Sunday, April 24, 2022

Book on the Venezuelan crisis by William Neuman



 

William Neuman, who had spent four years from 2012 to 2016 as New York Times correspondent in Caracas during the peak of the Venezuelan crisis has diagnosed correctly the reason for the Venezuelan political and economic collapse. He says, “It’s not so much that Venezuela produced oil; it’s that oil produced Venezuela”. Oil has played not only an economic role but has also shaped the politics and culture of Venezuelans which have lead to the current crisis.

 

Before the discovery of oil in 1914, the country was relatively obscure except for the fact that it was the land of Simon Bolivar, the liberator of South America. By 1928, Venezuela was the world’s top oil exporter and the second-biggest oil producer, after the United States. Since then, the Venezuelans lived off oil and have neglected other areas. The country has so much of fertile land, mineral resources, hydroelectric potential, beautiful beaches and pleasant climate. These resources are sufficient to be a prosperous nation, even without oil. But when the easy money from oil started coming, the Venezuelans abandoned all the other resources and started living exclusively on oil income. During high oil prices, middle class Venezuelans used to go for shopping to Miami and freak out on purchase of luxury goods. At the same time, the government also went on a spending spree and borrowed money recklessly from international capital market. The corrupt politicians cleaned up the treasury and took them abroad in collusion with business people. When the oil prices went down, the governments struggled to pay foreign debt, cut down developmental and welfare budgets and imposed austerity. At these times, people rose in protests leading to change of governments through elections or coups. Even Chavez repeated the same cycle and got the country into a large Chinese debt trap. He and his successor Maduro mismanaged the economy causing chaos with hyperinflation, currency changes and exchange value depreciations.

 

Neuman has visited many parts of the country and interviewed ordinary Venezuelans from different walks of life. He has filled up most pages of the book  with the tragic stories of the misery and sufferings from poverty, shortage of essential items, electric power cuts, crime, violence and corruption. These are, of course, well known at the macro level. Neuman has given names and faces to the victims of the Chavista misrule and mismanagement.

 

But Neumann gives new details on the self-proclamation of Juan Guaido as interim President and Guaido's involvement in the attempt to invade Venezuela from the sea by a bunch of mercenaries in 2019.

 

According to Neuman, Guaido’s proclamation as president was not based on the consensus of the opposition groups nor was it done properly. It was done by one of the opposition groups in a hasty collusion with the American officials. The proclamation should have been done in the National Assembly after proper notification. But it was done as a surprise in an outdoor event. Some of the lawmakers were taken by surprise and asked:  Why hadn’t the swearing in been discussed and approved in advance by the full assembly? Why was it done on the fly, in the street instead of in the legislature?. Within minutes of Guaido’s swearing himself in, the White House issued a statement from President Trump, recognizing Guaido as interim president. President Ivan Duque of Colombia, President Jair Bolsonaro of Brazil, and Chrystia Freeland, the Canadian foreign minister, were at the World Economic Forum in Davos, Switzerland; they called an impromptu news conference and, together, recognized Guaido as Venezuela’s president. A South American diplomat told Neumann that Washington’s insistence on going first put its Latin American allies in a bind, exposing them to criticism that they were doing the White House’s bidding when they recognized Guaido. The diplomat said: “People are going to say that they led us by the nose”. Guaidó wrote in an op-ed in The New York Times a week later. “It was not of my own accord that I assumed the function of president that day, but in adherence to the Constitution.” But that argument failed to acknowledge the intense debate within the opposition about what to do and that there were other options under consideration, which were ignored under pressure from the neocon elements of Washington DC.

 

Neumann has interviewed US officials and Venezuelan opposition leaders and brings out details of invasion attempt to overthrow President Maduro. According to him the coup leaders signed a contract on October 16, 2019 to invade Venezuela. According to the contract, Silvercorp, a security company of an American mercenary, would be paid $213 million “to capture/detain/remove Nicolas Maduro” and, in his place, “install the recognized Venezuelan President Juan Guaido.” The contract—which was kept secret at the time—spelled out rules of engagement and identified targets (Maduro and others) that could be “neutralized.” It required foreign fighters to wear Venezuelan uniforms and cover their faces “to protect the face of the project as Venezuelan only.” The contract was signed by Goudreau an American mercenary and Rendon, a Venezuelan who was identified as the High Presidential Commissioner for General Strategy and Crisis Management, as well as a Venezuelan legislator close to Guaido named Sergio Vergara, who had been working with Rendon. It was also signed by Guaido. Goudreau made an audio recording of a video conference he had with Guaido, in which they discussed signing the contract. In the recording, Goudreau asked Guaido if he had any concerns. Guaido gave a nervous laugh and responded, in English: “A lot of concerns, but we’re doing the right thing for our country.” There was discussion of the need to sign two copies of the document, in its English and Spanish versions, and to scan and send the signed contracts. At the end of the recording, Guaido has denied signing the contract. But it was negotiated and signed by his representatives and it would have had no validity without his signature—he is the only person named in the document as a party to the contract (his name appears twice). But shortly after it was signed, the deal fell apart. The contract required the Guaido government to pay Silvercorp a $1.5 million retainer within five days of signing. They never paid it. Goudreau insisted on being paid. Rendon said that he gave Goudreau $50,000 to string him along. Finally in early November there was a blowup. Rendon said that he met with Goudreau and presented him with a letter canceling the agreement. (It’s worth asking why the contract needed to be canceled if Guaido had never signed it.) He said that Goudreau refused to sign the letter and stormed out. Goudreau accused Guaido and Rendon of backing out of their deal and he went public, providing images of the contract, with Guaido’s signature, to a Miami-based Venezuelan journalist named Patricia Poleo, who posted them online.

 

While Neuman has given a full account of the omissions and commissions of Chavez, he has ignore the fact that Chavez was a creation of his predecessors and opposition leaders. During the election campaign in 1998, Chavez asked, “ Venezuela is a rich country thanks to oil. Why are so many millions continue to be poor?”. The poor voted for him and the middle class also supported him desiring change. The two large traditional oligarchic political parties which were in power for about fifty years were routed completely. Thereafter the opposition boycotted the elections fearing certain defeat and getting discredited. This gave Chavez to get majority in the Assembly, change the constitution and get away with so many authoritarian decrees and decisions, in the absence of effective opposition. The opposition ran away from electorally challenging Chavez and instead tried all kins of unconstitutional and undemocratic means and conspiracies to overthrow Chavez in collusion with the local oligarchy and Americans. In 2002, the opposition carried out a massive strike stopping the production and exports of oil, endangering the vital oil revenue for the government and causing shortage of petrol and diesel. Chavez retaliated by sacking over 15000 PDVSA staff and filled the position with loyal Chavistas. The opposition succeeded in removing Chavez from power through a coup in 2002. Many businessmen and oil company executives supported the coup. But the coupsters mismanaged the post-coup settlement and cut out the military in the share of the spoils. So some of the generals did a counter coup and brought Chavez back to power, releasing him from the island jail where he was imprisoned. Chavez went on a spree of revenge. He started systematic destruction of industries and business and imposed controls and restrictions to teach a lesson to the business community. He placed military officers in civilian positions and allowed them to make money. The military became an accomplice and a stake holder in the Chavista regime of chaos, corruption and control. When he died of cancer, the Cubans influenced him to appoint Maduro as President. Maduro, who had political training in Cuba during his youth, was considered as a controllable asset by the Cubans. Maduro had no charisma or grass roots support. He could not control the different Chavista and military factions who were more powerful than him. So he could not take decisions or implement any policies effectively. This lead to economic disaster with hyperinflation and devaluation of currency. 

 

Juan Guaido has lost credibility now. He and his friends along with American lawyers and lobbyists have helped themselves to hundreds of millions of dollars of the Venezuelan government funds in the US banks seized by the US government. The American attempts for regime change has completely failed. Their ruthless illegal economic sanctions have  worsened the suffering of Venezuelan people. The US government has even announced a bounty (ridiculous and outrageous even by American standards of arrogance and bullying) and on the head of President Maduro and those of other political leaders and military officials. But the Cubans have trained and helped the Venezuelans how to survive the Yankee sanctions and isolation and CIA conspiracy attempts. Some of the western governments have started resuming dealings with Maduro government and even the US sent an official delegation recently to Caracas for loosening of the oil embargo since the high oil prices have hurt US consumers. The Venezuelan economy has turned the corner. The hyperinflation has come down to manageable proportions. IMF has projected a 1.5% GDP growth in 2022, after consecutive GDP contractions from 2014 to 2021. 

 

So I believe that the worst is over. Venezuelans can expect improvement in their situation in the coming years. Of course, Venezuela needs a better government and that should be elected by the people themselves and not imposed by Gringos or their lackeys.



Tuesday, April 19, 2022

India’s exports to Latin America reached a record 17 billion dollars in 2021-22 but likely to show less growth in 2022-23.

 India’s exports to Latin America which reached a record high of 17 billion dollars in 2021-22 is likely to show only moderate growth in 2022-23. 
 
The April 2022 world economic outlook report of IMF says the Ukraine war and its impact on the world will bring down the GDP growth of South America to 2.3 % in 2022 from 7.2% in 2021.
Central America’s growth will be down to 4.8% from 11%.
Brazil’s GDP will decrease to 0.8% in 2022 from 4.6% in 2021
Mexico’s GDP will decline to 2% from 4.8%
Argentina(10.2%), Colombia(10.6%), Chile(11%) and Peru (13%) who had shown impressive double digit growth in 2021 will see 4%, 5.8%,1.5% and 3% respectively in 2022.
 
The only positive ( surprise !! ) increase in 2022 will be in the case of Venezuela which will see a 1.5% growth after GDP contraction of 1.5% in 2021. Venezuela had suffered consecutive GDP contraction from 2014 to 2021 with a cumulative total of 128.9% in the last 8 years. The contraction was a horrible 35% in 2019. It seems that the worst has passed and that Venezuela will only get better in the coming years with the rise in oil prices, the expected loosening of American sanctions, the stalemate in the political crisis, the loss of credibility of the pretender president Juan Guaido and the American realization of failure of their regime change operations.
 
Latin America had suffered a GDP contraction of 7% in 2020 due to the Covid crisis but had remarkably bounced back with a growth of 6.8% in 2021. The good news is that none of the 19 Latin American countries will suffer any GDP contraction in 2022. But the rise in global inflation and interest rates will impact Latin America adversely. This will be partly offset by the increase in commodity prices including crude oil will benefit the South American exporting countries.
 
Average inflation of Latin America will, for the first time in this decade, hit double digit at 11.2% in 2022. It was 9.8% in 2021. Of course, Venezuela will continue as the world champion of inflation with 500%, down from 1588% in 2021. The country has been suffering from hyperinflation since 2015 which reached an incredible peak of 65374% in 2018.
The other country which has chronical inflation in the last decade is Argentina whose inflation in 2021 was 48.4 %. It is projected to increase to 51.7% in 2022.
 
India’s GDP growth will decline marginally to 8.2% in 2022 from 8.9% in 2021 while the Chinese growth will be almost halved to 4.4% from 8.1%. The global GDP growth will be down to 3.6% in 2022 from 6.1% in 2021.
 
India’s exports to Latin America reached a record high of 17 billion dollars in the period April 2021 to February 2022, showing an annual increase of over 30 percent. The increase in exports in 2022-23 is likely to be modest, given the economic outlook of the region this year.
 
 

Sunday, April 17, 2022

La Libertadora del Libertador (the female Liberator of the Liberator)

Simon Bolivar is celebrated as the Liberator (Libertador) of South America. He was an exceptional military leader, strategist, visionary, scholar, adventurer and above all a typical Latino macho. After the early death of his wife, he had remained as a bachelor for the rest of his life. He had affairs with many women. When he met Manuela Saenz (Manuelita), a married Ecuadorian woman, he thought she was yet another score. But he underestimated her. Manuelita fell in love with him, left her husband and became Bolivar’s lover, mistress and confidante for the rest of her life. She adored him, looked after him and was fiercely loyal to him. She fought covertly and overtly against Bolivar’s adversaries in Colombia, Peru and Ecuador during her stay in those places after 1822. She subscribed to Bolivar’s ideals of Latin American independence and political vision. Manuelita and Bolivar had exchanged many letters when they were away from each other. 

Manuelita got herself an official position as a member of Bolivar's staff and had assumed the formal role of his personal archivist. She was part of Bolivar’s inner circle-a group that included both civilians and officers. She kept an eye on the friends and adversaries of Bolivar and kept him informed of their activities. She showed remarkable courage and ingenuity and saved the life of Bolivar on September 25, 1828, when assassins broke into the presidential palace in Bogota to kill the Liberator. Bolivar was fascinated by the unconventional, courageous, intellectual and playful personality of Manuelita. He called her sometimes as an “ amiable mad woman”.  He benefitted from her advice and was inspired by her sweet charm, sharp wit and adventurous rebelliousness. It is for these reasons that Manuelita is called as the “ La Libertadora del Libertador” (female Liberator of the Liberator). 

 

In the book “For Glory and Bolivar: The Remarkable Life of Manuela Saenz” the author Pamela S. Murray brings out the political and historical importance of Manuelita and portrays her as a Latin American feminist icon. Murray has done extensive academic research and has cited evidence from historical archives. 




 

Manuelita was an illegitimate daughter of an Ecuadorian businessman and had suffered the stigma and its consequences early in her life. After the death of her mother, she was sent to live at the convent of Santa Catalina. She remained there until age 17, when she was married to James Thorne, a wealthy British merchant. Thorne took her to Lima, where she first came into contact with the movement for independence in which she started taking active part.  That involvement almost certainly grated against her husband’s interests tied to the members of the city's social and business establishment. It also clashed sharply with the sentiments of her royalist father and older half-siblings. She returned to her birthplace, Quito, in June 1822 where she met Bolívar in a party celebrating his latest military triumph. She fell in love with him and stayed as his lover thereafter. 

 

Manuelita rose as a strong-willed and independent woman and had carved a place for herself in a man's world. She defied the conventions and traditions of the macho society of her era when women were prohibited from participating in government and the public sphere. 

 

Manuelita preferred the world of army camps and barracks and used to appear in public dressed in a military uniform. She rode horses and was accompanied by one or two of her black female servants  who were also in military uniform. She smoked and drank like a soldier and was fond of telling dirty jokes. 

 

After Bolivar’s death in 1830, the Colombian government harassed her. The government attorney accused her of "insulting the public" and "menacing" them with firearms as well as of "acting brusquely, in a way alien to her sex." Saenz also was deemed guilty of "dressing like a man" and of breaking "the rules of modesty and morality. She was expelled from Colombia. She went back to her native Ecuador but the Ecuadorian government also expelled her saying that she could cause public disturbance with her Bolivar loyalty. She then went and settled in Paita, a small port town in the north west of Peru, where she died in 1856.

 

Manuelita’s reputation as a feminist icon continues even now. Nela Martinez, an Ecuadorian author, activist and communist party member organized an event “Primer Encuentro con la Historia: Manuela Saenz” in 1989 bringing together some forty women from Ecuador, Peru, and Cuba. They met in Paita to honor Saenz's memory and visit her tomb. Martinez declared that Saenz's contributions to independence were on par with those of Bolivar and that she was a "coparticipant" in his continental project. She and other participants later signed a document known as the Declaration of Paita promising to take up Saenz's banner for women’s emancipation. 

 

During a protest against Ecuador's neoliberal policies, held on March 8, 1998 (International Women's Day), in Quito, the female protestors rode on horseback to the Plaza de Independencia, dressed like the Libertadora.

 

On May 25, 2007, the anniversary of the Battle of Pichincha, the Ecuadorian government symbolically promoted Manuela Saenz to the rank of General of the Army. 

 

The famous Chilean poet Pablo Neruda wrote a poem celebrating the Libertadora as a progressive symbol and an icon of revolution and independence. He called her as "the siren of rifles, the widow of nets, the tiny creole merchant of honey, doves, pineapples, and pistols who slept among the casks, familiar with the insurgent gun powder”.

 

In his well-known historical novel, El general en su laberinto (The General in His Labyrinth), Gabriel Garcia Marquez imagines Saenz almost in the mold of a modern guerrillera. He describes her as "the bold Quitena who smoked a sailor's pipe, used the verbena water favored by the military as her perfume, dressed in men's clothing, and spent time with soldiers, and whose husky voice still suited the penumbra of love.


There is also a delightful 2001 Venezuelan film  “Manuela Saenz, la libertadora del libertador”, which I recommend to the readers of this book. 

 

Saturday, April 16, 2022

India needs to step up engagement with Latin America and learn from the Chinese.

India has been talking about Lithium investment in Latin America and has been sending delegations to the region in the last several years but so far without any outcome. In contrast, China has already invested $4.5 billion in Lithiun production in the Lithium Triangle countries of Argentina, Bolivia, and Chile as well as Mexico.
 
India has given less than half a billion dollars of credit to Latin America. But China has given an impressive 137 billion dollars of credit to Latin American governments.
 
China’s trade with Latin America was $450 billion in 2021 and it is predicted that it could reach 700 billion by 2035. China is currently South America’s top trading partner and the second-largest for Latin America as a whole. India’s trade with Latin America in 2021 should be around 44 billion dollars. This could reach 100 billion by 2030.
 
China has signed FTAs with Chile, Peru and Costa Rica, and negotiating one with Panama. India has PTA with Chile and Mercosur. India needs to sign FTA/PTA with Mexico, Colombia and Peru.
 
China has invested 110 billion dollars in the region. India’s investment is around 10 billion. 
 
China is a voting member of the Inter-American Development Bank and the Caribbean Development Bank. Chinese companies get contracts through these membership. India should also become member of these regional banks.
 
Chinese banks and insurance companies have opened branches in Latin America and help the growth of Chinese firms operating in the region. No Indian bank has branch in the region.
 
India does not have embassies in Bolivia, Ecuador, Uruguay, Costa Rica, Honduras, El Salvador and  Nicaragua. China has embassies in all the countries except the few who recognize Taiwan. 
 
Every Chinese ambassador and diplomat posted in the region speaks Spanish or Portuguese, while very few Indian diplomats speak the local languages.
 
China has over 60 Latin America study centres but India has just four. Around 80 Chinese universities have Spanish language departments while less than six  Indian universities offer Spanish courses.

The Chinese hold annual meetings of Academic Forum and Think Tanks Forum besides several other forum meetings. India has not established such channels for exchanges.
 
China- Latin America Forum and China-Latin America Business Summit are held every year in large scale with systematic planning and activities. India-CELAC Forum and India-LAC Business summit are dormant. 
 
China has opened 39 Confucius Institutes in Latin America. There are more than 100,000 Latin American students enrolled in the Chinese language and culture programs of the Institute. India has 3 cultural centres in the region and very few Latin American students in India.

Chinese President, Prime Minister and Foreign ministers make regular visits to Latin America every year and hosts the visit of Latin American heads of states and governments. India has occasional visits. 

President Xi Jinping has visited the region eleven times since he took office in 2013. But the Indian Prime Minister has visited just twice.
 
 

Tuesday, April 05, 2022

Costa Rica elects a political outsider as President

Rodrigo Chaves Robles, a political outsider, won the Costa Rican Presidential election last Sunday (3 April) with 53% of the votes. He had lived almost half his life outside Costa Rica. He worked for 27 years at the World Bank. He returned to Costa Rica in 2019 after leaving the World Bank due to some sexual harassment complaints against him. He was appointed as Finance Minister in the outgoing government for seven months.

Chaves was born in 1961 in a large lower-middle-class family in the capital San Jose, and went on to earn a Ph.D. in Economics from Ohio State University in the United States.  Chaves is married to an economist from Latvia, his second wife.



 
Chaves beat Jose Maria Figueres who got 47% votes. Figueres was a formidable opponent. He is a former president ( 1994-98 ) and candidate of the National Liberation Party, the largest and oldest party of the country. Figueres’s father José Figueres Ferrer, was President of Costa Rica for three terms:1948–1949, 1953–1958 and 1970–1974.  He was a nation-defining figure who made history by abolishing the army in 1948. He also built the National Liberation Party
 
The election of a political outsider as President in Costa Rica is part of the recent trend seen in some other Latin American countries such as Chile, Peru and El Salvador. This is a wake-up call for the traditional and entrenched political parties in the region to reinvent themselves to become appealing to the new generation of demanding voters.
 
In any case, the election result would not have mattered much in the stable and mature democracy of Costa Rica. Both the candidates were moderates and civilized unlike the destructive extremists Trump and Bolsonaro. They did not promise to make any radical changes or change the direction of the country. There was no polarizing debate, hate speeches, vulgar language or ideological confrontation. The elections were peaceful and the result was accepted gracefully and promptly by the candidate who lost in contrast to Trump’s shenanigans and the ugly vandalization of the Capitol by the Trumpian thugs.
 
Costa Rica has remained as a strong and solid democracy in the last seventy years of Latin American history. This is mainly due to the visionary abolition of army. There have been no cocky colonels or brutal generals to shoot their way into presidential buildings. There are no far-right or far-left extremist parties or leaders in the country. There is broad political consensus among political parties and leaders on the major long term vision for the country.
 
It is even more impressive to see that Costa Rica has managed to flourish peacefully when Central America was burning with civil wars, gang wars and destabilization of the region by CIA. 
 
The country did not pursue just passive peace. It took initiatives to spread peace in the neighbourhood. Oscar Arias, the president of Costa Rica successfully mediated to stop the central american wars and get the presidents of the region to sign a peace agreementin 1987. Peace has endured since then. He was awarded the Nobel peace prize in 1987. He used the monetary award from the Nobel Peace prize to establish the Arias Foundation for Peace and Human Progress. In his Nobel Prize acceptance speech he said ¨ We are a people without arms and we are fighting to continue to be a people without hunger. Our children walk with books under their arms rather than guns on their shoulders. We are a symbol of peace for America.¨ Not a rhetoric. Preaching based on practice.
 
Costa Rica has established a University for Peace (UPEACE) in 1980 “to contribute to the great universal task of educating for peace by engaging in teaching, research, post-graduate training and dissemination of knowledge fundamental to the full development of the human person and societies through the interdisciplinary study of all matters related to peace”. At present, the UPEACE Costa Rica Campus has 170 students from 52 different countries, including India, making it one of the most diverse universities in the world for its size.
In 1869, the country became one of the first in the world to make education both free and obligatory, funded by the state’s share of the great coffee wealth. The literacy rate of Costa Rica is one of the highest in Latin America.
 
Costa Rica is a leader in sustainable development, clean energy and ecotourism. It was one of the first in the world which combined its ministries of energy and the environment back in the 1970s. The country generates an impressive 99 per cent of its energy from renewable sources
 
Of course, Costa Rica has its own share of challenges like poverty, inequality, corruption and growing crime. But the scale of these are insignificant to the rest of Latin America.  The President-elect Chaves attaches priority to create jobs, lower the cost of living and fight corruption.