President Maduro accepts results, says counter-revolution has won; Opposition parties might win super-majority in National Assembly that could lead to removal of Maduro – Greg Wilpert and Alejandro Velasco with Paul Jay

Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to the Real News Network. I’m Paul Jay. It was just after midnight in Caracas when the president of the Venezuelan election commission announced the results of the election for the National Assembly. It was a stunning victory for the opposition that was then accepted by President Maduro. He said the elections were clean, fair, and he accepts the results. And here’s a little bit towards what we know now as of this moment, what the results are. Ninety-nine seats for the opposition parties, 46 seats for the socialist party and its allies, that’s the governing party, that’s the Chavistas, as they’re often known. And 22 undecided. That 22 undecided is very significant. The issue now with the size of the opposition victory, they are on the verge of a two-thirds supermajority. We’ll talk about this in a minute, the significance of this. They need only 12 seats to hit that supermajority. With 22 outstanding, given the current trends, it’s looking very likely that they will hit that 12 seats. And that is an earthquake in Venezuelan politics. Now joining us to discuss all of this, first of all joining us from Caracas is Greg Wilpert. Greg is the former director of TeleSur English, and author of the book Changing Venezuela by Taking Power: The History and Policies of the Chavez Government. And joining us from New York City is Alejandro Velasco. He is an associate professor of Latin American studies and history at New York University, and author of Barrio Rising: Urban Popular Politics and the Making of Modern Venezuela. Thank you both for joining us. ALEJANDRO VELASCO: Thank you. GREG WILPERT: Thanks. JAY: So Greg, kick us off, and let’s go through just the mechanics of this, and then we’ll kind of get into what you guys think is the why of it. So in terms of where we’re at, if they–right now they have, I think they’ve reached the bar of a three-fifths majority, or they’re one seat away from a three-fifths majority, and that’s very likely to happen. Assuming they hit three-fifths, what powers do they have? They being the opposition. WILPERT: Well, some of the main things is that they can remove the vice president and ministers, cabinet ministers, and they can–you need a three-fifths majority to pass an enabling law. Well, that’s not something that’s going to happen. Something that the Chavistas used to do for the president which is in law, where the president can pass laws by decree. That’s obviously not going to happen. So the main thing is really the censure of ministers and of the vice president. Much beyond that, it’s not going to have that much of an effect. The real big difference kicks in at the two-thirds majority. JAY: And the two-thirds majority means they pick up 12 of these outstanding 22 seats. Now, given the way trends are going, this seems rather likely. So if in fact they hit the supermajority, what does that mean? WILPERT: Well, then it means they can do a number of different things. For one thing, they can remove members of the Supreme Court, which is very significant because the Supreme Court itself approves or can reject laws. It can of course, you know, adjudicate on decisions about the imprisonment or impeachment processes of members of the government, including the president. And perhaps one of the most significant things, I think, that the two-thirds majority can do is can invoke a constitutional assembly and completely rewrite the constitution, basically, which would of course have to still be passed by a referendum. But they could basically walk in Chavez’s footsteps in the sense of establishing a new constitution, and thereby setting up a completely new system of governance in Venezuela, getting all the Chavistas out of the other branches of government in the process, which is what Chavez did back in 2000 in favor of his party. JAY: Now that, the Supreme Court issue is very significant. Because if they do move towards an impeachment of President Maduro, the Supreme Court if I understand it correctly also has to sign off on it. Now, if that’s correct, you’re saying they can remove members of the Supreme Court, but they can’t appoint new ones, can they? Is that not still in the hands of the president, and does that not–no, that’s not correct? WILPERT: No, the Supreme–sorry, the National Assembly also appoints–actually, they can without a constitutional assembly, they can already remove practically all the other branches of government. Venezuela has five branches of government, unlike most other Western democracies, which have three. So that is in addition to the legislature, executive, and the judiciary, Venezuela also has what you could call a prosecutorial power, which is basically the attorney general and the comptroller general, and it also has electoral power. And those are both, that is, all the other three, that is the judiciary, the electoral power, and the prosecutorial power, those three are appointed by the National Assembly, not by the president, like in the United States. JAY: So it’s not just a question of the power to remove, it’s also the power to appoint. They can actually replace everybody. WILPERT: Exactly. JAY: Alejandro, this is, it’s looking this way–as I say, as we’re shooting this. We don’t know for sure, but it’s certainly looking–do you agree it’s looking this way, that we are heading towards a supermajority? Am I stepping ahead of myself here? Or are we looking at that? VELASCO: Well, the polls, the ones that have come in and have been partially announced by both the parties and the national electoral council do suggest the tendency is towards a supermajority. One of the reasons why is because some of the, some of the too-close-to-call districts, apparently the news is that the electronic balloting failed, and so the had to move on to paper balloting. And so some of those are in rural districts, which then have to be flown into Caracas and counted. And so the tendency does seem to be towards a supermajority of the opposition, but it’s very close, for sure. JAY: President Maduro has accepted the results. There was all kinds of speculation and innuendo in the American press, and certainly the Venezuelan opposition. They were calling fraud before the vote ever took place. They were saying that the Venezuelan government would never accept these results, but he has. What do you make of that? VELASCO: Well, I think two things are important here. Number one, this election now marks one additional point of evidence in a long trend in elections over the last few months in Latin America and elsewhere, where polling has been pretty wrong. I don’t think anybody really predicted this level of a majority. We’re kind of in uncharted waters here. But number two, I think what it bodes in terms of accepting a defeat of this magnitude, for sure is a sense by which Maduro now has to position himself and Chavismo as a political movement that needs to outlive this particular defeat. And in order to do that you have to first begin by acknowledging the defeat, and then being able to sort of rebuild from there [process], right. So this certainly bodes well. What will be interesting to see how, is how the opposition responds to it, and also as you suggested, how the international players respond to it, to the government’s accepting of the results. JAY: Greg, you suggested that a constitutional convention could be called by the opposition. Given they have so much power within the existing constitution to change all the various people in the various branches of government, the leadership, and the power to impeach the president, why go for a change of the constitution? Why not just proceed based on the current one? WILPERT: Well, because it would be much faster. That is, if they try to remove, first remove people from their current positions and then put in new ones, both of those processes could take months and months, and they’re very impatient. And so that’s why I think the temptation to go for the constitutional convention route would be extremely strong within the opposition. As a matter of fact, a number of opposition people have already speculated about that, going that route, as a possibility that’s come up over the years many times. Matter of fact, they’ve even talked about it, trying to initiate it from a grassroots perspective. That is, to collect enough signatures in order to do it. But now they don’t need to do that. If they have a two-thirds majority, that is, they can just vote on it. JAY: And you were saying to me off-camera that if they wait too long and it becomes an impeachment proceeding that goes on for a long time, there’s a certain date where if President Maduro’s impeached, then the socialist party vice president would just take over. Whereas if they do it sooner than later, then it would force the removal of the president and a new presidential election. WILPERT: Right. The Venezuelan system is a little bit strange in that way. So actually they can actually remove the vice president. But if they remove the vice president twice, then a new National Assembly election is called. So it’s a risky game, and so–and not only that, the president, there would be a new election only if the president is removed before the last two years of his office, like you said. And I think that would be towards the end of 2016, if I calculate correctly. JAY: Alejandro, President Maduro, both in accepting the results of the election but also during the campaign, he made the main case that the reason for the problems in the economy, and clearly that’s the reason the socialist party has lost the election, because the economy’s in such bad shape. High inflation, shortages of goods. He made a case that this was all a war on the Venezuelan economy by external players, meaning the United States and others. Also the elites within Venezuela. There’s a 74.5 percent participation rate in this vote. People thought, or at least some people speculated, that a high turnout might benefit the government. It doesn’t seem to have. It seems like a lot of people did not buy the argument that it’s primarily an economic war against Venezuela that is the source of the problem, and they seem to be blaming the government. What do you make of that? VELASCO: It’s unsurprising. Polls have been pointing in that direction for a long time already, that the argument about an economic war was not seeping into the bulk of the population. And that discourse is always problematic, because of course if you continue going on with it then the longer you hold on to that particular kind of claim, the longer you’re admitting that you’re losing the war. So I think that it’s [undermined] credibility on the part of the government. But something you said I think is really significant. As big as this victory is for the opposition, [22] seats, it also implies a tremendous risk in terms of reading this as a vote for the opposition rather than a vote of castigo, punishment vote, against the government. And that, I think, implies significant challenges for the opposition coalition, which is already very fractured internally and has a tremendous amount of diversity in terms of policy positions, et cetera, to be able to read this as a sort of unitary sentiment in support of an alternative that remains extremely diffuse rather than sort of a rejection of Maduro. Which it should also be said is not necessarily a rejection of Chavismo, per se. JAY: Greg, to what extent do you think this is the result of economic war, or the inability of the Maduro government to solve the economic problems? WILPERT: Well, I think it really boils down to what do you mean by economic war? The government seems to always imply that there’s a kind of a conspiracy going on that is undermining the government. And I think there’s certainly an element of that. Certainly that plays a role. But what I think is a much more important component is that the government introduced a variety of policies that went against certain vested interests in Venezuela. Particularly I’m thinking of things that started back in 2001 and 2002, which was the land reform and taking over the oil industry, which led to the coup attempt and to the oil industry shutdown, which led to–you know, there’s a whole series of events that one has to look at that led them to a currency control in order to control capital flight. And it’s this currency control that I think is the crux of the problem. And I think it was a necessary measure, given the capital flight that happened in the wake of the coup attempt and the oil industry shutdown. But that currency control, that exchange rate control was never lifted afterwards. And that’s what I think is really the key problem. In many ways it was successful policy, led to four years of continuous, ten percent-plus economic growth, tremendous redistribution of wealth. Decline of poverty, and so on. So in that sense it seemed to be a very successful policy. However, it entered into dangerous territory once the price of oil came down in 2008, and then again in 2013. And that’s when that policy became unmanageable, and created a lot of opportunities for people to make a tremendous amount of money out of the black market for the currency and out of black market for price controlled goods. JAY: And if I understand it correctly, if you’re within various sections of the business community elites and you can get hold of the official exchange rate dollars, which is what, 12-15, roughly speaking, Bolivars to the dollar. And now black market, what is it, 300, 400, 500. If you can buy them low and go out in the black market and sell them, it’s a very lucrative business. WILPERT: Yes, exactly. It’s extremely lucrative. Or you can claim that you’re importing something and then actually not importing it, or import it and then export it again, and sell it. Or buy things that are imported at the low rate and at the price controlled rate, and then export them and sell them in Colombia or Brazil at up to 100 times what they cost in Venezuela. And so it is these, you know, economic opportunities for smuggling and for arbitrage, and for basically cheating, that the economic situation has created. And like I said, that economic situation is actually a result of what were at first beneficial policies. It’s just that they weren’t really dealt with in moments of crisis, particularly when the price of oil went down in 2008 and 2013. JAY: Alejandro, there seems to be a kind of paralysis of some sort. In the last couple of years this trend towards this very high inflation, almost I think some people are saying one of the highest inflation rates in the world, now great shortages of food. Black market currency, and so on. But there seems to have been very little change in policy the last couple of years. And not much planning for a steep drop in the price of oil that seems to have caught everyone by surprise. And I guess to some extent, that’s true for the whole world. A few years ago I guess nobody would have predicted plus-$100 oil would go to under $40 a barrel. But that being said, there doesn’t seem to have been much of a response the last couple of years to all of this by the government. VELASCO: That’s exactly right. I mean, welcome to, welcome to a petrostate. This is sort of a tired dynamic, especially in Venezuela, where periods of boom are not met with a significant degree of planning long-term, but rather with significant amounts of investment in the short-term that don’t anticipate for those inevitable busts when they come. I think the challenge in the case of Chavismo is that it took this dynamic but it expanded it, precisely because instead of focusing some of those resources towards productive sectors of the economy, primarily it was using those to lift, as Greg was mentioning, lift the population out of poverty through direct [addition] of resources and services of the state in ways that certainly hadn’t benefited them in the past. [Other] sectors of the population. Once oil prices dropped as far as they did, then what Venezuela’s left with is a very weakened domestic productive apparatus to be able to satisfy the enormous demand for imports that Venezuela relies on. At the same time, the timing of that drop in prices meant that the government rarely had a very limited number of tools available to it to withstand the political storm that would come by implementing very severe economic measures, like for instance, devaluing the currency, eliminating the subsidy for gasoline. Eliminating subsidies for social programs, et cetera. And so now, of course, all of these measures are on the table. And it would be interesting to see if the government brings the opposition to the fold in terms of enacting some of these measures, which will be very painful in the short-term, and somehow be able to place some of the blame on those reforms to, onto the opposition. JAY: Greg, you’ve written an article recently, and if I understand your main argument has been as long as subsidized food can be exported, or I should say smuggled, into neighboring countries, you really can’t be subsidizing the cost of food. What you really need to do is let wages go up so people can afford more market-rate prices. Explain that, and is it too late for them to try something like that? WILPERT: I think that’s the only solution. Because right now the prices within Venezuela are absolutely crazy. I mean, when I go out I can get, I mean, you mentioned for example the exchange rate before. It’s 800–actually right now, the black market exchange rate is closer to 800 Bolivars to the dollar, whereas the two official exchange rates are at 6 and 12 Bolivars to the dollar. There’s a third one that’s about 200, but I think that’s hardly ever being used. So if you–so there’s some products, especially price-controlled products, that you can get. But you have to stand in long lines, if you can find them, for dirt cheap. The 800 Bolivar exchange rate, I mean, they’re worth pennies for, let’s say, I don’t know, two dozen eggs, or something. JAY: If you have dollars to begin with. WILPERT: Yeah. I’m saying the equivalent of somebody, let’s say like me, who’s coming in with dollars, would be the equivalent of pennies. Or–. JAY: But if your only income is Bolivars, you’re screwed. WILPERT: Right. Well, no. You can–no. If you actually get it at that price it’s a decent price, and you buy it. The thing is, it’s such a good price that everybody tries to buy it. So then you have to start rationing it, and telling people, well, you can only buy it on certain days, and things like that. Or what also happens is people who don’t really need that product buy it up and then sell it, you know, turn around and sell it for ten times that price on the black market. And the reason they can do that is because if they, they could also sell it to Colombia, where they’ll get 50 times the price. And so in other words, the neighboring countries essentially raise the price of the black market, in effect. Not all the way to the level of in the neighboring countries, but the temptation is tremendous for someone to take these price-controlled products right out of the country again because of the hundred-fold profit that they could make. And no government could survive with such a huge disparity between the prices within the country and outside of the country. And so that really needs to be addressed. And the only way I can see that being addressed is by raising prices, but I think I’m obviously also raising salaries. In other words, taking the subsidy away from the prices and the products, and putting it into, into incomes. JAY: Right. Alejandro, just to sort of wind things up, at least something like around 40 percent of the people that voted voted in favor of the socialist government. There’s a lot of young people who might not have been even old enough to vote who are very Chavista and pro-government. How is this all going to unfold? These are millions of people that are not going to be, perhaps, so willing as President Maduro says he is to accept the end of a Chavista government. VELASCO: Yeah, I mean, that is the, the million-dollar question right now. I think that much will depend on what the opposition does. I think that is, it moves very quickly along the lines of what Greg was describing before, especially in terms of the [constitutional] assembly. Calling for a constitutional assembly. I think this may be read by some of those–not even those who voted for the government, but those who voted against the government, not necessarily because they sort of supported an opposition platform, which is really [inexistent]. I think those are the factors that you really need to sort of pay attention to. A case of a constituent assembly that is framed in the context of getting rid of everything that Chavismo stood for, I think that will be met with considerable, considerable opposition on the part of those populations, which will then have the appeal or be able to reach to sectors that have shown themselves to be [truly] supportive of the government, even in these dire straits. So you know, so I think that this, this result, actually comes with a tremendous amount of caveats for the opposition. And time will tell if they read it as such or if they overreach. JAY: Greg, just finally on a somewhat similar note. I mean, if in fact the opposition at the end of this whole process winds up winning the government and the presidency, given who they are, one would expect them to head towards kind of neoliberal policies, austerity policies. And with millions of such politicized people who have been supporting the government, I mean, Venezuela starts to get ungovernable. WILPERT: Yes. I think–that’s one of the things that Chavez often said of himself. He said that I’m the guarantee for the governability of the country. The opposition never really understood what that meant. But what he means is exactly kind of what you’re implying, is that when the opposition comes into office, the country will become ungovernable. And not through any fault of Chavez’s, but just because they would head in a direction that most of the population would probably not like. But I should also mention in relation to that is that one of the big problems that the opposition has, and Alejandro mentioned this, actually, but I just wanted to emphasize this, that the opposition is extremely internally divided. And so they’re going to have a terribly difficult time if they take the constitutional convention route, to even agree on a new constitution. And that could drag out forever. Chavez was, you know, he was able to bring people together, was able to put together a constitution in record time, like three or four months. The kind of, the opposition, would never be able to do something like that. And not only that, they would probably have a hell of a time even agreeing on who the presidential candidate is, and what their political program will be. And so that’s, those are the huge challenges that they’re facing at this point. JAY: All right, gentlemen, thank you both for joining us. VELASCO: Thank you. WILPERT: Thank you. JAY: And thank you for joining us on the Real News Network.

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Opposition Landslide in Venezuela – Maduro Accepts Results

by TRNN, The Real News Network
December 7, 2015

<h1>Opposition Landslide in Venezuela – Maduro Accepts Results</h1> <p class="byline">by TRNN, The Real News Network <br />December 7, 2015</p> <p>https://www.youtube.com/watch?v=ZboE3RxCagU</p> <p>President Maduro accepts results, says counter-revolution has won; Opposition parties might win super-majority in National Assembly that could lead to removal of Maduro – Greg Wilpert and Alejandro Velasco with Paul Jay</p> <hr class="wp-block-separator" /> <h2>Story Transcript</h2> <p>PAUL JAY, SENIOR EDITOR, TRNN: Welcome to the Real News Network. I’m Paul Jay.</p> <p>It was just after midnight in Caracas when the president of the Venezuelan election commission announced the results of the election for the National Assembly. It was a stunning victory for the opposition that was then accepted by President Maduro. He said the elections were clean, fair, and he accepts the results. And here’s a little bit towards what we know now as of this moment, what the results are. Ninety-nine seats for the opposition parties, 46 seats for the socialist party and its allies, that’s the governing party, that’s the Chavistas, as they’re often known. And 22 undecided.</p> <p>That 22 undecided is very significant. The issue now with the size of the opposition victory, they are on the verge of a two-thirds supermajority. We’ll talk about this in a minute, the significance of this. They need only 12 seats to hit that supermajority. With 22 outstanding, given the current trends, it’s looking very likely that they will hit that 12 seats. And that is an earthquake in Venezuelan politics.</p> <p>Now joining us to discuss all of this, first of all joining us from Caracas is Greg Wilpert. Greg is the former director of TeleSur English, and author of the book Changing Venezuela by Taking Power: The History and Policies of the Chavez Government. And joining us from New York City is Alejandro Velasco. He is an associate professor of Latin American studies and history at New York University, and author of Barrio Rising: Urban Popular Politics and the Making of Modern Venezuela. Thank you both for joining us.</p> <p>ALEJANDRO VELASCO: Thank you.</p> <p>GREG WILPERT: Thanks.</p> <p>JAY: So Greg, kick us off, and let’s go through just the mechanics of this, and then we’ll kind of get into what you guys think is the why of it. So in terms of where we’re at, if they–right now they have, I think they’ve reached the bar of a three-fifths majority, or they’re one seat away from a three-fifths majority, and that’s very likely to happen. Assuming they hit three-fifths, what powers do they have? They being the opposition.</p> <p>WILPERT: Well, some of the main things is that they can remove the vice president and ministers, cabinet ministers, and they can–you need a three-fifths majority to pass an enabling law. Well, that’s not something that’s going to happen. Something that the Chavistas used to do for the president which is in law, where the president can pass laws by decree. That’s obviously not going to happen.</p> <p>So the main thing is really the censure of ministers and of the vice president. Much beyond that, it’s not going to have that much of an effect. The real big difference kicks in at the two-thirds majority.</p> <p>JAY: And the two-thirds majority means they pick up 12 of these outstanding 22 seats. Now, given the way trends are going, this seems rather likely. So if in fact they hit the supermajority, what does that mean?</p> <p>WILPERT: Well, then it means they can do a number of different things. For one thing, they can remove members of the Supreme Court, which is very significant because the Supreme Court itself approves or can reject laws. It can of course, you know, adjudicate on decisions about the imprisonment or impeachment processes of members of the government, including the president. </p> <p>And perhaps one of the most significant things, I think, that the two-thirds majority can do is can invoke a constitutional assembly and completely rewrite the constitution, basically, which would of course have to still be passed by a referendum. But they could basically walk in Chavez’s footsteps in the sense of establishing a new constitution, and thereby setting up a completely new system of governance in Venezuela, getting all the Chavistas out of the other branches of government in the process, which is what Chavez did back in 2000 in favor of his party.</p> <p>JAY: Now that, the Supreme Court issue is very significant. Because if they do move towards an impeachment of President Maduro, the Supreme Court if I understand it correctly also has to sign off on it. Now, if that’s correct, you’re saying they can remove members of the Supreme Court, but they can’t appoint new ones, can they? Is that not still in the hands of the president, and does that not–no, that’s not correct?</p> <p>WILPERT: No, the Supreme–sorry, the National Assembly also appoints–actually, they can without a constitutional assembly, they can already remove practically all the other branches of government. Venezuela has five branches of government, unlike most other Western democracies, which have three. So that is in addition to the legislature, executive, and the judiciary, Venezuela also has what you could call a prosecutorial power, which is basically the attorney general and the comptroller general, and it also has electoral power. And those are both, that is, all the other three, that is the judiciary, the electoral power, and the prosecutorial power, those three are appointed by the National Assembly, not by the president, like in the United States.</p> <p>JAY: So it’s not just a question of the power to remove, it’s also the power to appoint. They can actually replace everybody.</p> <p>WILPERT: Exactly.</p> <p>JAY: Alejandro, this is, it’s looking this way–as I say, as we’re shooting this. We don’t know for sure, but it’s certainly looking–do you agree it’s looking this way, that we are heading towards a supermajority? Am I stepping ahead of myself here? Or are we looking at that?</p> <p>VELASCO: Well, the polls, the ones that have come in and have been partially announced by both the parties and the national electoral council do suggest the tendency is towards a supermajority. One of the reasons why is because some of the, some of the too-close-to-call districts, apparently the news is that the electronic balloting failed, and so the had to move on to paper balloting. And so some of those are in rural districts, which then have to be flown into Caracas and counted. And so the tendency does seem to be towards a supermajority of the opposition, but it’s very close, for sure.</p> <p>JAY: President Maduro has accepted the results. There was all kinds of speculation and innuendo in the American press, and certainly the Venezuelan opposition. They were calling fraud before the vote ever took place. They were saying that the Venezuelan government would never accept these results, but he has. What do you make of that?</p> <p>VELASCO: Well, I think two things are important here. Number one, this election now marks one additional point of evidence in a long trend in elections over the last few months in Latin America and elsewhere, where polling has been pretty wrong. I don’t think anybody really predicted this level of a majority. We’re kind of in uncharted waters here.</p> <p>But number two, I think what it bodes in terms of accepting a defeat of this magnitude, for sure is a sense by which Maduro now has to position himself and Chavismo as a political movement that needs to outlive this particular defeat. And in order to do that you have to first begin by acknowledging the defeat, and then being able to sort of rebuild from there [process], right. So this certainly bodes well. What will be interesting to see how, is how the opposition responds to it, and also as you suggested, how the international players respond to it, to the government’s accepting of the results.</p> <p>JAY: Greg, you suggested that a constitutional convention could be called by the opposition. Given they have so much power within the existing constitution to change all the various people in the various branches of government, the leadership, and the power to impeach the president, why go for a change of the constitution? Why not just proceed based on the current one?</p> <p>WILPERT: Well, because it would be much faster. That is, if they try to remove, first remove people from their current positions and then put in new ones, both of those processes could take months and months, and they’re very impatient. And so that’s why I think the temptation to go for the constitutional convention route would be extremely strong within the opposition. As a matter of fact, a number of opposition people have already speculated about that, going that route, as a possibility that’s come up over the years many times. Matter of fact, they’ve even talked about it, trying to initiate it from a grassroots perspective. That is, to collect enough signatures in order to do it. But now they don’t need to do that. If they have a two-thirds majority, that is, they can just vote on it.</p> <p>JAY: And you were saying to me off-camera that if they wait too long and it becomes an impeachment proceeding that goes on for a long time, there’s a certain date where if President Maduro’s impeached, then the socialist party vice president would just take over. Whereas if they do it sooner than later, then it would force the removal of the president and a new presidential election.</p> <p>WILPERT: Right. The Venezuelan system is a little bit strange in that way. So actually they can actually remove the vice president. But if they remove the vice president twice, then a new National Assembly election is called. So it’s a risky game, and so–and not only that, the president, there would be a new election only if the president is removed before the last two years of his office, like you said. And I think that would be towards the end of 2016, if I calculate correctly.</p> <p>JAY: Alejandro, President Maduro, both in accepting the results of the election but also during the campaign, he made the main case that the reason for the problems in the economy, and clearly that’s the reason the socialist party has lost the election, because the economy’s in such bad shape. High inflation, shortages of goods. He made a case that this was all a war on the Venezuelan economy by external players, meaning the United States and others. Also the elites within Venezuela. There’s a 74.5 percent participation rate in this vote. People thought, or at least some people speculated, that a high turnout might benefit the government. It doesn’t seem to have. It seems like a lot of people did not buy the argument that it’s primarily an economic war against Venezuela that is the source of the problem, and they seem to be blaming the government. What do you make of that?</p> <p>VELASCO: It’s unsurprising. Polls have been pointing in that direction for a long time already, that the argument about an economic war was not seeping into the bulk of the population. And that discourse is always problematic, because of course if you continue going on with it then the longer you hold on to that particular kind of claim, the longer you’re admitting that you’re losing the war. So I think that it’s [undermined] credibility on the part of the government. But something you said I think is really significant. As big as this victory is for the opposition, [22] seats, it also implies a tremendous risk in terms of reading this as a vote for the opposition rather than a vote of castigo, punishment vote, against the government.</p> <p>And that, I think, implies significant challenges for the opposition coalition, which is already very fractured internally and has a tremendous amount of diversity in terms of policy positions, et cetera, to be able to read this as a sort of unitary sentiment in support of an alternative that remains extremely diffuse rather than sort of a rejection of Maduro. Which it should also be said is not necessarily a rejection of Chavismo, per se.</p> <p>JAY: Greg, to what extent do you think this is the result of economic war, or the inability of the Maduro government to solve the economic problems?</p> <p>WILPERT: Well, I think it really boils down to what do you mean by economic war? The government seems to always imply that there’s a kind of a conspiracy going on that is undermining the government. And I think there’s certainly an element of that. Certainly that plays a role. But what I think is a much more important component is that the government introduced a variety of policies that went against certain vested interests in Venezuela. Particularly I’m thinking of things that started back in 2001 and 2002, which was the land reform and taking over the oil industry, which led to the coup attempt and to the oil industry shutdown, which led to–you know, there’s a whole series of events that one has to look at that led them to a currency control in order to control capital flight.</p> <p>And it’s this currency control that I think is the crux of the problem. And I think it was a necessary measure, given the capital flight that happened in the wake of the coup attempt and the oil industry shutdown. But that currency control, that exchange rate control was never lifted afterwards. And that’s what I think is really the key problem. In many ways it was successful policy, led to four years of continuous, ten percent-plus economic growth, tremendous redistribution of wealth. Decline of poverty, and so on. So in that sense it seemed to be a very successful policy.</p> <p>However, it entered into dangerous territory once the price of oil came down in 2008, and then again in 2013. And that’s when that policy became unmanageable, and created a lot of opportunities for people to make a tremendous amount of money out of the black market for the currency and out of black market for price controlled goods.</p> <p>JAY: And if I understand it correctly, if you’re within various sections of the business community elites and you can get hold of the official exchange rate dollars, which is what, 12-15, roughly speaking, Bolivars to the dollar. And now black market, what is it, 300, 400, 500. If you can buy them low and go out in the black market and sell them, it’s a very lucrative business.</p> <p>WILPERT: Yes, exactly. It’s extremely lucrative. Or you can claim that you’re importing something and then actually not importing it, or import it and then export it again, and sell it. Or buy things that are imported at the low rate and at the price controlled rate, and then export them and sell them in Colombia or Brazil at up to 100 times what they cost in Venezuela.</p> <p>And so it is these, you know, economic opportunities for smuggling and for arbitrage, and for basically cheating, that the economic situation has created. And like I said, that economic situation is actually a result of what were at first beneficial policies. It’s just that they weren’t really dealt with in moments of crisis, particularly when the price of oil went down in 2008 and 2013.</p> <p>JAY: Alejandro, there seems to be a kind of paralysis of some sort. In the last couple of years this trend towards this very high inflation, almost I think some people are saying one of the highest inflation rates in the world, now great shortages of food. Black market currency, and so on. But there seems to have been very little change in policy the last couple of years. And not much planning for a steep drop in the price of oil that seems to have caught everyone by surprise. And I guess to some extent, that’s true for the whole world. A few years ago I guess nobody would have predicted plus-$100 oil would go to under $40 a barrel.</p> <p>But that being said, there doesn’t seem to have been much of a response the last couple of years to all of this by the government.</p> <p>VELASCO: That’s exactly right. I mean, welcome to, welcome to a petrostate. This is sort of a tired dynamic, especially in Venezuela, where periods of boom are not met with a significant degree of planning long-term, but rather with significant amounts of investment in the short-term that don’t anticipate for those inevitable busts when they come.</p> <p>I think the challenge in the case of Chavismo is that it took this dynamic but it expanded it, precisely because instead of focusing some of those resources towards productive sectors of the economy, primarily it was using those to lift, as Greg was mentioning, lift the population out of poverty through direct [addition] of resources and services of the state in ways that certainly hadn’t benefited them in the past. [Other] sectors of the population. Once oil prices dropped as far as they did, then what Venezuela’s left with is a very weakened domestic productive apparatus to be able to satisfy the enormous demand for imports that Venezuela relies on.</p> <p>At the same time, the timing of that drop in prices meant that the government rarely had a very limited number of tools available to it to withstand the political storm that would come by implementing very severe economic measures, like for instance, devaluing the currency, eliminating the subsidy for gasoline. Eliminating subsidies for social programs, et cetera.</p> <p>And so now, of course, all of these measures are on the table. And it would be interesting to see if the government brings the opposition to the fold in terms of enacting some of these measures, which will be very painful in the short-term, and somehow be able to place some of the blame on those reforms to, onto the opposition.</p> <p>JAY: Greg, you’ve written an article recently, and if I understand your main argument has been as long as subsidized food can be exported, or I should say smuggled, into neighboring countries, you really can’t be subsidizing the cost of food. What you really need to do is let wages go up so people can afford more market-rate prices. Explain that, and is it too late for them to try something like that?</p> <p>WILPERT: I think that’s the only solution. Because right now the prices within Venezuela are absolutely crazy. I mean, when I go out I can get, I mean, you mentioned for example the exchange rate before. It’s 800–actually right now, the black market exchange rate is closer to 800 Bolivars to the dollar, whereas the two official exchange rates are at 6 and 12 Bolivars to the dollar. There’s a third one that’s about 200, but I think that’s hardly ever being used.</p> <p>So if you–so there’s some products, especially price-controlled products, that you can get. But you have to stand in long lines, if you can find them, for dirt cheap. The 800 Bolivar exchange rate, I mean, they’re worth pennies for, let’s say, I don’t know, two dozen eggs, or something.</p> <p>JAY: If you have dollars to begin with.</p> <p>WILPERT: Yeah. I’m saying the equivalent of somebody, let’s say like me, who’s coming in with dollars, would be the equivalent of pennies. Or–.</p> <p>JAY: But if your only income is Bolivars, you’re screwed.</p> <p>WILPERT: Right. Well, no. You can–no. If you actually get it at that price it’s a decent price, and you buy it. The thing is, it’s such a good price that everybody tries to buy it. So then you have to start rationing it, and telling people, well, you can only buy it on certain days, and things like that. Or what also happens is people who don’t really need that product buy it up and then sell it, you know, turn around and sell it for ten times that price on the black market. And the reason they can do that is because if they, they could also sell it to Colombia, where they’ll get 50 times the price.</p> <p>And so in other words, the neighboring countries essentially raise the price of the black market, in effect. Not all the way to the level of in the neighboring countries, but the temptation is tremendous for someone to take these price-controlled products right out of the country again because of the hundred-fold profit that they could make. And no government could survive with such a huge disparity between the prices within the country and outside of the country. And so that really needs to be addressed. And the only way I can see that being addressed is by raising prices, but I think I’m obviously also raising salaries. In other words, taking the subsidy away from the prices and the products, and putting it into, into incomes.</p> <p>JAY: Right. Alejandro, just to sort of wind things up, at least something like around 40 percent of the people that voted voted in favor of the socialist government. There’s a lot of young people who might not have been even old enough to vote who are very Chavista and pro-government. How is this all going to unfold? These are millions of people that are not going to be, perhaps, so willing as President Maduro says he is to accept the end of a Chavista government.</p> <p>VELASCO: Yeah, I mean, that is the, the million-dollar question right now. I think that much will depend on what the opposition does. I think that is, it moves very quickly along the lines of what Greg was describing before, especially in terms of the [constitutional] assembly. Calling for a constitutional assembly. I think this may be read by some of those–not even those who voted for the government, but those who voted against the government, not necessarily because they sort of supported an opposition platform, which is really [inexistent]. I think those are the factors that you really need to sort of pay attention to.</p> <p>A case of a constituent assembly that is framed in the context of getting rid of everything that Chavismo stood for, I think that will be met with considerable, considerable opposition on the part of those populations, which will then have the appeal or be able to reach to sectors that have shown themselves to be [truly] supportive of the government, even in these dire straits. So you know, so I think that this, this result, actually comes with a tremendous amount of caveats for the opposition. And time will tell if they read it as such or if they overreach.</p> <p>JAY: Greg, just finally on a somewhat similar note. I mean, if in fact the opposition at the end of this whole process winds up winning the government and the presidency, given who they are, one would expect them to head towards kind of neoliberal policies, austerity policies. And with millions of such politicized people who have been supporting the government, I mean, Venezuela starts to get ungovernable.</p> <p>WILPERT: Yes. I think–that’s one of the things that Chavez often said of himself. He said that I’m the guarantee for the governability of the country. The opposition never really understood what that meant. But what he means is exactly kind of what you’re implying, is that when the opposition comes into office, the country will become ungovernable. And not through any fault of Chavez’s, but just because they would head in a direction that most of the population would probably not like.</p> <p>But I should also mention in relation to that is that one of the big problems that the opposition has, and Alejandro mentioned this, actually, but I just wanted to emphasize this, that the opposition is extremely internally divided. And so they’re going to have a terribly difficult time if they take the constitutional convention route, to even agree on a new constitution. And that could drag out forever. Chavez was, you know, he was able to bring people together, was able to put together a constitution in record time, like three or four months. The kind of, the opposition, would never be able to do something like that. And not only that, they would probably have a hell of a time even agreeing on who the presidential candidate is, and what their political program will be. And so that’s, those are the huge challenges that they’re facing at this point.</p> <p>JAY: All right, gentlemen, thank you both for joining us.</p> <p>VELASCO: Thank you.</p> <p>WILPERT: Thank you.</p> <p>JAY: And thank you for joining us on the Real News Network.</p> <h3>End</h3> <p><i>DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.</i></p> <hr /> <p>This <a target="_blank" href="https://therealnews.com/panel1206venez">article</a> first appeared on <a target="_blank" href="https://therealnews.com">The Real News Network</a> and is republished here under a Creative Commons license.<img src="https://i0.wp.com/therealnews.com/wp-content/uploads/2021/11/cropped-TRNN-2021-logomark-square.png?fit=150%2C150&amp;ssl=1" style="width:1em;height:1em;margin-left:10px;"><img id="republication-tracker-tool-source" src="https://therealnews.com/?republication-pixel=true&post=130863&amp;ga4=G-7LYS8R7V51" style="width:1px;height:1px;"></p> Copy to Clipboard

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