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Aug
12
2013
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ICYMI: Venezuela Opposition Comes Under Siege

Wall Street Journal
August 9, 2013
By José de Córdoba and Ezequiel Minaya

Oscar Lopez left adviser 010 ICYMI: Venezuela Opposition Comes Under Siege

Courtesy of: Associated Press

CARACAS—Venezuela’s President Nicolás Maduro, the political heir to late populist Hugo Chávez, is ratcheting up intimidation of his political foes as his government prepares for key municipal elections amid a deteriorating economy.

Oscar López, a senior aide to former opposition presidential candidate Henrique Capriles, was in hiding Friday after a government legislator said a warrant had been issued for the aide’s arrest. Days earlier, the apartment of Mr. López, Mr. Capriles’s chief of staff, was searched by military-intelligence agents, according to opposition officials.

“He doesn’t know what this circus is all about so he is taking care of himself” by going into hiding, said Julio Borges, a legislator and national coordinator of Venezuela’s leading opposition party, Justice First.

Mr. Capriles himself faces possible arrest after the Supreme Court on Wednesday rejected his challenge to Venezuela’s April presidential election, which Mr. Maduro won by a sliver but which was marred by allegations of fraud. The court went on to fine Mr. Capriles $1,700 for what it said was a “disrespectful” filing and said the opposition leader should be prosecuted for trying to undermine the election.

“It’s a way to attack Henrique and his movement,” Mr. Borges said.

A senior U.S. official said Washington is worried about developments in Venezuela. “The Venezuelan government is increasingly taking legal actions against the opposition, a development the United States finds profoundly worrying,” the official said. The wave of actions against opposition leaders like Mr. Capriles “raises legitimate and urgent concerns,” the official said.

Venezuela’s Attorney General’s Office declined to comment as did Venezuela’s Information Ministry.

Venezuelans go to the polls in December to contest some 335 mayors’ posts throughout the country, as well as hundreds of other local offices. The elections will be the first gauge of Mr. Maduro’s popularity since his win in April’s election.

In the run-up to the vote, Venezuela’s economy has shown signs of increasing stress after years of ramped-up public spending under Mr. Chávez, who died in March. The country’s inflation is north of 42%, common consumer goods like toilet paper are scarce, and despite high oil prices, Venezuela just defaulted on the payment of a $100 million bond of a nationalized steel company, spooking bond buyers. Divisions in the Chavista movement, nominally led by Mr. Maduro, are deep.

“This is clearly a wounded government as far as its mandate and its internal dynamics. And like any wounded animal, it can be dangerous. It is taking very severe steps to consolidate power,” said Christopher Sabatini, senior director of policy at the Americas Society and Council of the Americas.

Also this week, authorities jailed and froze the assets of the editor of a small independent paper and website, Leocenis García of Sexto Poder, who has published detailed reports of alleged government corruption. On Thursday, a judge fined two opposition newspapers—including El Nacional, the country’s most influential daily—1% of their 2009 income for showing a photograph of deteriorated conditions in a morgue. The judge said showing the photo was harmful to the welfare of children.

In Caracas, Juan Carlos Zapata, an author and political analyst, said the escalating repression shows a clear government intention to frighten the opposition. “They want to dismantle the opposition, they want Capriles’s aides to flee the country, and for Capriles to throw in the towel before elections,” said Mr. Zapata. “It’s an orchestrated plan to scare off the opposition.”

The Maduro government has said that it is simply rooting out corruption, regardless of political affiliation. Soon after taking office, Mr. Maduro launched an antigraft initiative that has resulted in the arrest of a handful of mid-level state officials.

The latest government moves follow last week’s stripping of parliamentary immunity by government deputies of a popular opposition congressman, by less than the constitutionally required two-thirds majority. Richard Mardo, who has built up a large following in the Chavista state of Aragua, now must face charges of alleged corruption.

Legal moves by the government against its foes are common in Venezuela. A study by Human Rights Watch found that as of May 2012, Venezuela’s Comptroller General’s Office had temporarily disqualified some 800 people, most of them Chávez foes, from running for office due to accusations of corruption—even though charges hadn’t been filed against them. About 300 people are still barred from running for office.

During his time in office Mr. Chavez routinely brushed aside international criticism as attempts to meddle with domestic affairs and plots to topple his government.

Meanwhile, the opposition is struggling to get out its message to ordinary Venezuelans. Globovisión, once a feisty opposition TV channel—and the only one that gave Mr. Capriles significant airtime—was sold earlier this year, and its coverage of Mr. Capriles has fallen sharply. News about Mr. Capriles is now relegated to a recently opened Web channel dubbed “Capriles TV.” Mr. Borges said that the opposition would have to work hard to get its message out by taking a “grass-roots” approach.

Opposition figures as well as analysts say the repressive wave points to the deep divisions in Mr. Chávez’s movement following his death. “Chávez was a kind of crazy glue that was able to keep different elements together,” says Mr. Borges.

Mr. Borges sees different power groups within the government fighting for influence and control. Within these groups are groups of powerful businessmen and executives who control different sectors of the economy such as the state oil industry, food imports, and the country’s other basic industries. “There are no institutions anymore, just different clans balancing each other,” Mr. Borges said. “Maduro is not president of the country, he is the boss of one of these groups.”

Analysts foresee a difficult time ahead for Venezuela. “It’s a disaster in the making because nobody is in charge,” says Riordan Roett, the head of Latin American studies at Johns Hopkins University.

Many analysts believe the most powerful faction is led by Diosdado Cabello, the president of the National Assembly. Mr. Cabello, a burly and bull-necked former army lieutenant who took part in Mr. Chávez’s failed 1992 coup, has close ties to the country’s armed forces and has reportedly built up a considerable personal fortune.

In late April, Mr. Cabello presided over the congress as a number of opposition legislators were beaten in the congressional chamber. At the time, Mr. Cabello didn’t allow opposition deputies to take the floor to speak until they recognized Mr. Maduro’s victory. Mr. Cabello has ruled the chamber with an iron fist ever since.

Javier Corrales, an expert on Venezuelan politics at Amherst College says that while Mr. Maduro has shown some signs of moderation—such as meeting with top businessmen, Mr. Cabello is openly confrontational. “This crackdown seems to come from Diosdado,” he said. “His instinct appears to be brute force.”

Mr. Cabello couldn’t be reached to comment.

To read this article at the Wall Street Journal, please click here.

 
Aug
2
2013
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In Case You Missed It…Articles Roundup Week of 8/2/13

caprilesguarenas guatire.520.360 e1375469944950 In Case You Missed It…Articles Roundup Week of 8/2/13

Courtesy of: El Universal

This week: The Venezuelan government tightens its control over the media as authorities freeze the assets of “El Nacional” owner Miguel Henrique Otero; Otero then accuses the government of trying to intimidate and silence his paper; pro-government deputies in Venezuela revoke the immunity of opposition lawmaker Richard Mardo and drum up “corruption” charges; Henrique Capriles responds by accusing the PSUV of “trashing” the Venezuelan constitution. An Economic Survey conducted by the Economic Commission for Latin America and the Caribbean shows that inflation takes a bigger toll on Venezuela’s poor than in any other Latin American country; daily sales of U.S. dollars to the private sector sink 13 percent as the cost of government imports and foreign debt payments take money from the private sector; Venezuela’s strong currency controls create opportunities for illegal profiteering schemes. A poll conducted by the Venezuelan Data Analysis Institute (Ivad) reveals that today 45.1 percent of Venezuelans would vote for Capriles, while only 39.3 percent would choose Maduro; former ambassador Otto Reich files a lawsuit against three Venezuelan businessmen for bribery; seven U.S. Senators introduce a bill condemning violence against the opposition in Venezuela.

Venezuela Freezes Assets of Opposition Newspaper Editor, Wall Street Journal

Venezuelan authorities have frozen the assets of Miguel Henrique Otero, the editor and owner one of the country’s largest opposition-leaning newspaper, the attorney general’s office announced Saturday.

Editor: Venezuela Government Trying to Silence Us, Associated Press

The head of one Venezuela’s last two nationally circulating opposition newspapers accused the leftist government on Monday of trying to intimidate and silence it.

Pro-gov’t deputies lift immunity of opposition lawmaker Richard Mardo, El Universal

During the regular session held at the Venezuelan Parliament on Tuesday, pro-government legislators lifted the parliamentary immunity of opposition legislator Richard Mardo on corruption accusations filed by Parliament’s Speaker Diosdado Cabello and endorsed by the president of the Comptrollership Committee of the Parliament, Pedro Carreño, both ruling party legislators.

Capriles: Deputies trashed the Constitution by revoking Mardo’s immunity, El Universal

During a public event at a local community, Venezuelan opposition leader Henrique Capriles Radonski brought out the issue of opposition Legislator Richard Mardo and his parliamentary immunity –revoked– in Parliament, and stated that the “circumstantial majority in Parliament trampled on the Constitution and the decision of the Supreme Tribunal of Justice.”

Venezuela the only country where inflation lashes the poor the most, El Universal

Fairer distribution of national income has not been enough to solve the imbalance of the Venezuelan economy, which lashes the most vulnerable sector of society: the poor.

Daily US dollar sale to the private sector down 13%, El Universal

Claiming that the Venezuelan private sector was sold USD 125 million on a daily basis for ordinary imports in the first half of the year via both the Latin America Integration Association (Aladi) and the Unified System for Regional Compensation (Sucre), Armando León, member of the board of directors of the Central Bank of Venezuela, rejected allegations that authorities sold a lower amount of foreign currency with respect to the same period last year.

Venezuelan gov’t sucks up the dollars required by the private sector, El Universal

The minutes of meetings recording the decisions made by the Central Bank of Venezuela’s Board of Directors; the bank’s balance of payments; and the performances of both the Transaction System for Foreign Currency Denominated Securities (Sitme) and the Ancillary Foreign Currency Administration System (Sicad) are all cut pieces that are to be fitted together into a big jigsaw puzzle wherein foreign currency availability for the private sector is plummeting.

Venezuela central bank to sell $180 mln in forex auction, Reuters

Venezuela’s central bank said on Friday it would auction $180 million under its revamped currency exchange system known as Sicad, part of an effort to boost the flow of dollars to the economy and ease product shortages.

How Venezuelan Used ‘Scrape’ to Make Six Times Her Salary, Bloomberg

Venezuela’s currency controls are turning trips abroad into profitable junkets. A 27-year-old trade analyst from Caracas said she earned six times her monthly salary by traveling in April to Lima, where a business swiped her credit card and gave her $1,600 cash, charged at the official exchange rate of 6.3 bolivars per dollar.

Poll shows 45.1% of Venezuelans would vote Capriles, El Universal

Regardless of the outcome of the presidential election held in Venezuela last April 14, a survey conducted by the Venezuelan Data Analysis Institute (Ivad), Government Management, and Political Situation, showed that 45.1% of Venezuelans would vote Henrique Capriles over 39.3% who said would vote Nicolás Maduro.

Presumed corruption in Pdvsa and CVG aired in the United States, El Universal

The New York District Court admitted last Tuesday a racketeering and defamation lawsuit filed by US former ambassador Otto Reich against the partners of Derwick Associates in relation to contracts for the installation of electrical system executed with state-run oil holding Petróleos de Venezuela, electricity utility Corpoelec and the Venezuelan Guayana Corporation.

Suit Alleges Graft in Venezuelan Contracts, Wall Street Journal

A former top U.S. diplomat filed a lawsuit against three young Venezuelan businessmen whom he accuses of bribing senior Venezuelan officials in exchange for contracts worth hundreds of millions of dollars. The suit puts a spotlight on a group of executives who the diplomat, Otto Reich, and other critics say have made fortunes from links to Venezuela’s self-proclaimed socialist government.

US senators condemn political violence in Venezuela, Global Post

Seven US senators from both parties introduced a bill condemning violence against the opposition in Venezuela, calling for dialogue after a contested election.

 
Apr
2
2013
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ICYMI: Tough times ahead in post-Chavez Venezuela

The Associated Press
April 1, 2013
By Fabiola Sanchez

ijKok4dzw3DM e1364924737530 ICYMI: Tough times ahead in post Chavez Venezuela

Courtesy of: Bloomberg

CARACAS, Venezuela (AP) — Doing business in post-Hugo Chavez Venezuela is not for the faint of heart.

Thousands of companies suffer under currency controls that all but deny them the U.S. dollars they need to import vital items into this oil-rich country, from food to cars to spare parts — even gasoline. Venezuelan firms must sell their wares at state-controlled prices that don’t reflect the 22 percent inflation rate, the highest in Latin America. Even Venezuela’s socialist government admits the controls don’t work — but its attention is focused on the April 14 election to replace the late President Hugo Chavez.

It’s a largely improvised economic policy that, despite oil earnings, has turned people’s lives upside down and produced shortages of flour, coffee, butter and medicines. It’s also a mess that will immediately challenge whoever becomes the president of this 28 million-person country.

Jeni Suarez, a 51-year-old Caracas homemaker, experienced the crisis first hand after waiting three months for a colonoscopy at a public hospital. When she got there, doctors told her they needed new parts from abroad to perform the procedure, and the deliveries weren’t coming any time soon because the hospital didn’t get dollars from Venezuela’s government to buy them.

“I have an intense pain, and I don’t know what to do,” Suarez said after the appointment at Jose Maria Vargas Hospital.

Such economic headaches have, in fact, defined much of the late president’s legacy here.

Chavez imposed draconian currency controls a decade ago to punish business leaders who had mounted a crippling opposition strike. He was also trying to stem the flight of dollars abroad as political instability spooked investors.

“The policy of currency controls is very negative for the country and hasn’t met any of its objectives,” said Alejandro Grisanti, an analyst at investment bank Barclays Capital. “It hasn’t stopped capital flight. It hasn’t stopped inflation, (and) it has been very costly for the treasury.”

Neither Chavez successor Nicolas Maduro nor opposition candidate Gov. Henrique Capriles has delivered specific proposals to address the crisis, said Alejandro Gutierrez, an economics professor at the University of the Andes. The most effective solution would likely involve unpopular measures such as a mass devaluation of the currency to spur exports, or an end to price controls.

Capriles has spent much of the campaign trying to assure Chavistas he will not take away their government-funded social programs, while Maduro vows to continue the late leader’s legacy, which would include the controls.

“We are facing a transition situation, and they are going to wait until this situation is cleared up,” Gutierrez said Monday.

Only Capriles has suggested a possible way of injecting more dollars into the economy: Ending subsidized oil exports to Cuba that began under Chavez.

The late leader had aided his allies by providing oil at preferential terms to more than a dozen countries in Latin America and the Caribbean. Cuba receives Venezuelan oil worth around $3.2 billion a year, estimates Jorge Pinon, a University of Texas energy analyst. Nicaragua gets about $1.2 billion worth of oil, according to economist Nestor Avendano.

Yet whoever wins the vote won’t be able to put off action indefinitely. The wave of national mourning for Chavez and the heated campaign have so far masked the plight of dollar-poor food makers, dairy farmers, ranchers and auto manufacturers. But consumers are feeling the shortages of appliances, automobiles and staples such as flour, coffee, butter and medicines.

Venezuela’s automakers are operating at 50 percent capacity because they don’t have dollars needed for auto parts made abroad, according to Omar Bautista, president of a national carmakers group that includes Ford, General Motors and Mitsubishi. And foreign suppliers are hesitant to sell to Venezuela because they don’t know when or if they’ll be paid, Bautista said in remarks reported by Caracas’ El Universal newspaper.

“New (parts) shipments are being held back as long as we cannot honor these contracts,” Bautista said.

Even as Venezuelans fight for dollars, the country sits atop the world’s largest proven oil reserves, with those exports delivering nearly $1 trillion in revenues to the country since Chavez was elected in 1999.

Thanks to oil, Chavez’s government had invested $500 billion on social programs since 1999, according to Planning Minister Jorge Giordani. Venezuela’s poverty rate fell from 50 percent in 1999 to 32 percent in 2011 while unemployment dropped from 13 to 8 percent.

After the 2002-03 strike, Chavez began using the enormous influx of dollars as a political weapon, with the government selling businesses limited quantities of dollars at a rate that didn’t reflect the bolivar’s real black market value. The official rate is now about a quarter of what the dollar sells for on the black market.

At the same time, the government’s own dollar supply may be diminishing. Oil income trailed off from $5.6 billion in 2008 to $3.8 billion in 2012, partly because of slumps in production and refining. The government also spent heavily to re-elect Chavez in October and help Maduro’s candidacy after the president’s March 5 death, further squeezing the dollar supply to private businesses.

As long as government dollar sales are frozen, “foreign exporters are not going to start selling to us,” said Carlos Larrazabal, president of one of Venezuela’s largest business chambers. “We cannot understand how it can be that we have a country with an oil price of more than 100 dollars per barrel and we have this scarcity of currency.”

In a bid to inject some liquidity into the economy — and a tacit admission that the currency controls aren’t working — Maduro’s interim government held a one-day auction of $200 million last week.

Jorge Roig, vice president of the Fedecamaras business chamber, said the rules for bidders were late in coming, overly complicated and discouraged small and medium-size firms from participating. At least $1 billion more is needed to keep companies rolling, Roig told Caracas’ Union Radio on Wednesday.

The Venezuelan Association of Medical, Dental and Laboratory Equipment says its members collectively owe $300 million for past imports, which were suspended in November because they couldn’t pay.

“There are no test tubes to collect blood samples. There are no colostomy bags. No electrocardiogram paper. No X-ray plates,” said Anerlin Garcia, the group’s executive director.

Simon Nobile, president of the Venezuelan Association of Pasta Foods, says more dollars alone won’t help. The government also must raise its official prices on hundreds of products because they don’t reflect the effects of inflation, he said.

Eleven manufacturers in Nobile’s association employ 5,000 people but are close to shutting down because the price of pasta has been frozen for two years. The official selling price of 68 U.S. cents per kilogram (2.2 pounds) makes up only half the production cost, Nobile said. He said firings could happen at his company as early as April.

“If the government doesn’t make a decision,” he said, “this is the end.”

To read this article at Associated Press, please click here.