based on their popularity or rejecting the recall referendum against president Maduro.

7. Now that the Venezuelan Congress is controlled by the opposition, the government does not want Congress to do its job and appoint the new members of the CNE. In his petition, Congressman Hector Rodriguez (the government), argued that the opposition fell under constitutional omission and that is why the Supreme Court (the government) must appoint these people. It is worth noting that Chavismo has been illegally sabotaging legislative sessions so that Congress does not get the job done in many matters, including this important one.

8. In the event the Supreme Court illegally nominates the new members, there is higher risk next “expected” elections in 2017 (regional) and 2018 (presidential) will not be fair and transparent.

  • MERCOSUR agrees to suspend Venezuela

9. It is the first institutional reprimand against the Maduro administration, based on its human rights violations and economic mismanagement of Venezuela. While the political effect of this decision represents a dramatic drawback to Chavismo’s leadership in the region, there may not have major legal and economic impact.

10. With this suspension, Venezuela will have the right to vote but no formal voice within the organization. However, Venezuela does not lose its trading privileges -President Maduro has been importing basic goods from MERCOSUR to face shortages (especially cattle from Brazil and grain, dairy products and poultry from Uruguay). Unless, they find better partners, it is unlikely Venezuela will stop buying products in this market or breach contracts with suppliers. In retaliation, they may delay payments though…

  • Venezuela’s currency is in free fall

11. I already gave my detailed comment of the week on my post Why Venezuela has a Black Market for Toilet Paper?. The bottom line: To fix this, the government should eliminate -one way or another- price and currency controls.

  • Venezuela’s opposition declares it could leave the talks

12. The Democratic Unity Roundtable (MUD), which is a faction of the Venezuelan opposition that holds talks with President Maduro, is now coming under pressure as the so-called “Dialogue” may lead them nowhere in the immediate future.

13. The MUD claims that the Government is not complying and, therefore, threatened to leave if such situation continues. The MUD knows that President Maduro is talking to buy more time in power rather than fulfilling people’s electoral expectations. So, this move is an excuse to get out of the negotiation room anytime.

14. Since “the talks” will end up without results, the MUD and the Government are about to start playing the blame game for a better exit.

  • Leopoldo Lopez’s party launches #SiHaySalida, as a new strategy to oust Maduro by democratic means.

15. In my opinion, this is an smart strategy in legal and political terms. Based on President Maduro’s undemocratic exercise of power, the Venezuelan Congress can declare “absolute absence”in accordance with article 233 of the Venezuelan constitution. I will post my technical opinion regarding this matter next week.

16. What is #SiHaySalida about? The opposition holds majority in Congress and is able to request a  federal plebiscite, asking voters whether they want Maduro to go or stay (article 70 of the constitution).

17. If citizens say they want President Maduro gone, then, Congress would declare his absolute absence. Legislators can do this anyway but the idea of backing the declaration with the consent of most Venezuelan voters makes it stronger and more legit. According to #SiHaySalida all this can be done early next year.

18. This is a plebiscite and not a recall referendum (article 72 of the constitution). The former only measures a popular opinion on important State matters (for example, whether the people would like the president gone), whereas the latter gives voters actual power to decide if the ruler has to go.

19. The plebiscite does not produce any legal effect because it is just a poll but official, instead of being conducted by private pollsters, the CNE has to take care of it. On the other hand, the recall referendum does entail direct legal consequences. In other words, while people can fire Maduro through the recall referendum, Venezuelans cannot oust Maduro by freely expressing their opinion of rejection against him. In sum, both, the plebiscite and the recall referendum, could be used to measure President Maduro’s performance.

20. One can predict the Supreme Court would rule against it and even if the plebiscite is accepted, the CNE would do anything to avoid it. Nevertheless, Venezuela is not facing a legal problem but an unprecedented political crisis.

21. After the MUD accepted to partner with President Maduro and kill the recall referendum, the people lost their hope and motivation to protest. With this new proposal by Volutad Popular -which is as legal and legit as the recall referendum-, Venezuelans’ hope and moral could be revived and the risk of a popular upheaval may change certain things.

22. #SiHaySalida can go further than #LaSalida. Voluntad Popular has nothing to lose at this point. Some of its prominent leaders are in jail, exiled or enjoying legislative immunity. Under current circumstances, Leopoldo Lopez -who is also barred from holding office- has no real chance to become president of Venezuela either.

23. It is logical that common citizens and the political leaders that have suffered the most, look for democratic alternatives to the MUD’s talks with President Maduro, which only increases President Maduro’s longevity in power and their party quotas while the country is in free fall.

By Claudio Sandoval, Venezuela Political Analyst and Commentator. You can follow him on Twitter, Facebook and the hashtag #claudiopedia