Venezuela’s empty elec­tion of­fers vot­ers no re­lief

Waterloo Region Record - - Insight -

From Bloomberg Opin­ion:

Elec­tions are sup­posed to en­able vot­ers to im­prove their for­tunes. Sadly, that is not the case with this week­end’s vote in Venezuela. Re­gard­less of the out­come, vot­ers can ex­pect no quick exit from their coun­try’s down­ward spi­ral.

Of­fi­cials from the United Na­tions, the Or­ga­ni­za­tion of Amer­i­can States, the Euro­pean Union, the U.S., and Venezuela’s neigh­bours have de­nounced the up­com­ing vote as flawed beyond re­demp­tion. Even if one of Pres­i­dent Nicolas Maduro’s three op­po­nents were al­lowed to win — other more pop­u­lar can­di­dates have been barred, lead­ing to a broader op­po­si­tion boy­cott — he would be ham­strung by Maduro’s al­lies. They con­trol the mil­i­tary and ef­fec­tively all branches of gov­ern­ment.

Maduro’s ten­ure has been an eco­nomic dis­as­ter. In­fla­tion will ex­ceed 13,000 per cent this year. Gross do­mes­tic prod­uct is ex­pected to shrink by 15 per cent; it has fallen by al­most 50 per cent since 2013. Venezuela has the world’s largest oil re­serves — but thanks to mis­man­age­ment, you’d never know it: By 2020, oil pro­duc­tion will be less than half of what it was in 2013. Venezuela has al­ready de­faulted on some of its debt, which stands at nearly 120 per cent of GDP.

For or­di­nary Venezue­lans, these num­bers mean daily mis­ery. Never mind short­ages of food, medicine and toi­let pa­per — even wa­ter is now in short sup­ply in Cara­cas. Nearly 3 mil­lion of Venezuela’s 8 mil­lion stu­dents have been kept out of school for want of food, elec­tric­ity, safe wa­ter and fuel for trans­port. Com­mu­ni­ca­ble dis­eases are on the rise, with malaria cases jump­ing by nearly 70 per cent last year — the world’s big­gest in­crease. Many Venezue­lans are vot­ing with their feet. If cur­rent trends con­tinue, by the end of this year close to 10 per cent of the pop­u­la­tion will have left.

Out­side pres­sure hasn’t worked. Venezuela can’t be made to ac­cept hu­man­i­tar­ian aid, and so far it has re­fused help. Its neigh­bours are dis­tracted by their own po­lit­i­cal tur­moil, and U.S. sanc­tions haven’t thrown Maduro off course. With the econ­omy col­laps­ing, he has con­tin­ued to sub­si­dize oil ship­ments to Cuba, whose se­cu­rity ser­vices have helped keep him in power.

For­mer U.S. Sec­re­tary of State Rex Tiller­son has spec­u­lated that a mil­i­tary coup might of­fer one way out. But al­most all of Venezuela’s of­fi­cers have risen through the ranks un­der Hugo Chávez and Maduro. Some have been im­pli­cated in nar­cotics traf­fick­ing and many more in the loot­ing of the econ­omy, which they now dom­i­nate. Ex­pect no guar­an­teed re­lief from that quar­ter.

The U.S., the Euro­pean Union and Venezuela’s demo­cratic neigh­bours have few new levers to pull. The so-called Lima Group (com­pris­ing Canada, Mex­ico and much of South Amer­ica) has pledged to ig­nore com­mit­ments — dur­ing any debt ne­go­ti­a­tions, for in­stance — not ap­proved by the Na­tional Assem­bly, which the op­po­si­tion con­trols and Maduro has moved to sup­plant. As far as pos­si­ble, though, any fur­ther tight­en­ing of sanc­tions should be aimed at the coun­try’s lead­er­ship rather than at Venezuela’s peo­ple. Adding to their plight would be the main draw­back of ban­ning im­ports of Venezue­lan oil, which the Trump ad­min­is­tra­tion has been con­sid­er­ing.

The end might not be that far away. Cred­i­tors are clos­ing in on Venezuela’s na­tional oil com­pany, con­fis­cat­ing as­sets and threat­en­ing to crip­ple its op­er­a­tions. Even China is re­port­edly balk­ing at ex­tend­ing the grace pe­riod on loan re­pay­ments. Foreign com­pa­nies — most re­cently, the U.S. food gi­ant Kel­logg Co. — con­tinue to flee.

Mean­while, the U.S. and Europe should do more to help the coun­tries host­ing Venezuela’s refugees. And lead­ing mem­bers of the In­ter­na­tional Mone­tary Fund — in­clud­ing China, which has lent Venezuela more than $60 bil­lion — should be plan­ning how to help Venezuela re­cover, once a gov­ern­ment ca­pa­ble of be­ing helped is in place. Until that hap­pens, out­siders have lit­tle choice but to look on in dis­may.

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