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Venezuela: How could such a rich country become so poor (Part III)

Thursday March 28 2019

By LUIS FRANCESCHI
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Chavez was a new kind of neo-messiah for many… a long-awaited saviour. His charisma was magnetic…and thousands placed all their hopes on him as the key out of poverty and the gate to happiness, but this was not to be.

Sometimes the world is cruel regardless of any beautiful and appealing aspirations a country may hold dear. Venezuela has finally collapsed. There is no water, no electricity, no food... A truly sad story of 'from hero to zero…and beyond zero, to misery'.

We finished last week’s piece by explaining that Venezuela’s self-destructive governance mess started with the undermining of three essential governance pillars: Nepotism, coupled with a deep disdain for knowledge-based competence, a dysfunctional and unsustainable economic model, and the rejection of the rule of law as an essential pillar of democracy.

Improvisation and good governance

Good governance cannot be improvised. Governance and improvisation do not walk together. Improvisation is not sustainable, and when governance systems are badly thought out and poorly designed or executed, the results are tragic. Even though things may work out for a little while (perhaps by chance or miracle) it all crumbles and collapses sooner than later.

A good number of friends, including Samuel Ndirangu, have asked me repeatedly, ''what about the U.S. sanctions imposed on Venezuela? Could they have triggered the crisis?'' Was Maduro sincere when he blamed his woes and troubles on the sanctions placed by the European Union and the United States on deals with the Venezuelan oil giant PDVSA? Was he being truthful when he blamed Venezuela’s shortage of medicine on Britain’s refusal to repatriate the country’s gold reserves?

These sanctions are not the cause of Maduro’s woes, which backdate to a dysfunctional system which he inherited and made flourish. These sanctions had two different short-term effects.

First, they made the recent crisis more acute by making money-flow more difficult and complicated, with credit card transactions blocked and little cash available. Second, they have also made it more difficult for the government to steal and ransack public coffers in the face of an almost imminent implosion.

From Argentina to Mexico, from The Gambia to Congo, from The Philippines to Germany and from Spain to Nicaragua, it has always been a common pattern that failed leaders empty public coffers of gold, jewels, cash and art before taking to their heels, to secure a 'decent' future for themselves; a future that is 'commensurate' with their lavish and extravagant lifestyle.

Yet, again, how could Britain deny Venezuela its own gold? After all, why should gold reserves be kept by Britain and not by the Venezuela’s own central bank?

This is where we jump now into the exciting and contradicting world of international law. Britain could deny Venezuela’s repatriation of gold because the one making the repatriation request was not Venezuela, but Maduro, and Britain does not recognise Maduro as Venezuela’s president since January 2019.

The generals’ mess

Maduro became president after Chavez’ death in a hotly contested and controversial election in 2013. The company that created the winner spilt the beans. They added virtual voters to a vicious election. Here, I recommend the reading of Nanjala Nyabola’s book Digital Democracy, Analogue Politics.

Maduro’s popular support waned and repression increased. To ensure political survival he had to win over the military’s loyalty. He did this by creating thousands of generals…so much so that Venezuela’s army has practically become an inverted pyramid.

Just over two decades ago, Venezuela had less than 30 active generals. Today, Venezuela has almost 2,000 generals (the US Army, for example, has around 900). Most of the Venezuelan generals were promoted in a hurry (195 were appointed in one day). Their powers and benefits are unlimited. Generals head almost half of the 30 cabinet ministries and provincial governments.

Generals have also been appointed CEOs and heads of oil companies, aluminium, gold, iron ore, electricity, water, universities, etc. They did not have the knowledge and competence to run such huge and technical enterprises, but this is what inverted meritocracy does; and so, it secured loyalty. People in these circumstances owe it all to their leader, and they are ready to kill and be killed before losing or betraying the giver of the privilege and the privilege itself.

In 2018, the government called for a sort of snap election. The electoral commission, in the hands of the government, changed the date twice, and the courts, also in the hands of the government, banned all relevant opposition parties and candidates. This was the only way to prevent a repeat of the shocking defeat the government party suffered in the 2015 legislative election.

The shocking defeat that wrecked the revolution

In 2015, Maduro’s party lost the National Assembly and had to invent a parallel body (a constitutional assembly) that assumed all the powers of the National Assembly. This body was supposed to come up with a new Constitution but to this day it has never done so and it may never do…it just achieved what it was created for, to replace the National Assembly and annihilate any possible opposition.

But again, how could Britain deny Venezuela’s repatriation of gold? Because most of Venezuela’s partners and neighbours did not recognise Maduro’s snap election, with no opposition, partisan observers and the highest absenteeism in the country’s democratic history. And this is where Juan Gerardo Guaidó jumped on stage.

Juan Guaidó was little known to Venezuelans. He became president of the National Assembly on January 5, 2019, thanks to a political compromise made by opposition parties with the majority in the House. The parties have a rotational presidency every year, and 2019 was Guaidó’s turn.

Maduro’s six-year term expired on January 10, just a few days after Guaidó became president of the Assembly. Maduro’s re-election had been marred by controversy, accusations and manipulation. The end of his term, combined with a sham election, loss of people support and general discontent of neighbours and partners conspired together against Maduro’s last breath of legitimacy.

This gave the opposition a God-sent power vacuum to push little-known Guaidó into the spotlight, which was now shining on him. Maduro underestimated little-known Guaidó and went ahead and staged his second-term installation and swearing in.

This installation was boycotted by everyone outside Maduro’s very small circle of allies plus a few pretenders like the president of South Ossetia, a region of Georgia that only Russia, Nicaragua and Venezuela have recognised as a state.

The stage was now set for a power revolt backed by the Constitution, which foresees that in case of the President’s absolute absence, the president of the National Assembly shall step in. Maduro’s untimely insistence on sticking to power transformed him from president to usurper.

On January 23, in front of a majority of members of the National Assembly and thousands of supporters gathered in Caracas, Guaidó took the oath as Venezuela’s interim president. How did he do it? Was he self-proclaimed? Who is he anyway and why hasn’t Maduro arrested him?

To be continued.

Dr Luis Franceschi, Dean – Strathmore Law School, [email protected]