Maduro and the political and economic turmoil in Venezuela

What does Venezuelan President Nicolas Maduro have to do in order to survive the political fallout from the protests?

Dr Joseph S. Tulchin:

Nicolas Maduro, the President of Venezuela has to decide if he’s willing to allow the opposition space for dissent. The problem with Venezuela is in part a legacy of the charismatic president Hugo Chavez who died about a year ago, and who began to diminish the space for political dissent in Venezuela, following what we call a ‘populist government’ which means that he was elected and so he wants all power in his hands. Now Maduro is continuing that.

The opposition, of course, is opposed to reducing dissent and reducing the space, so in order to avoid a bloodbath in Venezuela both sides have to agree to compromise a little bit and give up some political space.

But lying behind the protests is this long-term erosion of democracy in Venezuela, and that is something all of us have to watch because it is happening in countries elsewhere in Latin America and around the world - a leader is elected, and then takes that election as a mandate to take all power into his hands.

And the result is that the political parties become weak, congress becomes a rubber stamp and the judiciary loses its independence. And the quality of democracy begins to erode and diminish. So that’s the long-term problem in Venezuela.

What is the reaction from other Latin American countries?

Dr Joseph S. Tulchin:

Part of the problem for those of us who are watching Latin America is that Maduro’s behaviour has created a split in the hemisphere. There are several countries that warmly support and strongly defend his government – Ecuador, Bolivia, Nicaragua, Cuba of course. Cuba is the strongest supporter of Maduro's government because the Cuban’s receive subsidised oil form Venezuela. Significant amounts of it, without which the Cuban government would have difficulty to keep going. So the Cubans support them, the Nicaraguan’s support them, President Correa in Ecuador supports them, and the Argentines have come out in support.

The other faction of Latin American countries, along with the United States by the way, argue that Maduro should engage in dialogue with the opposition and to allow for a more tolerant form of democracy. The Chileans, Uruguayans, Colombians, Peruvians, and then Brazil is half way between the two groups – but the Latin Americans are totally divided over how to respond to the crisis in Venezuela.

What is the future of Venezuela’s economy – particularly with a view to the global price of oil?

Dr Joseph S. Tulchin:

Well, we watch the price of oil every day because the price of oil determines how much money Maduro’s government has in its pocket, if you will, to spend on social programmes.

Economists think that approximately US$90 per barrel of oil is the dividing line between windfall profits in the pockets of the Venezuelan government and no profits in their pocket. The price of oil on March 14, 2014, in the US was listed at US$98, so it’s the first time the price has fallen bellow US$100 per barrel in about six months. This is not good news for the Venezuelan government, but it is not serious.

Keep in mind that Venezuela is closer in its economy to some of the Arab countries than to other oil-producing countries in Europe or the Western hemisphere. Eighty per cent of its trade finances are due to the export of oil. The government doesn’t exist without selling oil. As a consequence, the government, the country imports foodstuffs and basic commodities. And as inflation increases, as it has in Venezuela, people don’t know how much the local currency is worth and they don’t know whether they are able to import such basic things.

The news reports constantly talk about running out of toilet paper in Caracas, and I think they use that as an example so that readers understand just how serious the failings of the government are.

There are no goods on the shelves, people don’t have anything to buy and they don’t know what their currency is worth.

And until the government of Mr Maduro gets that under control, the social tensions will increase, the protests will continue and the pressure on Maduro to allow more dialogue will only continue to grow.

Let’s just hope it doesn’t end in bloodshed.

(Picture credit: dpa)