Venezuela

The ice finally begins to crack in Venezuela

International community, including China, can play a useful role

FT View

EPA
MAY 18, 2016 2:39 PM

Venezuela(http://www.ft.com/topics/places/Venezuela)isthegreatfailureofthe
westernhemisphere.Alarge,seeminglywealthy,apparentlymodernand
resourcerichcountry,onlyathreehourflightfromtheUS,isonthebrinkof
economicandpoliticalcollapse,financialdefaultand,potentially,ahumanitarian
crisis.
Alackofbasicgoodsandmedicinehasledtoprotests(http://next.ft.com/conten
t/5ef95ee01b2e11e6b286cddde55ca122)andlootings.Shortagesofforeign
currency,prioritisedtopayoverseasdebts,haveforceda40percentdropin
imports(http://next.ft.com/content/4ccbeb900e1111e6b41f0beb7e589515)in
thepastyear,accordingtoestimatesbyBankofAmericaMerrillLynch.Oil
productionisfallingandpowershortageshavecutthegovernmentsworking
weektotwodays.Inflationisforecasttotop450percentthisyear(http://next.f
t.com/content/fb3f9582009211e6ac983c15a1aa2e62),andalmost2,000per
centnext,whiletheeconomyisshrinkingatarateof8percentitsthirdyearin

recession.Howmuchlongercanthissadstateofaffairscontinue?
MorethantwothirdsofVenezuelanssaythatPresidentNicolsMaduroshould
berelievedofhisduties.Instead,heisdiggingin.Lastweek,hedeclareda60day
stateofemergency,extendableinto2017,supposedlytoprotectthecountryfrom
unnamedthreats.Inanotherdefensivemove,heorderedthearmytogoon
manoeuvres.AsoneUSintelligenceofficialhasputit:Youcanheartheice
cracking.
Thefutureisbleak.MrMadurosapprovalratinghasdroppedto26percentand
therearepersistentrumoursofapalacecoup.ThatmaybewhyMrMaduro
assumedemergencypowersitshowsheisincontrol.Thereisalsotalkofunease
amongmidlevelarmyofficers.That,inturn,maybewhyMrMadurohasordered
militarymanoeuvres,astheywoulddisruptanysubversiveplans.Anythingis
possibleinthescorpionsnestofinternalVenezuelangovernmentaffairs,which
areriddledwithcorruptionandspecialinterests.
Foreignpowershaveeveryinterestinencouragingastableoutcomeinacountry
withtheworldslargestoilreserves.Sadly,outsidershaveveryfewpointsof
purchaseonCaracas.
Onerouteshouldinvolveinternationalcondemnation,especiallybyregionalLatin
Americanorganisations,oftheexecutivessubordinationofthejudiciary.The
governmentcontrolledSupremeCourt,forexample,hasnullifiedlegislationfrom
theoppositioncontrolledNationalAssemblyeventhough94percentof
Venezuelanssaytheywouldliketoseetheexecutiveandlegislaturecooperateto
solveproblems.Whethercooperationispossibleinsuchapolarisedcountryis
anothermatter,althoughtheVaticancouldplayausefulrolehereasitdidin
Cuba.

Venezuela

(http://next.ft.com/content/0ec238
bc1b7811e6a7bcee846770ec15)

Thereshouldalsobeinternational
pressureforVenezuelatofollowthedue
processthatwouldallowforasocalled
recallreferendum(http://next.ft.com/co
ntent/0ec238bc1b7811e6a7bcee8467
70ec15)totakeplace.Thisinitiative,
whichcouldremoveMrMaduroandsee
freshelections,needs200,000
signaturestobegin.Theoppositionhas
collected1.8mbut,asvicepresident
AristobuloIsturizsaidthisweek:

How does the recall

referendum work? (htt
p://next.ft.com/conten
t/0ec238bc-1b78-11e6-a7
bc-ee846770ec15)

Madurowillnotbeoustedbya
referendumbecausetherewillbeno
referendum.

China,whichhasloanedCaracasmore
than$65bninreturnforoildeliveries,
potentiallyhasabigroletoplay.Having
Complexprocessrequires
extendedsomeoftheseloansmaturities,
approvalofgovernment
officialsinBeijingsaidthattheyhoped
dominatedelectoralcouncil
Venezuelacanproperlyhandleits
currentsituation.Areferendumisone
waytodothat.Afterall,itisaconstitutionalprocessthatevenHugoChavez
allowed.
Caracaswouldprobablycondemneventhesemildinitiativesasoutside
interference.Evenso,thetruthshouldbespoken.Atleast,itwouldexposeMr
Maduroshypocrisyandposturingforwhattheyare,andsohelpencouragethe
possibilityofhappieroutcomes.
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