A repeated misinformation screed by Venezuelan government officials
is that opposition plotters want to overthrow the government, trash the
constitution and return to the failed policies of the pre-Chávez past.
This refrain is used in public appearances and pronouncements under the
Goebbels theory that if repeated enough, enough people will believe it
to be the truth. Facts, however, belie these statements. Despite blatant
electoral distortions, the opposition has repeatedly participated in
elections. Opposition leaders have recognized the failings of the
political model that led to the unrest of the 90’s, and in most
instances defend the social net created under Chávez. Some, like the
imprisoned Leopoldo López, have done community organizing to improve
conditions in poor neighborhoods, using the Chávez model. That is the
positive Chávez legacy: recognition of the need to redress social and
economic disparities.
Negative aspects of that
legacy include the virulent sectarian discourse used to belittle and
prevaricate about the opposition and any perceived enemies. Chávez’s
famous smelling of the sulfur in the UN, referring to President GW Bush,
is pittance compared to the epithets and lies used against domestic
opponents. A new low is the constant homo-hateful innuendos used by
Maduro during the presidential campaign and to this day against his
rival Henrique Capriles, as well as blatant dismissive sexism against
opposition assemblywoman Maria Corina Machado.
Mud
slinging could be comically entertaining if the stakes were not so high,
as pervasive sectarian speech is a threat to any democracy. Belittling
the opposition, characterizing opponents as enemies, and the call to
“Socialist Homeland or Death!” used to end public appearances has
created a fractured society—and is probably behind the disregard for
life reflected in the 70 murders a day in 2013. Hate speech comes in
many forms but is always a creeping social cancer.
Polls reflect a majority of Venezuelans consider their nation to be in crisis. In a recent Op-ed in the NYT Venezuela’s president, Nicolás Maduro, sought to defend his government and policies with facts supporting his position (
Venezuela: A Call for Peace). But many of those facts are either outright misrepresentations or panglossian distortions. His sound-bite essay needs a reply with long facts.
Per Capita National Income and the GINI Coefficient, Revisited.
Economic and social
numbers are sometimes difficult to read and with propaganda masters
behind them can be obfuscating. Despite information limitations,however,
inferences can be made that contradict Maduro’s assertions of increased
social welfare under chavismo.
On its face, Gross
National Income per Capita (GNI/pC) in Venezuela has increased from a
little over $4,000 in 2004 up to almost $12,500 in 2012. During this
period, it should be noted, the price of oil increased nearly 90%. The
Gross National Income, as calculated by the World Bank, quantifies the
GDP in local currency converted to US$ and adjusted for inflation.
Unfortunately, the official GNI/pC may not reflect realities on the
Venezuelan kitchen table.
It is illegal since 2010
to inform or publicize or use any ForEx number that is not the official
rate of exchange, i.e. 6.30 bolivars per dollar. Brokers went to jail
for posting “parallel market” exchange rates, and at least eight
websites doing the same have local access blocked while their authors
remain anonymous to avoid prosecution. Any official number, such as the
GNI/pC can legally only be calculated using that official exchange rate.
In
2010 the parallel (black) market rate—the rate at which many businesses
were forced to operate due to the Byzantine and corrupt bureaucratic
entanglement that the dollar allocation system has engendered—went from
6.30 to 9.14 bolivars per dollar at year’s end. That, on its face, would
imply a devaluation of close to 45%. It is estimated that the
government itself has been deficit financing by intervening in black
market transactions, supplying about 20% of commercially needed dollars.
To be fair, not all transactions are in black market dollars, but if
only 30% (including government participation) of them are, as companies
and individuals are forced to this market for their needs, the estimated
devaluation for 2010 would have been around 14%.
|
|
estimated
supply
|
Value
(rate) in 2004 (Bs per US$)
|
Bs 1.92
|
|
|
|
|
Official Rate
2010
|
Bs 6.30
|
70% of
demand
|
“Black” Rate
end of 2010
|
Bs 9.14
|
30% of
demand
|
Weighted Value 2010
|
Bs 7.15
|
|
“Black” Devaluation Jan-Dec 2010
|
45%
|
|
“Black” Devaluation 2004 to 2010
|
376%
|
|
Weighted Devaluation Jan-Dec 2010
|
14%
|
|
|
|
|
Official Rate
2012
|
Bs 6.30
|
70% of
demand
|
“Black” Rate
end of 2012
|
Bs 17.33
|
30% of
demand
|
Weighted Value 2012
|
Bs 9.61
|
|
Weighted Devaluation 2010 to 2012
|
53%
|
|
|
|
|
Official Rate
2013
|
Bs 6.30
|
65% of
demand
|
“Black” Rate
end of 2013
|
Bs 63.70
|
15% of
demand
|
SICAD I (Preferential allocation rate)
|
Bs 10.00
|
25% of
demand
|
Weighted Value 2013
|
Bs 20.19
|
|
Weighted Devaluation 2012-2013
|
110%
|
|
The
same calculation implies a devaluation of over 52% by 2012, as the black
market rate shot up to Bs 17.33 per dollar. What this means is a brutal
recessive adjustment in the real GNI/pC from US$10,140 in 2009 to $5,916
in 2012, a 52% decrease in the official numbers. The seeds of chavista
economic disaster were already bearing fruit during this period, under
Chávez.
Lack of transparency and arcane multi-tier
rates make it difficult to estimate accurate numbers but certainly a
decrease in national income per capita has occurred. Even being
generous, the Gross National Income per Capita was reduced at least by a third over
2010-2012. In 2013, with a black market rate of 63.70 Bs per dollar,
the estimated devaluation over 2012, notwithstanding the new
preferential
allocation rate tier, was around 120%. Maduro claims
solutions are in the works to diminish the pressure on the currency,
including a market-based
auction rate, which at its launch placed
free market dollars over 50 Bs per dollar, and a tourist/visitor rate,
which in effect will extract hard currency from anyone visiting Venezuela (current
black market rates - note: distribution of this information is illegal in Venezuela).
The
pressure on the currency has a twofold origin. First, the productive
sector collapsed; after a frenzy of repeated expropriations and
takeovers, many industries and farm production shut down. This led to
increased imports of even basic staples—flour, cooking oil, sanitary
napkins... Second, the greatest generator of foreign currency, the oil
company PDVSA, sells its products to the government which in turn
barters oil for services or sells it below market prices in
petro-diplomacy efforts. The government has not paid PDVSA and has a
gigantic debt with the company: $23bn as per PDVSA’s 2012 financial
statements.
This
is not sound economic policy. The economic consequences threaten
hyperinflation. The immediate result is negative wealth distribution and
this is what the Coefficient of Equality of Income Distribution (GINI)
reflects. Equal distribution of increasingly scant resources is not
progress. The GINI coefficient for Venezuela (39 in 2011) indeed points
to a greater equality in distribution of wealth than in the past, it is
the same as countries like Mauritania and Malawi, more equal
distribution than in the US and a little less than in Bhutan, India or
Uzbekistan. But to use the GINI the way Mr. Maduro used it in his
commentary (“Venezuela has consistently reduced inequality”) is to
misrepresent it as an indicator of social progress. Unless the economy
as a whole creates wealth (measured by proxy with GNI/pC), this
coefficient is meaningless.
Claims of poverty reduction
solely by chavista policies are also dubious at best. Poverty and
indigence have decreased in Venezuela, but
ceteres paribus, likely it would have been the case regardless. Chile
and Colombia, countries with similar societies, reduced poverty in the
same magnitude if not greater than that of Venezuela, while not using
anything close to the Chávez model. According to the World Bank between
2005 and 2011 poverty declined in Venezuela by 22.16%, while in Colombia
and Chile it declined by 31.14% and 20.88% respectively.
Indicators
such as literacy and infant mortality (according to UNESCO) have had
positive trends over more than forty years and, during chavismo, these
trends continued. Education from elementary to graduate has always been
free, as a constitutional right throughout the 20
th century and before that by presidential decree promulgated by president Antonio Guzmán
Blanco on June 27, 1870. Health care as a universal right has always
existed in Venezuela and all governments have attempted to provide it in
the past. These are not chavista achievements or ideals, as Maduro
claims.
Reasserting policies to entrench chavismo, the
Minister for Education, Héctor Rodríguez, recently said “it’s not as if
we’re here to raise people out of poverty and have them become middle
class squalids.” Squalid is the routine derisory term used by the
government to describe the opposition. This statement was made while
announcing mandatory rules for teaching Chávez-socialism, starting from
Pre-K, in all schools, public, private or parochial. A continuous
history rewrite.
Legitimacy of the Government and the Protests
“Since
1998, the movement founded by Hugo Chávez has won more than a dozen
presidential, parliamentary and local elections through an electoral
process that former American President Jimmy Carter has called ‘the best
in the world.’ Recently, the United Socialist Party (USP) received an
overwhelming mandate in mayoral elections in December 2013, winning 255
out of 337 municipalities.” Thus spake Maduro in the New York Times.
This
statement has several problems. The USP in fact won 240 municipalities.
The other 15 Maduro claims are from splinters from that unity,
including so called “true chavistas” that reject him. Overall in those
elections, the USP lost 23 municipalities to the non-leftist opposition.
This opposition now holds 75 municipalities, including all major cities
in the country. The Maduro regime has responded by curtailing access to
federal services and depriving legally entitled funds to opposition
municipalities; in the same way it has done to states held by opposition
governors.
But the use of former President Carter to
defend elections held in Venezuela is most egregious and upsetting.
Maduro refers to a Carter speech from September 2012, yet fails to
mention that it was regarding the technology of the balloting system.
The article he links to is about the fully automated touch-screen voting
system, developed in Venezuela, which uses thumbprint recognition
technology and prints receipts to confirm voters’ choices.
Maduro
fails to mention the Carter Center for Democracy findings on the 2012
and 2013 presidential elections summarized as: “There is not agreement,
however, about the quality of the voting conditions and whether every
registered voter is able to vote one time, and only one time. In
addition, the report finds a series of inequities in campaign conditions
in terms of both access to financial resources and access to the media,
which diminish the competitiveness of elections, particularly in a
legal framework that permits indefinite reelection of public officials.”
It is noteworthy that in 2003 a drive to recall
then president Chávez was sponsored by the opposition. Over three
million signatures were gathered. Hugo Chávez announced in February 2004
that the list of names had been seized by the government. The list was
published on-line and, in effect, became an enemies list with many
signatories fired from their jobs, expelled from their schools and
generally persecuted in an electoral intimidation tactic by the regime
to fight the recall referendum later that year. To this day,
intimidation continues.
In April of 2013 the
special election called on account of Chávez’s death resulted in the
election of Nicolas Maduro, his hand picked successor. The official
results were 50.61% to 49.12%, a difference of close to 230,000 votes
over opposition leader Henrique Capriles. Despite calls by the
opposition for a full recount and requests by UNASUR and the OAS for the
same, the National Electoral Council, stacked by government loyalists,
did a selective sampling audit and certified the results. The opposition
has never conceded the legitimacy of this election, only acknowledged
the de facto regime. In light of the Carter Center report regarding the
abusive use of incumbency and media by the government and the continued
intimidation of the electorate, these results at the very least are
suspect, reflect a souring of chavismo among the population, and
indicate massive opposition to the regime.
The
legitimacy of the incumbent Maduro’s ascension—notwithstanding birther
claims by the opposition—is constitutionally questionable. Article 229
prohibits the vice president or any governor from being elected
president. Henrique Capriles resigned as Governor of Miranda state on
June 6, 2012 to run against Chávez to whom he lost in October. Capriles
was reelected governor in December 2012 and subsequently ran against
Vice President Maduro upon Chávez’s death. No record of Capriles’
resignation for this election is available but that does not give Maduro
a free pass. Any waiver to either candidate would contravene the
constitution.
On the other hand the protests on the
streets are constitutionally protected not only by guarantees of freedom
of speech and assembly. Article 350 recognizes the right of “the people
of Venezuela… to disavow any regime, law or authority that goes against
democratic values, principles and guarantees, or that infringes human
rights.”
Besides the undermining of democratic
values and principles described above, over the last two months there
have been arrests of opposition leaders, divestiture of elected
officials and at least 81 documented human rights violations. There is
continued harassment to opposition newspapers through millionaire
lawsuits and withholding of foreign currency to buy paper, and
intimidation and outright closures of media in general, including CNN
and the regional news channel NTN24.
An Illusion of Democracy
What
began as a student protest against crime in the streets has become a
festering unrest. It is hard to gauge the scale of the protest because
the government suppresses information, while the opposition magnifies
and publicizes any incident. But by calling the recent round of
exploratory meetings to create “dialogue” roundtables the government
tacitly acknowledges there is a political crisis.
This
call for dialogue is a savvy political move by Maduro to splinter the
opposition, trick an international audience into believing in a mirage
of conciliatory moves, and attempt to create a puppet opposition for an
illusion of democracy. In 2002, after the failed coup against Chávez,
similar talks were held and promises of tolerance made. Those promises
were all broken by the regime. Signatories of that accord include the
current president. The record is not good, but internationally talk of
sanctions has been suspended while the “dialogue” unfolds. Dialogue
talks--live on TV-- that began with Maduro asserting: “I am not here to
negotiate or make any deals”.
Just because a regime
holds elections it does not mean it is a functioning democracy.
Otherwise places such as North Korea, Cuba, Syria, Saddam’s Iraq and
Mubarak’s Egypt would be considered showcases of democracy with
reportedly massive happy voter turnout. As of Jan. 2014 Venezuela was ranked 133
rd
out of 150 countries in the World Democracy Profile by Worldaudit.org.,
labeled a “hybrid regime” (ranks below “flawed democracy”) by the
Economist Intelligence Unit, and ranked 121 out of 128 in the BTI (Bertelsmann Stiftung’s Transformation Index) measure of democracy and freedom.
 |
National Assembly Member Maria Corina Machado
leaves a rally attacked by tear gas. |
Symptoms
of lack of democracy include:jailing opponents, suppressing protests,
repressive militias, media control,and a rigged electoral process. In a
cynical turn of events on the same day President Maduro’s essay
“Venezuela: A Call for Peace” was published,opposition leader Maria
Corina Machado was being tear gassed in a public rally and divested of
her congressional seat. Venezuela is not a “participatory” democracy. At
best it can be called a Totalitarian Democracy.
The
situation in Venezuela has parallels to Iran 2009. At that time, after a
contested election, images of popular protests and counter repression
by government militias and hit squads filled TV screens and news
outlets.Social media was awash with feeds of the protest. The death of
Neda Agha-Soltan seared many an eye and there was a belief that change
would come out of the sacrifice and pain of so many youths.
To this day Iran, a staunch Venezuela ally, remains under a totalitarian regime that keeps the peace with an iron fist.
----------------------------------------------------------
Background and references:
Leopoldo López: WikiLeaks – LL goes to the Barrios to Gather Political Support:
http://www.cablegatesearch.net/cable.php?id=09CARACAS1330&q=leopoldo-lopez
LL in Popular Barrio Forum:
http://globovision.com/articulo/redes-populares-de-unt-debatieron-la-reforma-en-el-cementerio-2
Henrique Capriles
HC has Sex with Gorillas:
http://www.washingtonpost.com/world/venezuela-president-pushes-back-using-bellicose-words-and-brute-force/2014/03/18/55357a74-aecf-11e3-b8b3-44b1d1cd4c1f_story.html
HC Leads a Homosexual Prostitution Ring:
http://www.europapress.es/internacional/noticia-maduro-acusa-capriles-ser-complice-red-prostitucion-homosexual-20130815094350.html
Maria Corina Machado
MCM is an Empty Doll:
http://www.lapatilla.com/site/2013/09/06/en-la-pagina-de-an-llaman-a-maria-corina-machado-la-muneca-hueca-de-la-burguesia-imagen/
MCM Needs to Keep Her Place:
http://caracaschronicles.com/2014/04/01/political-rape/
MCM is not Smart, Needs Help:
http://www.aporrealos.com/forum/viewtopic.php?p=799773&sid=8f2b3eab6c3f893f033f99c5aa718be9
MCM is Pitiful:
http://www.aporrea.org/oposicion/a186460.html
Illegal Dollars
New Law makes it Illegal to Buy/Sell Dollars as Commodities:
http://www.correodelorinoco.gob.ve/tema-dia/ley-contra-ilicitos-cambiarios-evitara-que-se-trate-al-dolar-como-mercancia/
History of Foreign CurrencyExchange Regulations:
http://www.monografias.com/trabajos13/monodef/monodef.shtml
Failed Attempts to Curtail Black Market Dollars:
http://www.washingtonpost.com/blogs/worldviews/wp/2014/02/27/how-a-sensible-economic-policy-might-have-sparked-venezuelas-protests/
Arbitrage and the Bolivar:
https://knowledge.wharton.upenn.edu/article/the-law-of-unintended-consequences-sitme-and-venezuelas-currency-market/
Currency Inflation:
http://www.bloomberg.com/news/2014-03-25/venezuela-s-credit-rating-cut-by-fitch-on-inflation-currency.html
History of Bolivar devaluations:
http://www.monedasdevenezuela.net/articulos/cronologia-de-la-devaluacion-del-bolivar-venezolano/
Historic Value/Black Market Rates of the Bolivar:
http://es.wikipedia.org/wiki/Anexo:Cotizaci%C3%B3n_hist%C3%B3rica_del_bol%C3%ADvar_venezolano
Economic Snapshot Venezuela 2013:
http://www.slideshare.net/miguelangelsantos/perspectivas-econmicas-de-venezuela-2013
Income and Income Distribution (GINI)
World Bank Data, Venezuela:
http://data.worldbank.org/country/venezuela-rb
World Bank Data, Chile:
http://data.worldbank.org/country/chile
World Bank Data, Colombia:
http://data.worldbank.org/country/colombia
GINI Index, World:
https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html
Our Goal is not to Make Squalids out of the Poor:
http://www.eluniversal.com/nacional-y-politica/140225/rodriguez-no-vamos-a-sacarlos-de-la-pobreza-para-que-se-vuelvan-escual
Oil/Oil Prices
PDVSA Financial Statements:
http://www.pdvsa.com/index.php?tpl=interface.sp/design/biblioteca/readdoc.tpl.html&newsid_obj_id=10919&newsid_temas=111
Historical Price of Oil, in Constant Dollars:
http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp
Industrial and Farming Collapse
Despite Official Numbers, Shortages Increase:
http://www.eluniversal.com/economia/140101/shortage-prevailed-despite-increased-agriculture-production-in-venezue
Venezuela Economy in Numbers:
http://www.indexmundi.com/venezuela/economy_profile.html
Structural Productivity Problems:
http://transitions.foreignpolicy.com/posts/2012/07/20/venezuelas_productivity_problem
Elections
Electoral results, Municipal Elections 2013:
http://es.wikipedia.org/wiki/Elecciones_municipales_de_Venezuela_de_2013
Official electoral results, Municipal and Presidential Elections 2013:
http://www.eleccionesvenezuela.com/resultados-elecciones-venezuela.php
http://www.cne.gob.ve/resultado_presidencial_2013/r/1/reg_000000.html
Concentration and influence - undermining opposition districts;
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=13&cad=rja&uact=8&ved=0CDMQFjACOAo&url=http%3A%2F%2Fwww.scielo.cl%2Fpdf%2Frevcipol%2Fv30n1%2Fart03.pdf&ei=eqBQU4XXHuH50gGStYGgBg&usg=AFQjCNFDBQAufFbiw933bnpgH6Nx8Aq_WQ
Municipal results 2013:
http://www.infobae.com/2013/12/08/1529456-elecciones-venezuela-maduro-festeja-el-interior-pero-pierde-las-capitales
Carter Center for Democracy Report on Venezuela:
https://www.cartercenter.org/news/pr/venezuela-070313.html
Carter speech in Atlanta:
http://www.globalresearch.ca/former-us-president-carter-venezuelan-electoral-system-best-in-the-world/5305779
Human Rights Watch report on Chávez:
http://www.hrw.org/reports/2008/venezuela0908/index.htm
Electoral enemies list by the Venezuela government (Human Rights Watch report)
http://www.hrw.org/reports/2008/venezuela0908/2.htm#_Toc207173131
No Negotiation or Deals
The Implosion in the US’ Backyard:
http://www.washingtonpost.com/opinions/jackson-diehl-venezuela-the-uprising-no-one-is-noticing/2014/03/03/19ab5828-9fc7-11e3-b8d8-94577ff66b28_story.html
The Revolution is Non-Negotiable:
http://www.latercera.com/noticia/mundo/2014/04/678-573208-9-maduro-asegura-que-no-habra-negociacion-o-pactos-en-dialogo-con-oposicion.shtml
http://cnnespanol.cnn.com/2014/04/10/dialogovenezuela/comment-page-1/
Shutting Down the Opposition
Close the Radios:
http://www.reuters.com/article/2009/08/01/venezuela-media-idUSN0146551720090801
Control Print Media:
http://www.upi.com/Top_News/Special/2013/09/12/Venezuelas-press-faces-closures-as-newsprint-runs-out/UPI-96431379024223/
Not a Democracy:
http://www.freedomhouse.org/report/freedom-world/2013/venezuela#.U1CrF6JYOSo
Carlos J. Rangel
The Failures of Chavismo:
https://www.facebook.com/notes/carlos-j-rangel/with-a-heavy-heart-facing-the-failures-of-chavismo/10153925730160417
The Social Explosion In Venezuela:
https://www.facebook.com/notes/carlos-j-rangel/the-social-explosion-in-venezuela/10153826072310417
Blogspot – On Iran 2009:
http://carlosjrangel.blogspot.com/2009/09/selected-essays-on-iran-election.html
Campaign Journal 2008:
http://books.google.com/books?id=MokNZ2AiVO0C&printsec=frontcover&dq=campaign+journal+2008&cd=1#v=onepage&q&f=false
