Tag Archives: Venezuela

Threat Assessment on Venezuela

Context

Since the arrival of Hugo Chávez to power in 1998, and after 13 years of economic and political reorganization of the country according to his “Bolivarian Revolution”, Venezuela has widely depended on oil revenue, which represented the 93 percent of the country’s exports in 2008, and generated an income between $90 and $100 billion, which helped Chavez with its social projects and the large share of imports.

The global economic crisis hit Venezuela strongly due to the drop in oil prices, altering the Venezuelan trade balance. The economic difficulties Venezuela has been facing since then, with a 475 percent inflation and a 10 percent fall in its GDP for 2016, have led to the current situation of shortage of basic commodities for the population, and political and social crisis affecting the country.

Far from self-criticism, Nicolás Maduro accuses the opposition and citizens who demonstrate against its government of the situation and of being part of an international plot to overthrow him. This has led to the polarization of the Venezuelan society in two blocs, Chavez’s supporters or pro-government seeking to perpetuate the spirit of Chavez’s “Bolivarian Revolution”, and opposition groups, that blame the government of the disastrous economic situation and seek to dismiss Maduro.

The situation has become critical recently, since the opposition appears more united than ever and has received more support from the international community and the citizenship, which gave them the absolute majority in the National Assembly in the past elections, and tries to relieve Maduro from power. Maduro has responded authoritatively delaying regional elections and even dismantling the National Assembly’s powers. The opposition and the population, tired of the growing situation of poverty, take the streets constantly demanding the resignation of the president, who accuses them of coup and responds with brute force by the police, the army and even pro-government paramilitary armed groups, provoking clashes that have caused 28 dead in April.

Objective 

The objective of this analysis is to glimpse the way in which the situation in Venezuela might evolve in the coming months. For that purpose, different scenarios will be generated using the cone of plausibility method according to the key indicators of the Venezuelan crisis, which are: economy, popular support and mobilization, military support, pro-government political forces unity, opposition unity and international influence.

Baseline scenario

Low oil prices are still devastating the Venezuelan economy, which is unable to provide commodities to the people, which demands, along with the opposition groups, the resignation of Nicolás Maduro for his handling of the crisis. The president, supported by the ruling party and the military, refuses to resign and accuses the opposition of coup attempt, which translates into strong repression of the demonstrations that causes casualties; meanwhile, the government is criticized by the international community, and tries to find an exit to the economic situation the country is facing.

Plausible Scenario 1

The discontent of the population, which starts to live in poverty conditions ever seen in Venezuela, has grown at an astonishing rate and has shown the little support Maduro has in the streets. Considering the popular discontent, the army begins to show itself increasingly neutral in the situation and, although it promises to maintain peace, it does not swear loyalty to the president. At the same time, members of the ruling party have created a current that seeks the internal overthrown of Maduro to save the image of the party for future elections.

Plausible Scenario 2

The implementation of negotiations between the government and the opposition, made the parties conforming the opposition to dissent around the demands they should ask the president. While some were clamouring for his resignation, others accepted other gestures such as the call for regional elections. The opposition’s division led to a demobilization of the population, which showed distrust to the parties asking only for the dismissal of Maduro at all costs. The social situation remains tense, but stable and contained, while the government has obtained more time to improve the economic situation at the expense of some regional governments that have fallen into the hands of opposition groups.

Plausible Scenario 3

The aggravated situation of poverty, because of a government that still does not know how to alleviate the economic crisis, has led to larger protests on the streets and has reduced popular support of president Nicolás Maduro. The president, who has the loyalty of the military and the ruling party, hardest repressed protests, increasing the number of dead to hundreds. Violent clashes and the refusal of the president to call for elections have led certain opposition groups and population to face the police and military by armed means. The government foresees an escalation of the situation after losing certain localities at the hand of such groups, which declared themselves free from central government’s control. The international community is already talking about civil war and the situation is being taken to the Security Council, with Venezuelan traditional allies, such as Russia, considering its neutrality on passing sanctions against the Caribbean country.

Wildcard Scenario

Social protests rise and president Maduro’s immobility led a sector of the army to question its generals and prepared a coup that overthrew pro-government commands. Straightaway, they ousted Maduro from power and maintain the status quo in the streets because of the strong protests of Maduro supporters and pro-government paramilitary forces. New commanders of the army have instituted the state of emergency until further notice.

Hyperinflation in Venezuela: recent events and current outlook

December was not a good month for the Venezuelan people. The power political reverberations of former President Hugo Chavez’ death have reached a new climax in the last month of 2016. A widespread financial crisis sparked by governmental mismanagement; runaway hyperinflation and a severe drop in oil prices has ultimately led to major civil unrest and public violence. The current situation led the UK Foreign Office and US State Department to issue travel warnings for a country which has not been in this much turmoil for a long time. The month started on a bad note after Venezuela was expelled from MERCOSUR, the regional trading bloc. Following a decade in which strong growth and leftist policies across South America led the bloc to embrace Venezuela, the suspension now underscores the ideological split in a region struggling with plummeting commodity prices and weakening economies. It further isolates the administration of Venezuelan President Nicolas Maduro, who is accused of exacerbating the political, economic and humanitarian crises battering the country.

Meanwhile Maduro sent his Foreign Minister Delcy Rodriquez to Buenos Aires to attend a bloc meeting. Being expelled, Rodriquez was physically prevented from entering a meeting room, which led to the Minister becoming ‘gravely hurt’, according to Maduro. The removal of MERCOSUR put the Bolivar, the national currency, under increased pressure. Devaluation and soaring inflation led to the issuing of new higher-value notes. A backpack full of cash is often required to pay bills at a restaurant or supermarket. The central bank said that six new bills ranging from 500 to 20,000 bolivars would come into circulation halfway through the month. The largest note used to be 100 bolivars and worth about two US cents. Over the past month, the currency has tumbled by 60% against the dollar on the black market. In order to facilitate the use of higher denominations, Maduro pulled the 100 bolivar note creating a national cash shortage on top of the brutal economic crisis. After two days of unrest over the measure – including one death and dozens of shops ransacked – Maduro postponed the measure until 2 January. That helped stem violence, though there were still reports of more lootings in other parts of the country. The border between Venezuela and Colombia was closed for 72 hours in order to prevent the flow of cash out of the country. The Venezuelan crisis has also strained its relationships with allied countries and businesses.

The Chinese Foreign Ministry spokeswoman Hua Chunying said that it has asked the Venezuelan government to take measures to protect Chinese people and their property. Multiple Chinese-run business have suffered from looting. Ford Motor Company has halted auto production in Venezuela and will not resume it until April: “It is a measure to adjust production to demand in the country.” The pressures on the Venezuelan people and economy are not likely to alleviate soon, although it is a realistic possibility to see an extension of the current rise in oil prices in the coming year, perhaps the country’s only hope amid a folly of bad news.

Venezuelans Cross into Colombia Due to Food Shortages

Tens of thousands of Venezuelans have crossed to neighbouring Colombia to buy basic goods amid shortages during a brief opening of the border. Venezuelan President Nicolas Maduro authorized a 12 hour opening of the bridge that connects Tachira, Venezuela, and Cucuta, Colombia. According to the director of the Colombian border authority, an estimated 35.000 Venezuelans arrived in Cucuta. The border was closed in August 2015 as a part of a crime crackdown. President Nicolas Maduro ordered the border closure because the region had been infiltrated by Colombian paramilitaries and gangs.

Venezuelans who want to cross into Colombia in states where the border has been closed need a special permit to do so. But as the scarcity of food gets worse in Venezuela, many have crossed the porous border illegally. On July 6, about 500 Venezuelan women in search of food and medicine broke through border controls separating the western state of Tachira from Cucuta. After buying food and other goods which are scarce in Venezuela, they again gathered at the the border post asking the Colombian guards to let them pass. Goods such as rice, sugar, flour, and oil are hard to come by in Venezuela due to a deep economic crisis.

The ministers of defense from Colombia and Venezuela met earlier this months to discuss potentially reopening border gates on the 2.000 kilometres separating the two countries. Colombian President Juan Manuel Santos and his Foreign Minister Maria Angela Holguin also visited Cucuta last week to push for a reopening.

Demonstrators demanding food have clashed with rioting police in several Venezuelan cities in recent weeks amid demonstrations and looting that have turned deadly. Last month, Venezuelan security forces fired teargas at protesters chanting “We want food!” near the presidential palace in Caracas. National Guard and police officers blocked a road near the Miraflores palace in downtown Caracas, after scores of angry Venezuelans began trying to approach the building.

Venezuelan President Nicolas Maduro and his cabinet blame the recession on an “economic war” they say is being waged against them by businessmen in league with the opposition. The Venezuelan opposition, however, says the real cause of the crisis is the state-led system defended by late leftist leader Hugo Chavez. After winning control of the legislature in January, the opposition launched its efforts to remove the president, including a bid for a recall referendum.

Hundreds Arrested in Northern Venezuela for Looting in Food Shortage

Venezuelan police have arrested more than 400 people in the city of Cumana after street looting over food shortages. Over 100 shops were hit and at least one person died during the incidents. Another death was also reported in the state of Merida from unrest which is breaking out sporadically across the country. Local authorities said that these incidents were inspired by a right-wing faction within the country’s opposition.

Food and medicine are in short supply and street protests and lootings have increased drastically. According to the Venezuelan Observatory of Violence, a local monitoring group, more than 10 incidents of looting are occurring daily across the nation of 30 million people, which is suffering a deep recession and the world’s highest rate of inflation at 180%. Roberto Briceno Leon, director of the Venezuelan Observatory of Violence, said the lootings were going to continue because there was hunger. Briceno Leon also said that the government’s response was insufficient and politicized, so people were resorting to robbery.

Earlier this month, Venezuelan security forces fired teargas at protesters chanting “We want food!” near Caracas’ presidential palace. Hundreds of Venezuelans heading for Miraflores palace in downtown Caracas were met by National Guard and police who blocked a major road. President Nicolas Maduro had been scheduled to address a rally nearby.

Venezuela is also facing a severe electricity shortage. In April, President Nicolas Maduro decided to shorten the workweek to two days in an effort to save energy and electricity. El Guri dam, the country’s most important source of electricity, has record-low water levels.

Venezuela’s political opposition says President Nicolas Maduro and his predecessor Hugo Chavez are to blame for failed economic policies. The opposition is pursuing a recall referendum this year in an effort to remove President Maduro from office. Last Tuesday, Venezuelan police fired rubber bullets and tear gas grenades at students from the public Central University of Venezuela in Caracas, who demonstrated in demand of a referendum on removing Maduro.

But the government says the shortages are part of an economic war being waged to drive President Nicolas Maduro from office. Government officials say there is not enough time this year to organise a referendum. To avoid the threat of unrest associated with long food lines, the government has assigned neighbourhood committees linked to the ruling socialist party to distribute food. The move has angered the opposition, who equate it to an attempt to force loyalty among Venezuelans.

Venezuelan Security Forces Block Anti-government Protest in Caracas

Security forces clashed with thousands of protesters trying to reach the headquarters of Venezuela’s electoral body Wednesday to demand a referendum to recall unpopular President Nicolas Maduro. The clashes occurred after police blocked access to the National Electoral Centre and used teargas to disperse the crowd. A few demonstrators were arrested and one protester was carried off unconscious, according to witnesses. Opposition leaders warned Venezuela was a “time bomb” and said blocking democratic avenues for Maduro’s removal meant Venezuelans would increasingly take to the streets.

The anti-government protest came days after socialist President Nicolas Maduro declared a state of emergency due to what he called plots from within the country and from the US to topple his leftist government. The decree gives the government and security forces broad authorization to ignore most constitutional safeguards in a bid to keep order and supply basic food and services, and to counter an energy shortage. The measures are to last for 60 days with the option of being renewed for further periods of 60 days. President Nicolas Maduro also said that Venezuela would hold national military exercises to prepare the country for “any scenario”.

Two weeks ago, the electoral body received a petition signed by 1.85 million people demanding a referendum to oust President Nicolas Maduro. The constitution establishes that a referendum will be called to decide if the president remains in power if a second petition is signed by at least 20 percent of the electorate, nearly four million people. However, the government made it clear that the referendum would not go ahead. Venezuela’s Vice-President Aristóbulo Istúriz said the referendum would not take place due to procedural errors. Isturiz said the opposition had “acted too late, had done it wrong and had committed fraud.” The opposition fear authorities are trying to delay a referendum until 2017, when — under the Constitution — the presidency would fall to the vice-president.

On Friday, US intelligence officials warned that Venezuela was descending into economic and political chaos that was likely to end in street violence, military suppression of citizens’ rights, and a possible coup to remove President Nicolas Maduro. According to recent polls, President Maduro’s approval ratings fell to a low of 33 percent, with two-thirds of Venezuelans thinking Maduro’s presidency should end this year. The discontent emanates from a shrinking economy, rising inflation, and severe food and power shortages.