SHARMINI PERIES: It’s The Real News Network, I’m Sharmini Peries, coming to you from Baltimore. Venezuela’s presidential elections are taking place this coming Sunday, May 20. Even though Venezuela is going through one of its worst economic crises in history at the moment, with hyper-inflation and ongoing shortages of basic consumer items, it appears that President Maduro has a good chance of being reelected.
One of the reasons is because a large part of Venezuela’s main opposition groups, under the advisement of the United States, are calling for a boycott of Sunday’s vote. Meanwhile, the Trump administration is saying it won’t recognize the vote anyway, and that it might impose new sanctions in Venezuela. Here is Vice President Mike Pence at The Organization of American States on May 7.
VICE PRESIDENT MIKE PENCE: Yet more than any other nation in our hemisphere, in Venezuela the tragedy of tyranny is on full display. The blame can be laid squarely at the feet of one man, Nicolás Maduro. The so-called elections in Venezuela, scheduled for May the 20th, will be nothing more than a fraud and a sham. In short, there will be no real election in Venezuela on May 20th and the world knows it.
We’ve already imposed strict financial sanctions on more than fifty current and former senior Venezuelan officials. We cup off the so-called Petro from the United States financial system. Today, I am pleased to announce the United States is designating three Venezuelans with direct ties to the old regime as narcotics kingpins. We have frozen their assets, blocked their access to our nation so they can no longer poison our people with their deadly drugs.
SHARMINI PERIES: Joining me now to analyze Venezuela’s upcoming presidential election is Steve Ellner. He was a professor of history at the Universidad de Oriente in Puerto La Cruz, Venezeula. And he is the author of numerous books, and the most recent among them is Latin America’s Radical Left: Challenges and Complexities of Political Power. Thanks for joining us, Steve.
STEVE ELLNER: Good to be on the program, Sharmini.
SHARMINI PERIES: All right, Steve. As you can see, Steve is joining us via broadband. So, Steve let’s start off with your impressions of the campaign. The two main candidates and- one is President Nicolás Maduro, who is the incumbent, representing the United Socialist Party of Venezuela, and opposition candidate, Henri Falcón. Has either of these candidates, Steve, managed to garner much enthusiasm, as far as their candidacy is concerned? What is happening on the ground?
STEVE ELLNER: Yeah, I think that there is considerable enthusiasm, to the degree that Venezuela is very much split in three camps and the people who are supporting Falcón seem to be pretty gung-ho. They’re not people who identify with Falcón, they are not members of his party. They belong to other parties or they’re independent. But there is a three way split now. And that is interesting because it represents a fundamental change for the Venezuelan political system.
The time that Chávez was elected- actually before he was elected, in 1998, Venezuela became very polarized between the opposition, which was pretty much dominated by the radicals in the opposition who did not recognize Chávez’s legitimacy as president, and the Chavistas. So there was a polarization- two camps. Now, as of last year, ever since Falcón recognized the outcome of the elections for governor in October of last year and thus broke with the opposition which refused to recognize those those results and the legitimacy of that process, you now have a three way system. You have three points of reference. The radical opposition, the Falcón people, and the Chavistas.
SHARMINI PERIES: All right. Now, many opposition parties, as I mentioned in the introduction, are boycotting the vote. What is the official explanation for the boycott and what do you think of their arguments?
STEVE ELLNER: Well, firstly, you mentioned in your introductory remarks that the opposition is influenced by the position of the Trump administration. They kind of vacillated. They were negotiating with the government and the government was accepting some of their demands, one of which was holding elections at an earlier date- they were scheduled for December of 2018. So, when the United States took a hard-line position, most of the parties of the opposition decided to not participate in the elections.
Nevertheless, one of the historical parties, one of the two main historical parties in Venezuela, COPEI, the Christian Democratic Party, is participating. They’re supporting Falcón. And one of their historical leaders, Eduardo Fernández- I don’t know whether he’s still a member of COPEI, but he is a very outspoken supporter of Falcón, and critic of the so-called radical opposition. The campaign manager for Falcón is Claudio Fermin, who is another historical leader. So, you do have a three way split, and Falcón is far from being an isolated figure.
SHARMINI PERIES: All right. Now, in terms of the parties that are not participating in this elections, Steve. Do you think the boycott is going to have an impact on this election in terms of the number of people, obviously, showing up at the polling stations and then, of course, the credibility of the results.
STEVE ELLNER: Yeah. Well, those are two questions. I think the abstention policy of the radical opposition is going to have a big impact, because if Maduro does win, and according to the surveys- one of the questions that is asked is, “Who do you think is going to win?” And a vast majority of Venezuelans, for one reason or another, believe that Maduro will win. So, the policy of boycotting the elections is going to have a big impact. It’s going to mean that Maduro is is probably going to win.
So, that’s unquestionable. Whether that influences the legitimacy and the general perception of legitimacy of the elections, I think that depends on two unknowns. One is whether Falcón- if he does lose, whether he will recognize the legitimacy of the elections like he did on October 15. As I mentioned before, when he was defeated by a Chavista in the state of Lara- he was the governor and he was defeated, and he immediately recognized that those elections were legitimate.
If he were to do that, I think that would have a big impact, because behind him, as I mentioned before, are important historical political leaders and a number of local leaders who belong to all the political parties, Primero Justicia, Acción Democrática, Un Nuevo Tiempo- a lot of the local leaders have broken with their respective leaderships and are supporting Falcón at the local level. So, that’s one factor.
And the other factor is, if Maduro does win, I think it’s going to be very significant whether he wins by one or two percentage points or whether he wins by more than five. You know, in 2013, Maduro defeated Capriles in the elections after Chávez’s death. Those elections were held in April of 2013, and Maduro won by 1.5 percentage points, and Capriles did not recognize the legitimacy of those results. So, if the difference between Maduro and Falcón were to be of that nature, between one and two percentage points, that would be a game changer. That would be quite different, qualitatively speaking, than if Maduro were to win by five or more percentage points.
SHARMINI PERIES: All right. Now, Steve, one of the main reasons that Venezuela is in such great crisis at the moment is the economic problems that continue to be rather serious. The IMF believes that inflation will reach one thousand percent this year and the economy has already shrunk in the past few years past, three years to be specific. Who are the Venezuelans blaming this on, in terms of the situation that most people are in, in terms of scarcity of food and inflation and the struggles that they’re going through?
STEVE ELLNER: Again, there is a three way split. The people in the opposition are claiming that it’s Maduro’s fault, mistaken policies. The Chavistas blame the financial boycott of the Trump administration. I believe that it also has to do with the Obama decree as well, because it signaled a policy of non-investment. U.S. companies that have investments in Venezuela did not expand on those investments. So, that that is what the Chavistas are saying.
And Falcón people are saying both things. You know, Francisco Rodriguez, who is the economic adviser to Falcón and is really his right hand man in these elections, has stated, in an article in Foreign Affairs, that the Trump boycott- the Trump financial embargo on Venezuela, which prohibits U.S. financial institutions- prohibits them from lending credit to the Venezuelan government, to the state oil company. That has had, according to Rodriguez, who’s you know, as I said before, in the opposition with Falcón- and he says in that article that it has had a tremendous impact- last year, it had a very big impact on the Venezuelan economy.
So, that’s pretty much what the Falcón people are saying. They’re saying that mistaken policies on the part of Maduro but also the economic measures of the Trump administration. And I may say that there seems to be somewhat of a contradiction in the Trump administration’s discourse, because the Trump administration talks about a humanitarian crisis. Now, the Chavistas would say that’s overstating it, but nobody denies that the situation here in Venezuela is very difficult. But on the one hand, they say there’s a humanitarian crisis, on the other hand, economic sanctions, which affects the Venezuelan economy.
SHARMINI PERIES: All right. Couple of points you just made Steve about these sanctions and the impact this is having on the ground. Give us a sense of what day to day life is like in Venezuela as a result of these sanctions because often, you know, some sanctions for ordinary people seems very disconnected, abstract. But these sanctions are having a serious impact on the people, not only in terms of the credit ratings that Venezuela has, but in terms of lending, In terms of being able to do business, in terms of being able to have contracts to extract the oil, and so forth. Give us a sense of those factors, as well as the impact it’s having on the ground.
STEVE ELLNER: Surely. You know, when major U.S. companies pull out of Venezuela, as Ford company did- they just close shop and left, as did Clorox, as did Kimberly-Clark. Right at the time of the Obama decree- the Obama decree, which stated that Venezuela was a threat to U.S. national security, an extraordinary threat to U.S. national security. And so, the pulling out of such major companies, naturally, is going to affect the Venezuelan economy. The fact- and this is a point that Rodriguez makes in that Foreign Affairs article- that Venezuela, under normal circumstances, a country in such dire straits is going to get an extension on the loans, the foreign loans.
Will, the Trump castrations, financial embargo, doesn’t allow to U.S. institutions, or anyone in the United States, be it U.S. citizens or anybody else, to lend money to the Venezuelan government. So, they cannot get an extension on their loans. They can’t sell bonds to people of the United States in order to refinance their debt. So, naturally these measures have had a major impact with regard to what’s happening on the ground. You mentioned the inflation, that’s a major problem. There is-
SHARMINI PERIES: A scarcity of goods, basic goods that people need.
STEVE ELLNER: A scarcity of goods- I’ll say that is also a problem. It was worse before. What the Maduro government did was they allowed for increased prices on some commodities. And did have an effect. I mean, the market cannot be ignored. And this is one of the critical comments that I make with regard to the Maduro administration- they don’t seem to recognize the importance of the market and they’ve established price controls, which I would say are justifiable, but not when you have a situation which is such a big disparity between the price of a commodity on a black market, for instance, or the price of a commodity in neighboring Colombia, and the price of the commodity or as a result of price controls in Venezuela.
I mean, the most incredible example of that is gasoline, which is practically free here in Venezuela. So you have, in the case of gasoline, in the case of gas, in the case of electricity to a certain extent, telephone services- well, you have a very big disparity between the cost of production and the prices. So, that that has- now the scarcity is not quite as intense, but there is a scarcity of some products. But the problem, the major problem, is inflation at this point.
SHARMINI PERIES: All right. I thank you so much for joining us today, Steve. And we’ll definitely be back to you right after the election on Sunday.
STEVE ELLNER: By all means, Sharmini.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.