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Latin America

A "historic rupture" in Venezuela

Sunday's Constituent Assembly election in Venezuela was the fruition of former president Hugo Chavez's longstanding socialist dream to end democracy. But is the country now headed to a Doomsday scenario?
2 Ago 2017 – 11:38 AM EDT

At least one thing is clearer now after Venezuela’s widely denounced election on Sunday.

President Nicolás Maduro is a “dictator,” according to the Trump administration.

Of course, that may not mean a whole lot coming from a White House itself at sixes and sevens over allegations of cover ups and collusion. Maduro himself was quick to point that out, noting that Trump lost the popular vote by a wide margin of three million votes.

Putting that aside, the Maduro government has now widely delegitimized itself as a totalitarian regime. Gone is any semblance, or pretense, of democratic rule.

So, what next, everyone is asking?

In his victory speech on Sunday Maduro offered few if any solutions to the country’s deepening economic woes, rampant inflation, falling oil production, or widespread lack of food and medicine. Instead, he focused mostly on regime survival hoping that a deflated opposition would simply melt away and leaves him to rule unobstructed for as long as he wishes.

That was, after all, the long sought-after goal of his mentor, the late Hugo Chavez, the father of Venezuela's so-called 21st century socialist project.

"Historic rupture"

In his speeches Chavez liked to talk about the need for Venezuela to undergo a 20 year “transition to socialism” after which the traditional trappings of democracy would no longer be needed. He called this the “historic rupture” on the path to a Cuban-style socialist state where one party takes care of the essential needs of the population.

That’s essentially what happened on Sunday, argues Phil Gunson, Andean regional analyst for the International Crisis Group, who has been based in Caracas since 1999. Though not quite the way Chavez had envisaged.

Chavez thought the moment had come in 2007 when he held a referendum to abolish presidential term limits, give the president control over the central bank and the country's international reserves, as well as control over state governors and mayors.

He narrowly lost.

“Maduro pulled this (Sunday’s Constituent Assembly) out of the toolkit in desperation, since there was nothing else left,” said Gunson.

Maduro tried to usurp the powers of the National Assembly in March but was thwarted again after his handpicked Supreme Court got cold feet. That led to the four months of street protests and Venezuela’s withdrawal from the Organization of American States.

So Maduro came up with the idea of a Constituent Assembly, essentially returning to Chavez’s plan in 2007 to rewrite the constitution, and make “the historic rupture” with democracy.

Opposition crushed

To be sure, Sunday was a crushing blow for Venezuela’s opposition parties, soon to be shut out of the National Assembly, the one political area they had won back control over in 2015, after 16 years of dominance by the ruling 'Chavistas'.

On Monday, Maduro wasted no time: jailing opposition leaders Leopoldo Lopez and Antonio Ledezma.

A protest march is scheduled for Thursday, but after this weekend it will be telling to see how much energy the opposition has left. “Sunday’s election extended the agony, but nothing will be able to stop change from coming,” said Carlos Vecchio, an ally of Lopez, exiled in Miami. “Maduro only deepened the crisis and accelerated his demise.”

The Trump administration reacted predictably with more sanctions, adding Maduro's name to a list of "specially designated nationals," freezing their U.S. assets and barring them from travel to the United States.

U.S. sanctions are of questionable effect. Instead, Maduro basked in his special designation, puffing out his chest and accepting the stigmatization as if it were a badge of honor.

“I think core Chavistas learned to expect these sanctions. They see it as part of the country risk of working with the government,” said Javier Corrales, a political science professor at Amherst College in Massachusetts.

“I'm afraid too much direct intervention would be fruitless or even counterproductive,” added Corrales. “The U.S. must spend more effort helping Latin American countries interested in pressuring Venezuela or persuading those who are still siding with Venezuela. The U.S. has economic bargaining leverage over Venezuela, but little political leverage at his point.”

As Corrales points out, Venezuela's economy is Maduro's weak point. Indeed, for all its oil wealth, Venezuela could be on the verge of defaulting on a massive debt load in a matter of only a few months. Mounting international isolation and new sanctions by the United States will also heap pressure on its leaders.

While Maduro may have bought a bit more extra time for himself in power, it remains hard to see how long that will last.

Achilles heel

Maduro’s greatest asset – the world’s largest reserves of oil and gas – is also his greatest Achilles heel. Venezuela depends on oil exports for 90 percent of its foreign earnings. However, it only has two cash paying customers left – the United States and India. Shipments to China, it’s second largest client, bring nothing in return besides paying off previous loans.

That leaves Maduro’s finances running - almost literally - on fumes.

"It would be disastrous for Venezuela if the U.S. suspends importing 700,000 barrels per day of Venezuelan crude," said Jorge Piñon, director of the Latin America and Caribbean Energy Program at the University of Texas at Austin. That would bring about a total social and economic collapse.

The Trump administration is wary of going down that road. "The worry is about the social consequences that this will bring about. The unknown will be worse than the current situation," said Piñon.

"That's the Doomsday scenario," he added.

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