Transition ploys and default predictions in Venezuela (Feb. 11, 2015)
The Venezuelan opposition is hoping to use a trick from late President Hugo Chávez's playbook to oust his successor, reports the Miami Herald. Seven years ago he amended the national constitution to allow unlimited reelection.
Last week, the opposition party Causa R floated a constitutional amendment to roll-back presidential terms from six years to four years. The proposal would also eliminate indefinite reelection in favor of a limit of two consecutive terms. The articles that would be changed are the same ones Chávez modified in 2009 to stay in power. The strategy is important because it would be difficult for a constitutional court to oppose, explains the Herald piece
The bill will have to clear the opposition dominated congress, and then be ratified in a referendum. If it succeeds, presidential elections could be held in December and Maduro could be leaving in January of next year, two years ahead of schedule.
Needless to say, the ruling party is not a fan, and says the Causa R proposal is an attempt to topple a constitutionally chosen government.
Other options floating around include constitutional reform, a constitutional assembly and a referendum. A recall referendum would be difficult for the opposition to win, and if it occurred less than two years before the end of Maduro's administration, would lead to the current VP serving out the rest of the term.
Over at the Economist, the Bello column advocates a negotiated transition as the "only" escape from a social explosion. "The outlines of such a deal are clear. The regime would concede an amnesty for political prisoners and agree to restore the independence of the judiciary, the electoral authority and other powers. In return the opposition would support essential, but doubtless unpopular, measures to stabilize the economy." (Overly simplistic according to Francisco Toro at the Caracas Chronicles who says the piece "pivots from hair-raising oumaigá to disarming simplicity in a few paragraphs.")
A more nuanced analysis by David Smilde at Venezuelan Politics and Human Rightssuggests that the government is steadily losing power as it refuses to make necessary economic changes. Yet, though its actions are hardly those of a model democracy, he mentions the case of jailed opposition members in particular, the National Assembly election last year that swept the opposition into power was clean and recognized. Yet, the situation is "fraught with dangers" and "an attempt at an undemocratic transition could come from either side," he notes.
There's a flurry of stories in the international press focusing on Venezuela's ongoing economic crisis -- the narrative is one of imminent collapse. It seems this will be the year of Venezuela's default, reports Business Insider. Earlier this week the Wall Street Journal said the same thing, noting that Venezuela is one of the largest borrowers in the developing world. (See Tuesday's briefs.) The Financial Times reports that yesterday Venezuelan bonds fell for the third consecutive day on fears the country is close to default, and that members of the government's economic team had reportedly debated stopping foreign debt payments.
The country is about to go bust, and nobody should have pity for the investors who will lose their shirts when it does, argues Juan Nagel at Foreign Policy. While Venezuela has consistently paid its considerable foreign debt, and promises to continue to do so, the government has failed to implement economic reform that would make the strategy sustainable.
Nagel particularly criticizes investors who have bought Venezuelan debt. "Losing money from investing in Venezuela is akin to losing it from, say, funding a company that engages in morally reprehensible acts." He calls on the international community to focus on Venezuelan citizen needs after a default, rather than "the interests of angry hedge fund managers or international bankers."
Over at the Caracas Chronicles Francisco Toro pins the foreign currency explosion to Maduro's policies. While the opportunity for arbritrage was there before Chávez's death, the gap between the official exchange rates and the blackmarket was controlled and maxed out at four. Under Maduro the gap has widened to 160 times the official rate. "Madurismo is about the total victory of the artibrageur kleptolobby," he concludes.
A new government policy limiting the working hours of malls -- or more correctly, asking them to generate their own power for half the day or shut down during those hours -- is muddled, according to critics cited in the Wall Street Journal. The move is ostensibly to save power amid a drought that is affecting hydroelectric generation. (See yesterday's briefs.) But mall operators will likely turn to fossil-fuel-burning generators, which use cheap subsidized gasoline -- even though the Maduro administration says it wants to tame the country's heavy fuel consumption. Electricity is almost free in Venezuela, giving citizens little incentive to conserve, explains the Associated Press.
The WSJ notes that malls are an integral part of life in Venezuela, a place where citizens gather at night when the streets are too unsafe and can have everything from radio stations to embassies in some cases.
The wife of jailed opposition leader Leopoldo López, Lilian Tintori, has an op-ed in the Huffington Post denouncing invasive visiting procedures, which she says have included strip searches for her and her mother-in-law. (The government has denied the allegations, see Jan. 22's briefs.)
News Briefs
Last week, the opposition party Causa R floated a constitutional amendment to roll-back presidential terms from six years to four years. The proposal would also eliminate indefinite reelection in favor of a limit of two consecutive terms. The articles that would be changed are the same ones Chávez modified in 2009 to stay in power. The strategy is important because it would be difficult for a constitutional court to oppose, explains the Herald piece
The bill will have to clear the opposition dominated congress, and then be ratified in a referendum. If it succeeds, presidential elections could be held in December and Maduro could be leaving in January of next year, two years ahead of schedule.
Needless to say, the ruling party is not a fan, and says the Causa R proposal is an attempt to topple a constitutionally chosen government.
Other options floating around include constitutional reform, a constitutional assembly and a referendum. A recall referendum would be difficult for the opposition to win, and if it occurred less than two years before the end of Maduro's administration, would lead to the current VP serving out the rest of the term.
Over at the Economist, the Bello column advocates a negotiated transition as the "only" escape from a social explosion. "The outlines of such a deal are clear. The regime would concede an amnesty for political prisoners and agree to restore the independence of the judiciary, the electoral authority and other powers. In return the opposition would support essential, but doubtless unpopular, measures to stabilize the economy." (Overly simplistic according to Francisco Toro at the Caracas Chronicles who says the piece "pivots from hair-raising oumaigá to disarming simplicity in a few paragraphs.")
A more nuanced analysis by David Smilde at Venezuelan Politics and Human Rightssuggests that the government is steadily losing power as it refuses to make necessary economic changes. Yet, though its actions are hardly those of a model democracy, he mentions the case of jailed opposition members in particular, the National Assembly election last year that swept the opposition into power was clean and recognized. Yet, the situation is "fraught with dangers" and "an attempt at an undemocratic transition could come from either side," he notes.
There's a flurry of stories in the international press focusing on Venezuela's ongoing economic crisis -- the narrative is one of imminent collapse. It seems this will be the year of Venezuela's default, reports Business Insider. Earlier this week the Wall Street Journal said the same thing, noting that Venezuela is one of the largest borrowers in the developing world. (See Tuesday's briefs.) The Financial Times reports that yesterday Venezuelan bonds fell for the third consecutive day on fears the country is close to default, and that members of the government's economic team had reportedly debated stopping foreign debt payments.
The country is about to go bust, and nobody should have pity for the investors who will lose their shirts when it does, argues Juan Nagel at Foreign Policy. While Venezuela has consistently paid its considerable foreign debt, and promises to continue to do so, the government has failed to implement economic reform that would make the strategy sustainable.
Nagel particularly criticizes investors who have bought Venezuelan debt. "Losing money from investing in Venezuela is akin to losing it from, say, funding a company that engages in morally reprehensible acts." He calls on the international community to focus on Venezuelan citizen needs after a default, rather than "the interests of angry hedge fund managers or international bankers."
Over at the Caracas Chronicles Francisco Toro pins the foreign currency explosion to Maduro's policies. While the opportunity for arbritrage was there before Chávez's death, the gap between the official exchange rates and the blackmarket was controlled and maxed out at four. Under Maduro the gap has widened to 160 times the official rate. "Madurismo is about the total victory of the artibrageur kleptolobby," he concludes.
A new government policy limiting the working hours of malls -- or more correctly, asking them to generate their own power for half the day or shut down during those hours -- is muddled, according to critics cited in the Wall Street Journal. The move is ostensibly to save power amid a drought that is affecting hydroelectric generation. (See yesterday's briefs.) But mall operators will likely turn to fossil-fuel-burning generators, which use cheap subsidized gasoline -- even though the Maduro administration says it wants to tame the country's heavy fuel consumption. Electricity is almost free in Venezuela, giving citizens little incentive to conserve, explains the Associated Press.
The WSJ notes that malls are an integral part of life in Venezuela, a place where citizens gather at night when the streets are too unsafe and can have everything from radio stations to embassies in some cases.
The wife of jailed opposition leader Leopoldo López, Lilian Tintori, has an op-ed in the Huffington Post denouncing invasive visiting procedures, which she says have included strip searches for her and her mother-in-law. (The government has denied the allegations, see Jan. 22's briefs.)
News Briefs
- A historic meeting in Havana tomorrow between the heads of the Roman Catholic and Russian Orthodox churches is the beginning of a year of peacemaking in Cuba, reports the Associated Press. President Barak Obama is expected to visit later this year, marking an end to a half century of hostility, and Colombia is wrapping up peace negotiations with the FARC, ending another fifty-year conflict.
- A bipartisan group of lawmakers is criticizing the Obama administration's decision last month to award a trademark for Havana Club rum to the Cuban government. They say the move could could undermine protections for American intellectual property rights holders, reports the Wall Street Journal. (See Jan. 18's briefs.)
- Caterpillar, a U.S. heavy equipment manufacturer, has named a Puerto Rican company to be its dealer in Cuba as soon as the embargo is lifted. It's a message to policy makers that the company is ready to go, Caterpillar officers told the Miami Herald.
- In the midst of the Guatemalan spring that challenged established political parties from government last year, voters elected the first openly gay member of congress in September, reports the Guardian. Sandra Moran took office last month, promising to drive forward reform to outlaw hate crimes and discrimination against the LGBT community, and sponsor a ground-breaking identity law that protects sexual diversity.
- In El Salvador, human rights organizations are denouncing that more than 500 LGBT people have been murdered since 1995 without their cases even being investigated, reports El Faro. The police has even admitted an internal homophobia problem, but is just beginning to address it.
- It looks like the Zika panic media narrative might finally be turning: the New York Times reports that Brazilians are celebrating Carnival and shrugging off concerns about mosquitos, noting more pressing worries about the economy. And the Wall Street Journal reports that "embattled" President Dilma Rousseff has seized on the virus as a rallying point for the deeply divided country, and a distraction from impeachment charges against her and the worst recession in decades.
- But the story won't die out so quickly. A study published yesterday provides new evidence of a link between the Zika virus and microcephaly, reports the Wall Street Journal.
- About 50 people were killed in a prison riot in Monterrey early this morning, reports Reuters.
- Is Mexican landrace corn the next quinoa? Native maize varieties -- there are about 59 of them -- are a staple of Mexican cuisine, but have been hard hit by competition from cheap U.S. corn. But top international (and increasingly local) chefs are into maize, and could be behind a revival, reports the New York Times.
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