Eleven newborn babies died recently due to a respiratory bacteria outbreak in the neonatal unit of a hospital in the city of Maturín in Venezuela's Monagas state. According to press reports, in May the director of the “child protection system” at the Central Hospital of San Cristobál in Táchira state said that at least 70 sick babies had perished in 2016 because the hospital lacked supplies to care for them.
Dire food and medicine shortages, the collapse of the health care, sanitation and transportation infrastructure, and hyperinflation have all led to speculation that the Venezuelan government, headed by Nicolás Maduro, will soon fall. But the Cuban-backed regime is entering a new phase of self-preservation. Havana has no intention of losing its hold over its most valuable satellite.
The Venezuelan government's most urgent task is to fend off demands for a presidential-recall referendum this year—though the right to hold it is guaranteed by the constitution. If President Maduro were to lose that vote, there would have to be an election within 30 days. The next Cuban-proxy candidate put forth for the United Socialist Party of Venezuela (PSUV) would almost certainly lose.
If the referendum can be delayed until next year, then even if Mr. Maduro loses, his PSUV vice president would finish his term, which ends in 2019.
The opposition is pushing hard for the government to abide by the constitution and is seeking help from the international community. The Obama administration is instead supporting a “dialogue” between the government and the opposition, led by the former president of Spain, the Socialist Workers' Party's José Luís Rodríguez Zapatero. This delay tactic is designed to help the PSUV retain power while it finishes militarizing the government so it can rule indefinitely.
That process accelerated last week when Mr. Maduro put the defense minister, Gen.Vladimir Padrino López, in charge of all cabinet ministries. It means that Venezuela is now run by a quasi-military junta with the general sharing power with Mr. Maduro. Gen. Padrino will also head the newly created “Great Mission of Sovereign Supply,” which will manage the supply and distribution of food. The military also took over the country's ports, which until now have been under civilian control.
Latin Americans call this kind of handover of power a “self-coup,” because it shifts authority from elected officials to outsiders who are not constitutionally in line to succeed the president.
It is unlikely that this was Mr. Maduro's idea. Rather, having taken note of the president's unpopularity, his Cuban handlers are making adjustments. Though the 53-year-old Gen. Padrino once trained with the U.S. military, he has found favor with the Castros. In February the general was named to head a new military-industrial mining, oil and gas company that will rival the state-owned oil company PdVSA.
Venezuela is also adjusting its socialist economic model, using a template the Castros borrowed from Russia's Vladimir Putin . With the assistance of Mr. Obama, they are inviting in U.S. capital investment so they can consolidate power for the next generation.
Venezuela unwittingly displayed to the world the failure of the Bolivarian revolution's economic plan on July 10 when it reopened the once-busy Venezuelan border crossing near the Colombian city of Cúcuta. It had been closed for almost a year. In a 12-hour period, an estimated 35,000 Venezuelans surged into Colombia to buy food and other necessities. There was similar surge this weekend with another temporary opening.
Farther north in the state of Zulia, my sources say, the chavista government has been permitting entrepreneurs to bring Colombian goods across the border duty-free and sell them in the formal economy at free-market prices since March. On June 27, Zulia's secretary of the interior, Giovanny Villalobos, admitted to the Venezuelan news outlet La Verdad that this is happening. The aim, he said, is “to guarantee” the importation of food for the middle class, put an end to the black market and allow the government to help the truly needy.
It would be a mistake to read this as a surrender to democratic capitalism. Just as the Cuban police state is making careful use of American capitalists, Caracas is making use of the market for survival.
It wouldn't be surprising to learn that the Obama administration is unwilling to back the restoration of Venezuelan democracy because that would put at risk its efforts to solidify the U.S.-Cuban friendship. If a new Venezuelan government were to stop financing Cuba—which it continues to do despite its own distress—the island would sink and Mr. Obama's legacy “achievement” would likely sink with it.
An equal disincentive for Mr. Obama to help Venezuelan democrats is that, with Cuban mentoring, Caracas has built a weapons arsenal for its civilian militia. Rumors abound that a successful recall vote would trigger the distribution of those weapons and an ugly outbreak of violence on a grand scale. That may be unavoidable, but Mr. Obama no doubt would prefer to be out of the White House if it happens.
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Petroleumworld News 07/25/2016
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