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Political situation in Venezuela

Published Friday, September 1, 2017

A Westminster Hall debate on the ‘Political situation in Venezuela’ is scheduled for Tuesday 5 September 2017 from 9.30am to 11.00am. The debate has been initiated by Graham P Jones MP.

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Venezuela is suffering from acute and interconnected economic, social and political crises.

Economic crisis

The main cause of Venezuela’s economic crisis is the steep fall in the global price of oil, on which its economy is heavily dependent, it provides over 90% of its exports (crucial in acquiring the foreign currency Venezuela needs to purchase imports). An overvalued currency, in part due to tight government controls on imports, pushes up the price of goods in the shops. To combat this President Maduro introduced price controls. However this has led to products either not being supplied or going on the black market.

The government’s budget deficit was estimated by the IMF to be 15% of GDP in 2016, the government has monetised the deficit by printing money which has led to soaring inflation. Official figures have not been released since 2015 but the IMF estimates the annual inflation rate was 255% on average in 2016 and is expected to rise to 1,100% by the end of 2017. GDP has fallen by a third in the four years since 2013 and unemployment is at 25%.

Until now, the government has managed to keep up with its debt repayments. However, its attempts to raise money and avoid default are unlikely to be sustainable for long if current conditions continue.Exacerbating the difficulties are additional financial sanctions imposed by the US government on Venezuela in late August, including prohibiting US institutions from being involved in new debt or shares issued by the Venezuelan government and the state-run oil company PDVSA.

The economic crisis has led to severe shortages of food and medicine. Hunger is rife with 12.1% of the population eating less than three meals a day, and the Bengoa Foundation for Food and Nutrition estimates that 30% of school age children are malnourished. Caritas, a Catholic non-profit organisation that is working in Venezuela, produced a (Spanish language) report in May 2017, which found in the four states they surveyed that 11.4 percent of children under five are suffering either from moderate or severe acute malnutrition. Human Rights Watch’s 2016 country report stated that both infant and maternal mortality rates were rising sharply. The lack of medicines, and the deteriorating health of the Venezuelan people, means that cases of Malaria are now surging. In March 2017, President Maduro asked the UN to assist with the medical crisis.

Political crisis

The political crisis stems from a battle for legitimacy between the government and opposition. Nicolas Maduro the current President of Venezuela, succeeded Hugo Chavez after his death in March 2013. Mr Maduro, who had served as Chavez’s Vice President, then won a Presidential election in April 2013, narrowly defeating opposition leader Henrique Capriles by less than 2% of the vote.

In December 2015 the opposition won by a landslide in the elections to the Venezuelan Congress. However, the Supreme Court, which is packed by government loyalists, prevented three opposition candidates from taking their seats, which meant the opposition fell short of the crucial two-thirds majority which would have allowed it to exercise much greater powers. The Court has also blocked most of the legislation that the opposition Congress has passed by declaring it unconstitutional.

Since the legislative elections there have been a series of political confrontations between the two sides. On 30 March 2017, the Supreme Court took over legislative powers from the Congress, after holding the Congress “in contempt” of its powers. This move caused international consternation and widespread protests, Maduro’s government recognised the over-reach this represented, with the President urging it to review the ruling “to maintain institutional stability.” The Court backtracked and reversed its decision on April 1.

On 8 April, Henrique Capriles, the 2013 opposition presidential candidate was banned from running for office for 15 years due to “administrative irregularities” during his time as Governor. This led to waves of protests and the death of several protestors. Clashes between protestors and security forces led to a joint communique from 11 Latin American states calling on Venezuela's government to "guarantee the right to peaceful protest.” The government have responded by calling this “rude meddling”. On 5 July, supporters of the government stormed the National Assembly, assaulting opposition members. The government has vowed to investigate, with President Nicolás Maduro saying "I will not be complicit in acts of violence."

The most contentious government initiative was launched on 1 May 2017 when President Maduro announced he would convene a Constituent Assembly to revise the country’s 1999 constitution (itself the result of a Constituent Assembly called by then President Hugo Chavez.) This move was widely condemned by the international community. Maduro presented the plan as an opportunity for reconciliation, saying it was the “only road to restore peace”. According to Reuters some 85% of Venezuelans surveyed in early June opposed revising the constitution.

On 16 July the opposition organised an unofficial referendum which resulted in around 7 million people voting against the formation of an Assembly, but the vote had no legal status. Despite an apparent lack of public support the election to select members of the Assembly went ahead on 30 July. The main opposition parties boycotted the vote and government-supporting candidates claimed all the seats. Governments in the region such as Brazil and Argentina, as well as the UK and US, condemned the vote, and said they did not recognize the legitimacy of the assembly.

The company which supplied the software for the electronic voting machines used in the election claimed a few days after the election that the results were fraudulent, suggesting there were big disparities in actual turnout and the numbers put forward by the government.

It was widely feared that the new Constituent Assembly would follow the example of its 1999 predecessor and assume for itself wide ranging powers and suspend Congress. Such fears have now seemingly been realised. On the first day of sitting, the Assembly removed government supporter-turned-critic Attorney General Luisa Ortega from her position. Since then it has voted to put opposition leaders on trial for treason, and most significantly given itself the power to pass legislation, effectively neutering the opposition controlled Congress. This move was condemned in the strongest terms by Sir Alan Duncan, FCO Minister for Europe and the Americas.

What next?

Throughout this period anti-government protests have continued. These have often descended into violence. A report from the United Nations human rights office estimates that of the 124 deaths linked to the protests, 46 came at the hands of security forces and 27 from armed pro-government militias or colectivos. The report also points to “the existence of a policy to repress political dissent and instil fear in the population to curb demonstrations”, from the government. These continual clashes, along with the ongoing economic and social crises, have led to speculation about how long the government can stay in power. However, the consensus amongst analysts is that there is unlikely to be any change of regime in the near future.

Constitutional pathways to challenge the government such as a recall referendum on President Maduro have been blocked by the Supreme Court. Large scale opposition protests may be hard to sustain as they are yet to have much impact. Widespread hunger means day-to-day survival is the primary focus of many people, and the government maintains a firm grip over the armed forces and security services. While there has been some small-scale dissent in the armed forces, the Financial Times in May suggested it is unlikely it will turn against the government due to their large-scale involvement in the running of the state, which gives them both power and extra resources.

It has been suggested that as pathways to resisting the government narrow, the opposition may radicalise further and begin to use more violent means to confront the government. Such trends have begun to materialise. Phil Gunson, a senior analyst at the International Crisis Group, has suggested that if these continue “Venezuela’s political conflict could morph into a low-intensity civil war.” With the failure of international efforts to broker peace, such as Colombian President Santos’s suggestions of talks in Cuba, there are currently no comprehensive plans on the table for a solution to the crisis. The next significant political staging post are local elections scheduled for December; the opposition are yet to decide whether to participate in them or not.

Commons Debate packs CDP-2017-0157

Authors: Timothy Robinson; John Curtis

Topics: International politics and government, Latin America

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