Venezuela without Chavez an orphaned nation

Venezuela’s shrinking oil production is a reflection of the country’s grim financial situation, which has caused rolling blackouts that have even left oil facilities in the dark

In the flesh he seemed indestructible. Hugo Chavez was not especially tall, but he was built like one of the tanks he once commanded. He was possessed of seemingly inexhaustible energy. He travelled incessantly, both around his vast country and abroad. Each Sunday he would host live television shows lasting up to 12 hours. He would ring up ministers in the early hours of the morning to harangue them. For 14 years, everything that happened in Venezuela passed through his hands, or so he liked to think, The Economist wrote of him.

However, loved and mourned by millions of Venezuelans, Chavez, failed to turn the country’s oil wealth into prosperity.
Venezuela’s economy is a disaster, a Bloomberg analysis said in 2015. The government stopped releasing regular economic statistics, the annual inflation rate is believed to be150per cent, while an estimate from the Troubled Currencies Project put the real inflation rate at 808per cent.
In each of his speeches, Chavez said that Latin America had liberated itself from what he called the American imperialist yoke. He jailed some opponents and labeled his critics as degenerates and squealing pigs.
Chavez used to call his governing “Socialism of the 21st Century,” but political scientist Terry Lynn Karl dubbed it “petrolization” – making the spending of oil money your government’s main purpose, even after the oil money starts to run out. This has left the country in an impossible situation, Bloomberg said.
The divergence between Venezuela’s revenue and spending started long before the oil-price collapse. When oil prices hit their all-time high in July 2008, government revenue – 40per cent of which comes directly from oil – was already falling. The main problem was Venezuelan oil production, which dropped from 3.3 million barrels a day in 2006 to 2.7 million in 2011. It was still at 2.7 million in 2014, according to the latest BP Statistical Review of World Energy.
Venezuela’s shrinking oil production is a reflection of the country’s grim financial situation, which has caused rolling blackouts that have even left oil facilities in the dark, CNN said in June 2016, when S&P Global Platts announced that the country produced just 2.15 million barrels of crude oil per day that month, showing the weakest pace since February 2003.
A former bus driver, Maduro became President not for his personal qualities and achievements, but benefitting from a sympathy vote which later turned into mass protests. In December 2015 parliamentary election, the ruling United Socialist Party of Venezuela (PSUV) lost control of the National Assembly for the first time since 1999. Demonstrations against Maduro, have been fueled by anger and frustration over high inflation, violent crime and shortages of basic goods.
A former bus driver, Maduro became President not for his personal qualities and achievements, but benefitting from a sympathy vote which later turned into mass protests. In December 2015 parliamentary election, the ruling United Socialist Party of Venezuela (PSUV) lost control of the National Assembly for the first time since 1999. Demonstrations against Maduro, have been fueled by anger and frustration over high inflation, violent crime and shortages of basic goods.
The opposition-led Assembly voted to begin impeachment proceedings against President Nicolas Maduro for violating democracy. The latest protests that drew hundreds of thousands saw unrest leading to dozens of injuries and arrests.
After launching a political trial against Maduro on Tuesday in the National Assembly, the opposition coalition held nationwide marches dubbed “Takeover of Venezuela”.
“This government is going to fall!” crowds chanted, many wearing white and waving national flags as they congregated at nearly 50 sites across the country, Reuters reported.
“This needs to keep growing so that the government understands once and for all that we’re doing this for real,” said two-time presidential candidate Henrique Capriles, blaming authorities for what he said were over 120 people injured and some 147 protesters detained.
Coalition leaders called for a national strike and a November 3 march to the Miraflores presidential palace in Caracas, unless the election board allows a referendum to remove Maduro.
Thus, while president continues to accuse the opposition of coup attempts, the country with the world’s largest oil reserves remains to be a place, where people form queues to get basic foodstuff and angrily kill animals in zoos.
Another issue is the adjustment of interest rates when converting from the high-inflation bolívar to the low-inflation dollar. Keeping interest rates the same in nominal terms would bankrupt borrowers, since they expect to pay back in depreciating bolívares and not stable dollars. What is needed is an interest rate conversion, or desagio as it has been called in some Latin American cases.
Lifting currency controls is an essential precondition for establishing a currency board system, while with dollarization it ceases to be an issue at all. In contrast, lifting price controls is not a technical prerequisite for the enactment of either monetary reform. However, failure to do so would inevitably compromise the entire reform effort.
Next, as a measure to reduce the costs of goods and services and enhance Venezuela’s competitiveness, state-owned enterprises should be privatized, particularly in the energy sector. The privatization of PdVSA would dramatically increase efficiency, productivity and minimize corruption.
Finally, monetary and fiscal reform must go hand in hand. The Venezuelan government should be subject to a fiscal reform in order to ensure transparency. This is easier said than done.
Ideally, such a fiscal reform would require the government to publish a national set of accounts, which would include a balance sheet of its assets and liabilities and an accrual-based annual operating statement of income and expenses. These financial statements would be required to meet International Accounting Standards and they would be subject to an independent audit.
As mentioned previously, a big advantage of the currency board system is that it imposes fiscal discipline, by eradicating “lender of last resort” activities and central bank credit to the fiscal authorities and state-owned enterprises. This would put an end to the Venezuelan government’s rampant fraud and expenditure.
The opposition-led Assembly voted to begin impeachment proceedings against President Nicolas Maduro for violating democracy. The latest protests that drew hundreds of thousands saw unrest leading to dozens of injuries and arrests.
    The Wire

After launching a political trial against Maduro on Tuesday in the National Assembly, the opposition coalition held nationwide marches dubbed “Takeover of Venezuela”.
“This government is going to fall!” crowds chanted, many wearing white and waving national flags as they congregated at nearly 50 sites across the country, Reuters reported.
“This needs to keep growing so that the government understands once and for all that we’re doing this for real,” said two-time presidential candidate Henrique Capriles, blaming authorities for what he said were over 120 people injured and some 147 protesters detained.
Coalition leaders called for a national strike and a November 3 march to the Miraflores presidential palace in Caracas, unless the election board allows a referendum to remove Maduro. On the other hand, it should be remembered that the Bolivarian populism was preceded by an initial wave of “classic populism”, in the thirties and the nineties, with Peronism as one of its most complete models, and by a second wave of “neoliberal” populism, with its Menemist and Fujimorist touches. Therefore, we should not exclude, in the hypothetical event of a radical turn of political cycle in Latin America, which some would adventurously call a “turn to the right”, the emergence of a new populist alternative with more conservative or liberal embellishments. Populist leaders who governed their countries in the last 15 years have assumed a patrimonialist conception of the power, which has taken them to appropriate the state system and to colonize the institutions as if these belonged to them. That is the reason why deep difficulties from which a new government must be created in these conditions entail the unavoidable ouster of former governors.
Maybe, a clarifying example in this regard is what is happening with and at the Venezuelan parliament. On one hand, we have the attempt to replace it with a Community Assembly, not stipulated by the Constitution, whose main objective would be emptying a Congress led by deputies of the opposition with an extremely qualified majority. On the other hand, the election of outgoing parliamentarians is being forced (they officially end their mandate on 4 January) for 12 judges that would made up the Supreme Court, responsible for determining the constitutionality of the laws or the legality of the actions coming from the Executive Power.
Unquestionably, Latin America is facing an extremely complicated moment, with increasing economic and political difficulties. However, one more time it has to insist on regional diversity and the fact that not all countries will undergo changes, if any, in the same way. It is undeniable that events taking place in Argentina and Venezuela will have repercussions on other places, but we do not know how. For the moment, we can just look forward to it and follow what happens in the region with attention. 

Thus, while President continues to accuse the opposition of coup attempts, the country with the world’s largest oil reserves remains to be a place, where people form queues to get basic foodstuff and angrily kill animals in zoos.
The Wire

Venezuela without Chavez an orphaned nation

Venezuelas shrinking oil production is a reflection of the countrys grim financial situation, which has caused rolling blackouts that have even left oil facilities in the dark

In the flesh he seemed indestructible. Hugo Chavez was not especially tall, but he was built like one of the tanks he once commanded. He was possessed of seemingly inexhaustible energy. He travelled incessantly, both around his vast country and abroad. Each Sunday he would host live television shows lasting up to 12 hours. He would ring up ministers in the early hours of the morning to harangue them. For 14 years, everything that happened in Venezuela passed through his hands, or so he liked to think, The Economist wrote of him. However, loved and mourned by millions of Venezuelans, Chavez, failed to turn the countrys oil wealth into prosperity. Venezuelas economy is a disaster, a Bloomberg analysis said in 2015. The government stopped releasing regular economic statistics, the annual inflation rate is believed to be150per cent, while an estimate from the Troubled Currencies Project put the real inflation rate at 808per cent. In each of his speeches, Chavez said that Latin America had liberated itself from what he called the American imperialist yoke. He jailed some opponents and labeled his critics as degenerates and squealing pigs. Chavez used to call his governing Socialism of the 21st Century, but political scientist Terry Lynn Karl dubbed it petrolization making the spending of oil money your governments main purpose, even after the oil money starts to run out. This has left the country in an impossible situation, Bloomberg said. The divergence between Venezuelas revenue and spending started long before the oil-price collapse. When oil prices hit their all-time high in July 2008, government revenue 40per cent of which comes directly from oil was already falling. The main problem was Venezuelan oil production, which dropped from 3.3 million barrels a day in 2006 to 2.7 million in 2011. It was still at 2.7 million in 2014, according to the latest BP Statistical Review of World Energy. Venezuelas shrinking oil production is a reflection of the countrys grim financial situation, which has caused rolling blackouts that have even left oil facilities in the dark, CNN said in June 2016, when SP Global Platts announced that the country produced just 2.15 million barrels of crude oil per day that month, showing the weakest pace since February 2003. A former bus driver, Maduro became President not for his personal qualities and achievements, but benefitting from a sympathy vote which later turned into mass protests. In December 2015 parliamentary election, the ruling United Socialist Party of Venezuela (PSUV) lost control of the National Assembly for the first time since 1999. Demonstrations against Maduro, have been fueled by anger and frustration over high inflation, violent crime and shortages of basic goods. A former bus driver, Maduro became President not for his personal qualities and achievements, but benefitting from a sympathy vote which later turned into mass protests. In December 2015 parliamentary election, the ruling United Socialist Party of Venezuela (PSUV) lost control of the National Assembly for the first time since 1999. Demonstrations against Maduro, have been fueled by anger and frustration over high inflation, violent crime and shortages of basic goods. The opposition-led Assembly voted to begin impeachment proceedings against President Nicolas Maduro for violating democracy. The latest protests that drew hundreds of thousands saw unrest leading to dozens of injuries and arrests. After launching a political trial against Maduro on Tuesday in the National Assembly, the opposition coalition held nationwide marches dubbed Takeover of Venezuela. This government is going to fall! crowds chanted, many wearing white and waving national flags as they congregated at nearly 50 sites across the country, Reuters reported. This needs to keep growing so that the government understands once and for all that were doing this for real, said two-time presidential candidate Henrique Capriles, blaming authorities for what he said were over 120 people injured and some 147 protesters detained. Coalition leaders called for a national strike and a November 3 march to the Miraflores presidential palace in Caracas, unless the election board allows a referendum to remove Maduro. Thus, while president continues to accuse the opposition of coup attempts, the country with the worlds largest oil reserves remains to be a place, where people form queues to get basic foodstuff and angrily kill animals in zoos. Another issue is the adjustment of interest rates when converting from the high-inflation bolvar to the low-inflation dollar. Keeping interest rates the same in nominal terms would bankrupt borrowers, since they expect to pay back in depreciating bolvares and not stable dollars. What is needed is an interest rate conversion, or desagio as it has been called in some Latin American cases. Lifting currency controls is an essential precondition for establishing a currency board system, while with dollarization it ceases to be an issue at all. In contrast, lifting price controls is not a technical prerequisite for the enactment of either monetary reform. However, failure to do so would inevitably compromise the entire reform effort. Next, as a measure to reduce the costs of goods and services and enhance Venezuelas competitiveness, state-owned enterprises should be privatized, particularly in the energy sector. The privatization of PdVSA would dramatically increase efficiency, productivity and minimize corruption. Finally, monetary and fiscal reform must go hand in hand. The Venezuelan government should be subject to a fiscal reform in order to ensure transparency. This is easier said than done. Ideally, such a fiscal reform would require the government to publish a national set of accounts, which would include a balance sheet of its assets and liabilities and an accrual-based annual operating statement of income and expenses. These financial statements would be required to meet International Accounting Standards and they would be subject to an independent audit. As mentioned previously, a big advantage of the currency board system is that it imposes fiscal discipline, by eradicating lender of last resort activities and central bank credit to the fiscal authorities and state-owned enterprises. This would put an end to the Venezuelan governments rampant fraud and expenditure. The opposition-led Assembly voted to begin impeachment proceedings against President Nicolas Maduro for violating democracy. The latest protests that drew hundreds of thousands saw unrest leading to dozens of injuries and arrests. The Wire After launching a political trial against Maduro on Tuesday in the National Assembly, the opposition coalition held nationwide marches dubbed Takeover of Venezuela. This government is going to fall! crowds chanted, many wearing white and waving national flags as they congregated at nearly 50 sites across the country, Reuters reported. This needs to keep growing so that the government understands once and for all that were doing this for real, said two-time presidential candidate Henrique Capriles, blaming authorities for what he said were over 120 people injured and some 147 protesters detained. Coalition leaders called for a national strike and a November 3 march to the Miraflores presidential palace in Caracas, unless the election board allows a referendum to remove Maduro. On the other hand, it should be remembered that the Bolivarian populism was preceded by an initial wave of classic populism, in the thirties and the nineties, with Peronism as one of its most complete models, and by a second wave of neoliberal populism, with its Menemist and Fujimorist touches. Therefore, we should not exclude, in the hypothetical event of a radical turn of political cycle in Latin America, which some would adventurously call a turn to the right, the emergence of a new populist alternative with more conservative or liberal embellishments. Populist leaders who governed their countries in the last 15 years have assumed a patrimonialist conception of the power, which has taken them to appropriate the state system and to colonize the institutions as if these belonged to them. That is the reason why deep difficulties from which a new government must be created in these conditions entail the unavoidable ouster of former governors. Maybe, a clarifying example in this regard is what is happening with and at the Venezuelan parliament. On one hand, we have the attempt to replace it with a Community Assembly, not stipulated by the Constitution, whose main objective would be emptying a Congress led by deputies of the opposition with an extremely qualified majority. On the other hand, the election of outgoing parliamentarians is being forced (they officially end their mandate on 4 January) for 12 judges that would made up the Supreme Court, responsible for determining the constitutionality of the laws or the legality of the actions coming from the Executive Power. Unquestionably, Latin America is facing an extremely complicated moment, with increasing economic and political difficulties. However, one more time it has to insist on regional diversity and the fact that not all countries will undergo changes, if any, in the same way. It is undeniable that events taking place in Argentina and Venezuela will have repercussions on other places, but we do not know how. For the moment, we can just look forward to it and follow what happens in the region with attention. Thus, while President continues to accuse the opposition of coup attempts, the country with the worlds largest oil reserves remains to be a place, where people form queues to get basic foodstuff and angrily kill animals in zoos. The Wire