Wednesday, June 29, 2016

Venezuela Shortages: Half Glass Full!

We're starting to see stories by reporters sympathetic to the Venezuelan government that acknowledge the huge problems facing the country, but downplay them. Shortages in hospitals? It sparks innovation!

Another way they have sought to overcome shortages is by developing a barter system with other hospitals in Caracas, keeping tabs on who has what and swapping where they can. Last month, Zayra Medina was briefly arrested by police detectives after she was stopped transporting boxes of medicines in her car. There have certainly been cases of corrupt doctors and hospital administrators diverting drugs onto the parallel market where they can sell them at a big profit, or siphoning them off to the private clinics where most of them also work. Medina insists that this time it was a misunderstanding. She was taking the drugs to the University Hospital where a colleague was in urgent need of them. Both the police and her staff seemed to believe her. Several of them tell me she is an inspired, and inspiring, leader.

This is true in Cuba, where innovation in the face of extreme scarcity is legendary. But it's a model of desperation rather than development. If hospitals are engaged in bartering, then you're in serious crisis.

And remember, this is a Telesur article, which is putting the most positive spin possible on the situation.


Tuesday, June 28, 2016

Who Will Defend Nicolas Maduro? Bueller?

The New York Times has a "room for debate" section today, with four short articles about Venezuela: two are well-known critics, and two are much more sympathetic to the government. The question posed is:

If Maduro were voted out tomorrow, what should be done to get Venezuela back on firm ground? 

What stood out for me immediately is that there is not a single sentence defending Nicolás Maduro, no one trying to say there are reasons not to assume he'll be voted out. As a matter of fact, I cannot find anyone anywhere defending his actions/policies. Mark Weisbrot is left simply arguing that no one wants to invest in Venezuela because of U.S. policy (yes, this is what he argues) while the other sympathetic article calls--quite reasonably--for any post-Maduro government not to dismantle existing community organizations.

So who will defend Maduro?

Bueller? Bueller?


Monday, June 27, 2016

Corn and Protest in Mexico (and Venezuela?)

Erica S. Simmons, "Corn, Markets, and Mobilization in Mexico." Comparative Politics 48, 3 (April 2016): 413-431. (Here is an ungated version).


In January 2007, Mexicans filled the Zócalo in Mexico City to express opposition to rising corn prices and corn imports. Consumers and producers, middle class and campesinos united in the streets to demand access to affordable, explicitly Mexican corn. This article explains the cooperation across class and sectoral lines in the Mexican tortillazo protests by focusing on the meanings corn takes on in the Mexican context. When individuals imagined that they or other Mexicans might not be able to consume a good at the center of daily life and imaginings of nation, they reached across established divides and took to the streets. These insights suggest that to understand responses to markets we need to incorporate the meanings that marketization takes on in our analyses.

This is an ethnographic analysis, which is quite interesting:

The declared universality of the claim to affordable corn and tortillas was readily apparent from the first protests. Participants were defending what they conceived of as a widely shared right. This was not about transportation workers or coffee farmers but rather about a threat to “the people.”

This made me think of Venezuela. If corn to make arepas, a Venezuelan staple, becomes scarcer, will this lead to more broad-based protests?


Sunday, June 26, 2016

Terrible Washington Post Interview With Michel Temer

A Senior Associate Editor with the Washington Post interviewed Michel Temer. There is interesting stuff in there, but the interview is awful. The reporter wants to make clear to Temer that she is on his side (e.g. "you have a good economic team" and "many believe you are doing the right thing") which skews it badly. Questions are also posed in a way that sound tough but give him wiggle room.

Do you think that Brazil is just addicted to corruption? In your system, the president has to go and get votes from the parties in Congress. To get the votes, they have to give favors to the parties. So isn’t it endemic in the way the system is set up? 
I wouldn’t say that it is an endemic problem. I would say that corruption is individualized. It is Congressman A or B or C. The criticism that might be made of our system and would require a political reform is the large number of political parties that we have. We have 32. We need a rule that says only political parties that receive a certain number of minimum votes would be represented.

This is a terrible question. The reporter should've stopped with the first sentence and made him squirm. Corruption is embedded in Brazilian politics and has been so for many years. Instead of pushing him, the reporter answers it for him, and falsely!

Now, you can make a case that a large number of parties requires so much logrolling that it leads to corrupt practices. But that's hardly the single factor that created and perpetuated Brazil's corruption. If Brazil suddenly had four parties, corruption wouldn't go away. By the way, representative democracy requires the president to go and get votes from the legislature.

She ends by answering another question for him, and saying he has personal conviction when in fact he answered a question about Venezuela without mentioning personal conviction.

In short, it's a fawning interview with a corrupt president who has put in office by questionable means.


Friday, June 24, 2016

Pushing More Venezuela Sanctions

Jeff Duncan (R-SC, who is on the House Foreign Affairs Committee) made comments about Venezuela (basically offhand in response to others' comments) in a hearing. What he said depends on who you ask.

Mainstream media:

Duncan suggested the United States impose more economic sanctions against Venezuelan government officials directly responsible for human rights violations.
“Many government officials in Venezuela who are directly responsible for human rights abuses and the deterioration of democratic institutions, public corruption and drug trafficking, remain free to access U.S. financial systems,” Duncan said. “This is not right.”

Read more here:


U.S. Representative Jeff Duncan, chairman of the House subcommittee for the Western Hemisphere, rejected the idea of placing more sanctions against Venezuela during a hearing Wednesday. 
"The Venezuelan people are hurting, so I don't know how sanctions help," Duncan said in response to calls from other members of Congress for sanctions.

Just skimming, I can't find those exact quotes in the video, If you take a look you can see there is a lot of interest in sanctions. It is a hardline hearing attended only by Republicans. There's even discussion about how Nicolás Maduro might be refusing to step down because the U.S. buckled under to Cuba.

The funny thing about the somewhat triumphant Telesur quote is that it misses the gist, which is that Venezuelans are so screwed we shouldn't hurt them more.


Thursday, June 23, 2016

Peace in Colombia

The FARC and the Colombian government have agreed to a ceasefire, which will facilitate the demobilization of FARC combatants (assuming the Colombian people approve the peace deal in a referendum). As the government says, it is the "end of the war in Colombia." The FARC talks of "Bilateral and Final Ceasefire and Cessation of Hostilities."

Even more incredibly, Alvaro Uribe actually said he didn't want to make any declaration based on only first impressions. This from a guy ready to base declarations on any rumor he happened to grab off Twitter.

There will be ceremony today in Havana, where the talks have been taking place. It's the end of another Cold War relic. Cuba hosts talks that get support from the United States in order to end a Marxist insurgency.

This was a war that started before I was born, and which has taken and/or ruined so many lives. The war and all its repercussions made many see Colombia as a failed state into the 1990s. Violence beget violence. Even now, 6 million people are displaced, which I wish got more attention.

This is huge and historic. There is no way for the Colombian state to become real in all the far flung rural areas without the war's end. But the war's end is the beginning for paying attention to rural areas.

There is much to do, but this is great news.


Wednesday, June 22, 2016

Scarcity and Public Opinion in Venezuela

A timely article on Venezuelan public opinion by Mariana Rodríguez at Vanderbilt using LAPOP data. Surprise: scarcity bothers people a lot.

The analysis shows that if you view scarcity as a problem, you are more likely to protest.
Furthermore, the data also provide evidence that concern about the scarcity of basic goods and dissatisfaction with medical services motivate protest participation, while views of corruption do not.
Corruption alone doesn't do it, but when you cannot get basic goods, then you protest.

And this is from 2014 data. Imagine now.


OAS & Venezuela: What Should We Expect?

Tomorrow the OAS will be meeting to discuss the question of invoking the Democratic Charter, with lots of intense discussions going on ahead of time. What should we expect?

As I've written before at Latin America Goes Global, I think the most that can happen with the OAS and Venezuela is real regional dialogue about the state of democracy there. Nothing else really can happen.

Since the Democratic Charter was approved in 2001, it's been little used. With the 2002 Venezuelan coup, the OAS passed a quick resolution but pro-democracy Venezuelans solved the situation themselves quickly before any other action was taken.

Here was the Bush administration (specifically Roger Noriega) shortly after Hugo Chávez was returned to power, on the context of discussing the Democratic Charter:

According to the best information available at the time, President Chavez had fired his vice president, dismissed his cabinet, and resigned, and was arranging another hasty trip to Cuba.  Therefore, on April 12, Pedro Carmona swore himself in as provisional president, called for new elections, and ordered that the National Assembly and Supreme Tribunal of Justice be dissolved.  President Chavez returned to office late at night on April 13.

It's simply comical. That gives you a good sense of how the Bush administration viewed the Democratic Charter.

In 2009 the OAS suspended Honduras because of the coup there. The result? Nothing. Latin America--including Venezuela--pretty much looked to the United States to resolve the crisis.  In 2012, the OAS had no interest in backing Fernando Lugo after he was removed from power, and you could really say the same about Brazil in 2016.

If Latin American leaders don't want the OAS to work, then it won't. Even Mauricio Macri, a harsh critic of the Maduro government, values maneuvers to get an Argentine (Susana Malcorra) named Secretary General of the UN more than the Democratic Charter.

Therefore I wouldn't look for suspension of Venezuela from the OAS, or even a resolution with harsh condemnation. With Tom Shannon currently talking to the Venezuelan government, we might see some more commitment by Maduro for dialogue/negotiation, but the difficult part is the recall referendum, which both sides have publicly declared non-negotiable. At this point dialogue that doesn't include the referendum is essentially equivalent to stalling, which benefits the government.


Tuesday, June 21, 2016

Latin America and China

The Inter-American Development Bank has a new issue of its journal Integración & Comercio dedicated to trade with China. As you might guess, it has a very positive spin. I am glad, though, that at the beginning it recognizes a massive problem:

Este contexto pone de relieve la urgencia y la necesidad de diversificar las exportaciones de la región a China, que continúan altamente concentradas (soja, cobre, mineral de hierro y crudo representan cerca del 50% de las exportaciones). Es cierto que los commodities probablemente continuarán siendo el mayor negocio de ALC en China, pero la dinámica de crecimiento de este país sugiere que para mantener el ritmo de crecimiento de las exportaciones, América Latina y el Caribe tendrá que apelar a un portafolio de bienes más diversificado. 

You can talk about China all you want, but heavy dependence on commodities is not the foundation of a healthy relationship. Unfortunately, that point does not get driven home very much after the beginning.

One other thrust of the issue is that Latin America should learn from the Chinese economic model. Given that the model is based on authoritarian rule, this is problematic. The articles are striking apolitical. More precisely, they seem to pretend that politics does not exist.

Nonetheless, check it out if you want to get an establishment view of how Latin America should engage with China.

Update: From the NYT, here's a snapshot of the Chinese model,

The training session started with a harsh public shaming. A performance coach took to the stage and asked eight employees at a Chinese bank to explain to a room of their peers why they had fallen short. 
“I didn’t cooperate well,” a woman said. 
“I wasn’t courageous enough,” another confessed. 
Then the session took a bizarre turn. The coach brandished a wooden stick and shouted, “Get your behinds ready!” He proceeded to slap the employees on their rears, going down the line four times. A woman recoiled in pain, and several workers gasped.


Money, Nuns, and Guns in Argentina

Kudos to Charlie Devereux at Bloomberg for one of the most entertaining ledes I've seen in some time:

When a man was caught hurling bags of money over the walls of a monastery in a sleepy town outside Buenos Aires last week, President Mauricio Macri benefited more than the nuns. 
The man turned out to be former Public Works Secretary Jose Lopez, second-in-command at the Planning Ministry for more than a decade and a close collaborator of the late President Nestor Kirchner. The bags contained more than $9 million in U.S. dollars, euros, Japanese yen and even Qatari riyal. Police also seized a Sig Sauer assault rifle and several watches.

You can't make this stuff up. It has split Kirchner supporters, and of course can only benefit Macri, who is pushing a variety of controversial economic policies with decidedly mixed results.


Monday, June 20, 2016

Cuban Coffee Comes to the United States

It appears that Cuban coffee will be the first product sold in the United States.

Swiss-based Nespresso announced Monday that it will sell long-restricted coffee throughout the U.S. starting this fall, the latest evidence of renewed ties between the United States and Cuba after five decades of estrangement. 
The coffee will first be sold as a limited edition, called Cafecito de Cuba, in stores, online and over the phone, with the eventual goal of making it a regular product.


And Le Cunff said the exotic, forbidden aspect of the coffee is a lure itself. 
"Our customers expect us to bring new coffee experiences, and they expect to be surprised," he said. "We know that with our U.S. customers, there is a high level of curiosity and excitement to have this coffee. So we expect a high level of response."

So a combination of scarcity (initially intentional) and the exotic will increase demand. I have to wonder whether that demand will continue very long. The excitement of drinking previously forbidden coffee will fade quickly. If Cuban producers cannot produce in high volume, then the price in the United States will stay high, and most people simply won't drink it. That would work just fine for the other Latin American coffee producers who will now face new competition.


Venezuela's Dead End

Venezuelans are looting because they are not getting enough food. The government blames both the shortages and the looting on the opposition. As David Smilde notes in a quote, imports are way and there just isn't enough food.

Meanwhile, the opposition is pushing to get signatures and the government is insisting no vote will happen this year, while labeling hundreds of thousands of signatures invalid.

This doesn't seem sustainable--if people cannot get food, then they will want results from the government. The pressure on Maduro is intense. In the history of Latin America, this is the time when the military has traditionally stepped in, either as "moderator" or "director" (to take Alfred Stepan's categories). Rumors of military coups (usually focused on keeping Chavismo without Maduro) have been more or less constant in Venezuela. The military is involved in making arrests, which is never a good thing. The Defense Minister is saying the military can act against opposition leaders, which is a disastrous thing.

To avoid that, some type of resolution has to be found. Since internationally-sponsored negotiations are currently going nowhere, I am not sure what that would be.


Thursday, June 16, 2016

Authoritarian Successor Parties in Latin America

James Loxton has a post at The Monkey Cage about "authoritarian successor parties" (parties that emerge from authoritarian regimes but continue after the transition. Using Keiko Fujimori's loss as a starting point, he notes how strong ASPs are globally. And generally, this doesn't matter much, which is a good thing.

ASPs may even have some positive effects on democracy by helping to include former authoritarian incumbents in the new regime (thus discouraging them from becoming “spoilers”). This could inspire autocrats elsewhere to initiate their own transitions to democracy by showing that there is life after dictatorship.

I think this point is the most salient. Negotiated transitions are facilitated by promises of future participation. This is also how you get rebel groups (like the FMLN and perhaps eventually the FARC) to lay down their arms and join the political system. If you block that participation, you're asking for trouble.

At the same time, there are lot of apples and oranges. Chile's UDI was a strong, institutionalized party (which, incidentally, still has never won the presidency) whereas Alberto Fujimori was a personalist leader without a true functioning party behind him. There are also, of course, different kinds of transitions. Fujimori's flight from Peru bears little resemblance to the electoral loss of the PRI in Mexico.

But an interesting topic, and I see he is working on a book, which should be worth checking out.


Bad FDI News in Latin America

The UN Economic Commission for Latin America and the Caribbean reports that foreign direct investment into Latin America dropped 9.1% in 2015. If you read a little deeper, then you see that the aggregate number tells only part of the story. Brazil really drags that number down.

For all the talk of violence in Mexico and Central America, FDI is up there (up 18% in Mexico) in large part because these are not based solely on primary products, prices for which are down. And for all the talk of loss of U.S. influence, the U.S. is by far the biggest source of FDI in the region.

But overall this is bad news. FDI is up globally but down in Latin America, with 2016 showing no signs of improvement, especially given the combination of recession and political crisis in Brazil.

What we also know, of course, is that Latin America continues to do a poor job of weaning itself off of primary products in general. Beyond Brazil, dependence on commodities leads to these boom and bust problems.


Wednesday, June 15, 2016

Latin America and Venezuela

John Kerry announced talks will be held with the Venezuelan government. The U.S. side will be led by Tom Shannon, who is an old hand at this. This comes right after Kerry supported Luis Almagro's push for invoking the OAS' Democratic Charter and launching regional discussion about Venezuela's crisis.

With these positive examples in mind, we remain strongly committed to working with all OAS member-states in order to remedy the deeply troubling situation in Venezuela.  Like all people of the Americas, Venezuelans have the right to use constitutional mechanisms to express their will in a peaceful and a democratic manner.  The United States joins with Secretary General Almagro and others in the international community in calling on the Venezuelan Government to release political prisoners, to respect freedom of expression and assembly, to alleviate shortages of food and medicine, and to honor its own constitutional mechanisms, including a fair and timely recall referendum that is part of that constitutional process.  The secretary general’s invocation of Article 20 of the Inter-American Democratic Charter will open a much-needed discussion about Venezuela within this organization’s permanent council, and we stand ready to participate in that discussion, and along with our OAS partners, help facilitate that national dialogue that will ultimately address the political, economic, social and humanitarian dimensions of this crisis.  I emphasize the humanitarian dimensions.  Just this morning, we learned of people who are dying in a food line, or waiting to get medical help that they need. 

In recent months a key U.S. goal has been to avoid complete implosion in Venezuela. Violence and/or a power vacuum just allows more drugs to flow, more humanitarian disaster for Colombia, and more disintegration of PDVSA.

Diplomacy has been good cop, bad cop, though the "bad" is pretty mild. There is not much the U.S. can do unilaterally. What we can hope is that U.S. actions help prompt Latin American countries to do more. The State Department knows that very well:

“If it’s the U.S. versus Venezuela, that plays into Maduro’s hands,” explained a senior administration official. “It has to be led by Latin Americans. It can’t be led by us.”

Yes, this is the crux of the matter. Latin America needs to take charge here.


Tuesday, June 14, 2016

Oil Crisis in Venezuela

Virginia Lopez at Al Ajazeera has a very nice piece on the oil disaster in Venezuela. We all know that oil prices are low, but PDVSA is producing less and less. The big recent news was that May 2016 saw a decline of 120,000 barrels a day. That means less money for the state, but it also means an environmental disaster because there are lots of leaks due to lack of maintenance.

"What you have now is a company that favours loyalty above technical expertise," said a mid-level oil engineer who spoke on condition of anonymity for fear of reprisals. "A lot of the personnel that had the specialised knowledge felt disappointed and left to work in Canada, Colombia or Saudi Arabia." 
According to the engineer, PDVSA is so politicised these days that in the company "every Friday is a red Friday", in honour of the colour Chavez chose as the banner of his political movement.  
"We are made to wear red to show our allegiance to the government party. The few times I haven't I can feel colleagues glaring," he said. "The irony is that things have gotten so bad with them in control that even they are leaving."

The result? Venezuela is talking to China about a grace period for their oil-for-loans deal. Venezuela needs a year of just interest while Venezuelan crude is under $50 a barrel because it is so cash-strapped. Without oil revenue, Venezuela is lost.

As I was writing yesterday, it's unclear where this is all headed. There is serious political and economic crisis, but negotiations broke down. We can just hope that more are taking place privately.


Monday, June 13, 2016

No Venezuela Recall This Year

Given how high the stakes are and how likely it is he would lose, Nicolás Maduro says no recall referendum will happen this year. For a reminder, here is my post about the timing. What that means is that a Chavista will remain in power (it would be the VP if Maduro lost) and the economic can gets kicked down the road. Staying in office until 2018 was central to the government's offer to the opposition, which was rejected.

The risk of that strategy is that people are starting to protest and loot. If at some point Maduro feels the need to get the military involved, he faces the potential of military backlash. The same goes for VP Aristobulo Isturiz if he were to take over.

Negotiations failed. The OAS effort failed. The recall referendum will not prompt new elections. Oil prices remain low so there will be no infusion of cash. Inflation is triple digits and may soar over 700% this year. The currency is a disaster.

Where is this heading?


Thursday, June 09, 2016

Criticizing NGOs in Latin America

During the Cold War, those opposed to U.S. policy toward Latin America worked closely with non-governmental organizations. In classes I use Kathryn Sikkink's Mixed Signals, which analyses in detail how NGOs were instrumental in compelling the U.S. government to accept the idea of human rights. International organizations like the Inter-American Comission of Human Rights were also important--though not always effective--avenues for addressing the abuses of Cold War military dictatorships.

Now, all that is turned on its head. The Latin American left sees both NGOs and human rights organizations as tools of U.S. imperialism.

The reason, of course, is that these types of organizations are highly critical of those in power. If you're president, they make you angry and so you lash out. Dictators like Augusto Pinochet did so, and democratically elected leaders like Rafael Correa do so. Their supporters then jump on the bandwagon as well. Civil society itself is called into question, as anyone critical of the government by definition becomes an agent of an outside power. During the Cold War, you were a tool of the Marxists; nowadays you're a tool of the Obama administration.


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