Jul
14
2011
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After Chávez, the Deluge

DSC 0754 150x150 After Chávez, the Deluge

José R. Cárdenas served in several foreign policy positions during the George W. Bush administration (2004-2009), including on the National Security Council staff.  He is a consultant with Vision Americas in Washington, DC.

Hugo Chávez has finally divulged he is being treated for cancer, but — in typical secretive fashion — offered no significant details as to the prescribed treatment, or just what impact his medical condition will have on his ability to govern Venezuela. He has hinted at potentially needing chemotherapy, a treatment which will necessarily debilitate his ability to govern, and perhaps campaign for Venezuela’s 2012 presidential election.

Due to Chávez’s authoritarian nature, this translates into a power vacuum that has to be filled — who does so will determine Venezuela’s foreseeable future. The situation is compounded by the fact that Chávez has left his would-be successor a veritable time-bomb of growing domestic woes.

The fact that the Venezuelan strongman has presided over a faction-ridden regime is hardly surprising, given that his government is bereft of institutions and power is wielded arbitrarily. Those competing for power within Chavismo are not Boy Scouts but hardliners that can be counted on to act more like Mafia dons at war than accountable public officials managing a democratic succession.  (Remember, there are billions of dollars up for grabs here.)

The faction best positioned to govern in Chávez’s stead appears to be made up of those trusted by the Castro regime, which itself has an interest in keeping its economic lifeline alive and well. They include Vice President Elías Jaua and Foreign Minister Nicolás Maduro, both colorless but loyal apparatchiks to Chávez and Castro. Also in this group is Chávez’s older brother Adán, a former Venezuelan ambassador to Cuba with close ties to the Castro regime. Adán is charisma-challenged, but has the right bloodlines.

Backing this faction will be a rogues’ gallery of international stakeholders that have profited immensely from Chávez’s largesse over the years. They will advocate for maintaining the status quo — with or without Chávez — through the 2012 elections.  These include Russia, China, Iran, and, of course, Cuba, not to mention the ALBA countries that benefit from Venezuela’s petrodollars.

Another faction revolves around former Chavista officials who, for one reason or other, were removed from office by Chávez and would certainly be interested in regaining a measure of power with all its perks and privileges. They include National Assemblyman Diosdado Cabello (former Vice President), José Vicente Rangel (former Vice President), and Jesse Chacón (former Minister of the Presidency). These individuals, however, are not trusted by the Cubans because of their independent thinking. How the status quo faction deals with these individuals will define a post-Chávez Venezuela.  Will they once again be allowed a cut of the action, or will they continue to be marginalized?  If it’s the latter, hold on to your seats.

While the Cabello faction maintains strong ties to the military, the wild cards in this situation could be Minister of Defense General Henry Rangel Silva and Chief of Military Intelligence Hugo Carvajal. Both are Chavistas to the core but need to maintain low political profiles due to having been sanctioned by the United States for facilitating narcotics trafficking through Venezuela. That said, make no mistake about it, they both wield enough behind-the-scenes power to make or break Chávez’s successor.

What’s important to remember amidst all this cut-throat palace intrigue playing out over the next weeks and months in Venezuela is the increasing ungovernability of the country. In short, Chávez has left a mess. From the region’s highest inflation rate and electricity rationing to rising street crime and unsustainable spending programs, the current state of affairs in Venezuela is more than any consolidated government could handle, let alone one trying to piece itself together in the wake of such a polarizing leader as Hugo Chávez.

It is hard to tell what direction the Chavista rollercoaster will take next, but whatever it is, only one thing is certain – it is going to be a bumpy ride.

 
Jun
22
2011
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Turn Out the Lights, the Party’s Over

pic11 150x150 Turn Out the Lights, the Partys Over by Petardo de Petare

“Turn out the lights the party’s over they say that all good things must end.
Let’s call it a night the party’s over and tomorrow starts the same old thing again.”
-Willie Nelson

As soon as I heard of our government’s latest plan to ration electricity, I thought of the 1970s classic by American country music legend Willie Nelson. Yes, believe it or not, we too listen to Willie here in Venezuela, or at least I do anyways. The government’s latest rationing plan is proof positive that, when it comes to addressing our country’s power needs, the party’s over. The Chávez government has tacitly admitted that they have failed miserably in addressing the power needs of our country. The government’s incompetence in addressing any of the basic needs of our people has become more than a great inconvenience but a great disservice to Venezuelans, who on a daily basis face many challenges in achieving their dreams – from living in a safe neighborhood to having a remunerative job. To add insult to injury, the Chavistas do nothing but lay blame on others for their failures. When it comes to the power issue, they are now blaming us Venezuelans, chastising us for wasting too much energy. Energy Minister Alí Rodríguez Araque scolded us saying, “Demand is excessive.” Not to be left behind, Vice President Elías Jauá announced that “We need to take extraordinary measures to regulate the demand and stabilize the grid.” But, no one here in Petare is buying the government’s excuses.

It is worth asking how a country blessed with some of the largest oil reserves in the world is constantly subjected to power rationing and blackouts. Only under the leadership – or lack thereof – of the Chávez government can such travesty take place. First, the government blamed the Guri dam, the third largest hydroelectric power station in the world. The Guri supplies over 70% of the power consumed by Venezuelans. Last year, the Guri had very low water levels due to a severe drought. Tired of blaming Mother Nature, the government moved on to a more worthy enemy – private enterprise. On Phase II of their attacks, Chavistas accused large private businesses, such as shopping malls, of “wasting too much power.” As a result, the Sambil mall in Caracas was forced to close its doors early. Never mind two important economic indicators such as consumer spending and job creation. Who needs those? Phase III of the Chávez strategy was unabashedly political in nature. Our president and his posse accused the opposition of sabotaging our electricity for political gain – a perfect example of the pot calling the kettle black. Last but not least, in Phase IV, the blame has caught on to the rest of us – the Venezuelan people. According to the government, we are obsessed with “Yankee consumerism.”

They are running out of time and excuses. Today, the Guri is bursting with water, shopping malls are operating under a normal schedule, the opposition is gaining momentum and us, evil consumers, are going about our business as best as we can. And, the power outages continue. Why? Well, there are various reasons, all pointing to the government’s unwillingness to take serious steps to address this issue. For starters, our population has grown, and with it our energy needs. Despite that reality, the government has failed to make the power investments needed to keep up with the consumption growth in Venezuela. According to Gustavo Marcano, a member of our Chamber of Deputies, the government announced in 2005 the construction of 12 new power generation plants by 2008. Here we are, in 2011, and all remain unfinished.

Another important point to consider in the electricity crisis is the subsidies provided by the government. Experts argue that these subsidies actually backfire by encouraging increased consumption. Lastly, the specter of expropriation is also a factor in this crisis. In 2007, the government expropriated Electricidad de Caracas, owned by a U.S. company, AES. As everything else that falls into this government’s hands, the new CORPOELEC is a mismanaged and inefficient enterprise, which has been unable to make the necessary investments in the power transmission lines, for example, needed to transfer the power from the Guri to my home so that I can keep my lights on.

But what really makes us red with anger here in Petare is the fact that, while we are inconvenienced with power outages, our government, in its eternal need to seek approval abroad, is spending millions of bolívares in other countries to provide them power. In Nicaragua, Mr. Chávez spent $52 million to build the Nagarote power plant, and in Bolivia, $72 million were allocated for the Entre Rios thermoelectric plant. Last but not least, to please Mr. Chávez’s hero, Fidel Castro, our government spent $170 million to build a power plant in Holguín. It makes absolutely no sense!

By themselves, the power outages are a problem the government could very well overcome – at least, politically speaking. But when one combines the outages with the myriad of other major problems facing Venezuelans every day, it becomes increasingly harder to “spin” the government’s incompetence. In other words, the power crisis is not an isolated incident; it is a real life example of the government’s inability to manage any of the most basic needs of the Venezuelan people. That is why I believe that for this government, the party may soon be over. Sing it, Willie!

 
Aug
12
2010
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Venezuela Aims To Keep Bankers From Owning Media Cos

This article was originally posted by The Wall Street Journal

Venezuelan Vice President Elias Jaua asked lawmakers Wednesday to approve a plan to prevent owners of banks from controlling large media companies.

The proposal, similar to legislation in Ecuador, argues that freedom of speech can’t exist if banks or business monopolies control the media.

Venezuela’s National Assembly has been debating various proposed changes to banking laws since April, and this latest request from the administration of President Hugo Chavez would be part of that reform bill.

The idea to keep bankers and media moguls separate comes because of the government’s discomfort with Globovision, an anti-Chavez television station, and Nelson Mezerhane, one of the station’s controlling shareholders. In addition to holding a 26% stake in Globovision, Mezerhane also ran a mid-sized bank, Banco Federal, which was seized by authorities in June for alleged liquidity problems.

Globovision is the only major television outlet in the country critical of Chavez.

The Chavez administration didn’t renew the license of Radio Caracas Television, also a voice of political opposition, in 2007, sparking accusations that the government was silencing dissenting media.

“We can’t talk about having a full democracy while allowing corporate interests to consolidate power,” Jaua said.

The government, which took control of Banco Federal and now plans to liquidate it, has issued an arrest warrant for Mezerhane. The government also said it has since taken ownership of Mezerhane’s stake in Globovision.

Mezerhane, who resides in the U.S., denies all the charges against him and said he doesn’t plan to return to Venezuela anytime soon.