Saturday, February 17, 2018

Maduro’s major challenges

The turbulence in Venezuela following the death of Hugo Chavez, Venezuela’s controversial leader and Latin America’s most charismatic leader since Fidel Castro, has been a cause of concern for Venezuelans everywhere. Many are fleeing their native country seeking a better life as a result of the situation there. Empty shelves, devoid of basic food items, toilet paper and other necessities reflect widespread social, political and economic woes in a country whose history is marked by revolutions and unrest.

Since the passing of Chavez, economic, social and political conditions have continued to spiral out of control. It is impossible to find basic food items and commodities on the supermarket shelves and these shortages have given rise to the rationing of these items. When someone goes to the supermarket there is a guard standing outside who will stamp your wrist so that you are unable to return to buy on the same day. For a country that is one of the world’s largest oil suppliers and a member of OPEC, it is hard to accept that this is happening.

Many of President Nicolas Maduro’s critics have said he does not have the political personality or charisma that Chavez had, that he is weak and does not have what it takes to fill those shoes despite being hand-picked by Chavez himself. In light of all this, what is Maduro doing to rescue his country from possible collapse? Or can he do the job?

In recent months there has been finger-pointing by both sides of the political divide regarding the economic hardships that are being faced by the Venezuelan people. Maduro has accused the opposition, the business community and the US of creating instability, claiming “sabotage”, while some critics both locally and abroad, insist the economic crisis is entirely of the government’s making.

They blame Venezuela’s financial woes on economic mismanagement, state expropriations, price controls and a convoluted currency system that forces much of the Venezuelan economy to rely on expensive black market US dollars costing up to nine times the official rate.

One way Maduro has responded to this crisis is by limiting the profits gained from the business community in order to halt soaring inflation. As an economic offensive measure designed to tighten the state’s grip on the private sector, he imposed strict limits on companies’ profits, a move clearly intended to cripple his opponents’ power.

The business sector on the other hand has accused Maduro of waging war against them as a result of the failed policies he inherited from his predecessor. Maduro believes that the restrictions will eventually lead to stablisation of the bolivar that has been facing seemingly insurmountable black market challenges.

What are the implications for us, the people of the region and T&T in particular? Issues such as the downscaling of PetroCaribe for countries of the region who are members of this regional alliance are of paramount importance for energy security for over a century in the region and for T&T which has always been a receiving country for many Venezuelans who have fled for political, social and economic reasons.

PetroCaribe members are Antigua and Barbuda, The Bahamas, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, St Lucia, St Kitts-Nevis, St Vincent and the Grenadines, Suriname and Venezuela. It is an agreement between all these countries and Venezuela which provides them with oil on favourable terms such as five to 50 per cent of the market price upfront; the remainder is then repaid over a 17-25-year period at one per cent interest.

Since the 2005 signing of the PetroCaribe agreement, the world has changed; several events have impacted on the economies in the region. Firstly, there was the global economic crisis starting in 2008, which resulted in the fall of energy prices. This has affected the plan to expand PetroCaribe into an economic union with goals going beyond oil diplomacy and involving a united region with the continuation of Chavez-style anti-American rhetoric.

The global financial crisis impacted severely on the Caribbean region as many of these Caricom member states depend heavily on tourism to sustain themselves.

With the decline of the tourism industry over the years, the smaller Caricom countries have been faced with the effects of the liberalisation of international trade on their leading “commodity”, tourism, and more recently the UK’s imposition of an air passenger duty which, in effect, constitutes an additional cost on travel to the islands, desperately trying to transform which are themselves into viable tourist destinations.

Energy dependence and vulnerability are of serious concern in the Caribbean, for both residents and tourist arrivals.

The solution that has been suggested by energy experts is to end the energy dependency and invest in renewable energy sources such as solar, wind, and hydro and geothermal power which is more sustainable and beneficial to the region. (Concludes on Monday)

• Julie Guyadeen has a BSc

degree in Government and has postgraduate training in

international relations