Tuesday, November 12, 2013

Venezuela’s ‘Economic War’ Heats Up

With the National Assembly poised to grant Venezuelan President Nicolas Maduro decree powers this week, the president’s “economic war” may deepen in the coming months.

The Venezuelan economy is in trouble. While, as Mark Weisbrot points out, it is nowhere close to becoming the “Greece of Latin America,” mounting inflation poses a serious problem in the South American country. The annual inflation rate has risen to 54.3 percent, a 16-year high, causing prices to skyrocket and contributing to shortages of consumer goods.

Instead of cutting inflation through conventional methods of reducing the money supply, Maduro has opted for a more combative approach to price gouging and speculation. The president has announced increased inspection of stores to make sure they aren’t overcharging consumers, and is cracking down on those that are. On Friday, Maduro ordered troops to take control of a five-store chain of electronics stores after its prices were deemed unreasonably high, instructing owners to sell their goods at reduced prices and liquidate their inventories.  The move led to looting and brawls, and on Sunday authorities announced the arrest of looters and store managers alike as part of what Maduro called an “economic war” against price speculating businesses.

The president appears to be doubling down on this approach. El Nacional reports that in an official “cadena” broadcast last night, Maduro ordered the country’s militia corps to assist the national guard in enforcing price controls. He also announced that Attorney General Luisa Ortega Diaz and Supreme Court President Gladys Gutierrez had authorized the creation of special tribunals to expedite prosecution of price speculation cases. The AP notes that the president ended his address with a plea for Venezuelans to remain calm. “There's no need to sleep outside store doors,” said Maduro. “Nobody should despair. Nobody should get anxious.”

The opposition has accused the government of using this as a populist ploy ahead of the December 8 municipal elections. Marino Alvarado, general coordinator of human rights group PROVEA, told local press that he saw the announcement as clearly linked to the election. “Lines at [electronics stores over the weekend] united Chavistas and the opposition alike. There were radical members of the opposition supporting the initiative, which leads me to believe that there is an electoral logic behind all this, looking for votes on December 8,” Alvarado said.

By contrast, Venezuela political analyst David Smilde claims that President Nicolas Maduro sincerely believes in his own rhetoric of “economic warfare.”  Smilde suggests that Maduro has systematically ejected policy advisors from his inner circle who, like Finance Minister Nelson Merentes, advocated more pragmatic approaches to inflation. As a result, the president is now unaware of the wisdom of backing away from his “quixotic” war on speculation and hoarding, or perhaps even unable to do so. According to Smilde, this has the potential to “seriously undercut Chavismo’s viability as a democratically supported political project.”

Interestingly, Maduro’s economic war could be just beginning. National Assembly President Diosdado Cabello announced that he expects the legislature to finally approve the president’s long-awaited request to be granted decree powers for 12 months. Telesur reports that Maduro has confirmed this, and hopes to use the authorization to support his economic agenda. In his address yesterday, the president promised to “immediately put in place a law to set the base rates of earnings of all economic activities of the republic to structurally establish the mechanisms of the economy.”


News Briefs
  • The Mexican government has demanded answers about a Mexican light aircraft that was shot down in Venezuela last week in the western state of Apure.  Animal Politico reports that Mexican Foreign Minister Jose Antonio Meade met with the Venezuelan ambassador to the country on Monday, who informed him that authorities believed the plane was carrying a shipment of illicit drugs.
  • Despite the fact that Peruvian lawmakers’ recent decision to elect Congresswoman Martha Chavez as head of a legislative committee on human rights was opposed by leading human rights groups in the country, it appears she is there to stay. Peru21 reports that Chavez, who is controversial because of her denial of past state abuses, was re-appointed as head of the commission after a second vote on the matter was held yesterday. The National Coordinator of Human Rights has called on the entire committee to be dissolved, and some in Congress have asked the legislative committee on ethics to assess the legitimacy of Chavez’s appointment, according to El Comercio.
  • Argentine President Cristina Fernandez has been given the final go-ahead from doctors to resume her presidential duties next week. Telam reports that Fernandez will take office on Monday, though she will be unable to travel by plane or attend large public events for the next month.
  • Miami Herald reporter Jim Wyss, who was detained by Venezuelan military officials for nearly 48 hours last week after conducting interviews for a story on the contraband trade along the border with Colombia, has written about the experience. Wyss provides an interesting look at the work of intelligence agents in Venezuela, and of their hostile view towards the Miami press.
  • Colombia’s second-largest guerrilla group, the National Liberation Army (ELN), has released a statement expressing wary support for the recently-announced accord on political participation reached between the Revolutionary Armed Forces of Colombia (FARC) and the Colombian government.  The government has not yet publicly engaged in talks with the smaller rebel group, though both sides have expressed a willingness to do so.
  • After a six-month investigation, on Friday a team of forensic experts in Chile has found no traces of poison in the remains of deceased poet Pablo Neruda, La Tercera reports. While for many the announcement puts end to years of speculation that Neruda -- who died just 12 days after Augusto Pinochet took power -- was killed by state security forces, others remain unconvinced. The L.A. Times notes that members of the Chilean Communist Party and relatives of Neruda say they will request more samples to be taken.
  • It seems Colombian President Juan Manuel Santos’s public approval has recovered somewhat after the hit it took following mass protests in August. A new nationwide Gallup poll reveals that 27 percent of Colombians said they would vote for Santos in May’s presidential election, 12 points ahead of Uribista candidate Oscar Ivan Zuluaga, his closest rival. However, as El Pais reports, the leading candidate is “none of the above,” with 30.6 percent of respondents saying they would cast blank ballots. While he is expected to run, Santos has not yet officially announced a reelection bid, and has until November 25 to do so.
  • BBC Mundo has an excellent profile of four former leaders in Chile’s student movement who are running for legislative seats in Sunday’s elections. While some of these candidates, like 26 year-old Giorgio Jackson, have opted to run on their own independent tickets, others have joined traditional leftist parties in the country. Of these, perhaps the most notable is Camila Vallejo, who is the Communist Party candidate for a representative of the working class Santiago neighborhood of La Florida.
  • In July, the Foundation for New Ibero-American Journalism (FNPI) and the Colombian city of Medellin launched a new prize to honor quality journalism in the Americas and the Iberian Peninsula: the Gabriel Garcia Marquez International Journalism Award. This week, the FNBI announced the top ten finalists and those nominated for official selection. In what will come as no surprise to Latin America watchers, among the finalists were articles published this year in some of the most popular investigative journalism news sites in the hemisphere, including El Faro’s coverage of the MS-13-Barrio 18 gang truce,  La Silla Vacia’s coverage of garbage collection in Bogota and Agência Pública’s reporting on the ouster  of ex-Paraguayan President Fernando Lugo.
  • Guatemalan news site Plaza Publica has a critical editorial on the failure to tackle corruption within the armed forces of the Central American country. While President Otto Perez Molina has praised the military as the only institution capable of “self-purging” itself of corrupt elements, the news site’s editorial board claims “the army remains a shadowy ministry, infiltrated and yet relied upon to clean up other institutions.”