Colombia: Maduro Magical Mystery Tour

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September 12, 2017: The economic and political situation in Colombia continues to improve while next door in Venezuela just the opposite is happening. With the help of Cuban advisors and diehard, discredited, unelected and now outlaw Venezuelan socialist politicians the elected legislature was recently replaced by an unelected dictatorship that will do whatever is can to remain in power. The problem is that the Venezuelan leaders have ruined the economy and left most of the population literally starving. No one is willing or able to come forward and solve the economic mess. Cuba, Iran, Russia, China and Colombian drug cartels all see this as an opportunity and will do what they can to keep the new dictatorship in power. But none of these groups are interested in fixing the Venezuelan economy, where inflation continues to run far ahead of the average wage and now most of the population cannot afford to buy enough to eat. But the security forces and pro-government militias are well fed and taken care of. A growing number of criminal gangs are doing all right. That means the chaos will continue, probably for a long time because Venezuela has the largest oil reserves on the planet, even if the state owned oil company is crippled by corruption.

Venezuela’s neighbors have all condemned the new dictatorship but cannot agree on what to do about it. Everyone in the region is concerned about the increasing lawlessness in Venezuela and how the place has become a sanctuary for drug gangs, Islamic terrorists and all sorts of outlaw activity. This is most visible to the outside world in southern Venezuela where Brazil has to deal with a growing number of Venezuelan gangs that are growing stronger and wealthier because of illegal gold mining and smuggling. In western Venezuela a similar situation spills over into Colombia. Adding to the border control problem is that fact that most of the people coming out of Venezuela are simply seeking to escape the hunger, unemployment and violence that have become the norm there. It’s easy to tell who the Venezuelans are, they are the skinny ones who look like they have not been eating regularly for some time.

Because of this bad image the Venezuelan government is increasing its efforts to prevent opposition leaders and former government officials (especially those involved with fighting corruption) from leaving the country. For the government the problem is that these people know too much about illegal acts by senior government officials (especially members of the Maduro family). The dangerous information includes details of individuals, dates and specific actions that would enable a foreign court to prosecute a guilty Venezuelan politician or, worse, one of the foreign officials the Venezuelan did business with to steal money (often from the Venezuelan government or government owned company).

How It Was Done

Prosperity and democracy died in Venezuela because of nearly two decades of corruption and inept government created by the radical populist president Hugo Chavez. This former soldier got elected in 1999 and died of cancer in March 2013. Along the way Chavez trashed the Venezuelan economy and democracy. His handpicked replacement, Nicolas Maduro, was even worse. The old Chavez dream of Venezuela becoming a socialist dictatorship supported by oil revenue eventually faded along with cash reserves and the national credit rating. Venezuela currently owes over $100 billion for foreign lenders, mainly in China and Russia. Maduro has put priority on making scheduled payments on that secured foreign debt because if they don’t the credit rating is damaged while China and Russia become less helpful.

While most Venezuelans want reconstruction (under a non-socialist government) rather than civil war the leftists still in the government chose to risk all and stay in power, even though that was certain to mean more chaos and suffering. President Maduro first tried to stay in power by manipulating the law and use a Supreme Court filled with recent pro-government appointees to try and outlaw democracy and grant him dictatorial power. This was opposed by most Venezuelans and in response Maduro staged a coup by forcing a July 30 vote (rigged by the government) to select 545 Maduro supporters for a Constituent Assembly that will “legally” revise the constitution and make Maduro a legal dictator. The armed forces leaders openly backed Maduro on this and it was made clear that no compromise was possible. The opposition organized a national vote of their own on July 18th and an overwhelming number of voters opposed the Maduro plans but since Maduro controls the security forces (he selected the current military and police generals for their loyalty and willingness to be bought and stay bought) massive peaceful demonstrations had no effect. Now opposition leaders are being hunted and prevented from leaving the country.

What Maduro has done is clearly illegal but he feels the need to change the current constitution to survive. According to the original constitution only the parliament (an anti-Maduro national assembly) can perform a lot of key functions. But the Supreme Court ruled that the current parliament was illegal. The parliament describes these actions as a coup and most Venezuelans agree. Unlike most other democracy constitutions Venezuela does not allow the legislature to impeach (remove) the president. Rather the Supreme Court, whose members are appointed by the president (and approved by the legislature) do so. But before Maduro’s party lost control of the legislature in the 2015 elections he appointed enough loyal new judges to the Supreme Court to block any efforts to remove him from power. The legislature and the government were not able to agree on a compromise solution for any of this and Venezuelans were spending most of their time coping with continued economic collapse.

Now Venezuelans must either submit to a Maduro dictatorship, support a civil war or flee the country. It is unclear how many Venezuelans would fight and Maduro and his followers are betting on being able to suppress whatever armed opposition develops. The increased visibility of Cuban political, police and military advisors indicates that any armed opposition will be expertly and ruthlessly dealt with. Iran is offering similar assistance as well as help hiding the massive fortunes the Chavez and Maduro families have acquired. Actually, dozens of families that form the core of support for the government have gotten rich from the decade of plundering the oil-rich country and are concerned about holding onto those fortunes. For Maduro suppressing popular opposition is the easy part, hanging onto to the stolen assets is proving more difficult as American and international sanctions go after the stolen cash. It’s not like this situation is new and unique.

Because of situations like Colombia and Venezuela the United States is changing its approach to dealing with drug gangs in Latin America because it has found that the best approach is to go after the money and key personnel rather than the drugs or other illegal activities (like smuggling people) that generate the cash. As long as a nation is corrupt and lawless enough the head of a criminal organization survives by continually reorganizing and switching to new ways of generating cash because of changing conditions. Thus in Colombia it is common for many members of disbanded drug gangs or political militias (like FARC) will soon show up in new criminal organizations that are using another “business model” to get rich, or at least make a living.

Especially in Latin America major criminal enterprises often do business with all manner of illegal groups, including Islamic terrorists, if that will keep them in business. Because of this South America is a region where Iran has established a long-term presence via links to major criminal organizations. The prevalence of corruption and inefficient economies in the area makes working for a successful criminal organization attractive to many capable people. Colombia has been more successful at dealing with this problem than neighboring Venezuela which has been the place to go if you are a wealthy gangster seeking a national government that you can do business with. At the moment Colombia is becoming less a problem in this respect and Venezuela is taking over as the most outlaw-friendly area in the region.

Venezuelan Arithmetic

A more difficult problem in Venezuela is the economic wreckage the Chavez/Maduro government created. Venezuela has not got enough cash to support a police state as well as feeding the population. Because of the 2017 coup Maduro is facing economic sanctions by the United States (the largest customer for Venezuelan oil and largest supplier of all sorts of essentials) and most other nations in the Americas and the industrialized world. Sanctions include bans on obtaining equipment and technology for reviving the Venezuelan oil industry. But at the moment Maduro does not have the cash to pay for that and credit is all used up as well. The UN and all of the neighbors condemn Maduro but the international community is unwilling to do much more than that. Some South American nations have expressed a willingness to join in on sanctions. In part that is because it is no secret that millions of sick and hungry Venezuelans are preparing to flee to neighboring countries, mainly Colombia and Brazil. Many will find they cannot get to and across the border because of health or financial problems, but this demonstrates how desperate the situation has become.

Despite diverting most food and other consumer goods towards the security forces that did not prevent a growing number of soldiers and policemen from complaining that their families were going hungry, often because one soldier or policemen was under pressure to help get food for his extended family and was unable to do so. Commanders are seeking solutions to this growing problem but there is no easy fix. What many commanders do is informally tolerate their subordinates stealing from any Venezuelans that can be seen as Maduro opponents. This now includes most Venezuelans so there are plenty of potential victims. Commanders who are caught doing this often get away with it by explaining it is an effective way to reduce open opposition to the Maduro government. The new leadership of the security forces was selected mainly for loyalty not competence in military of police work.

The Cuban advisors have solutions for all these problems and it includes a violent and bloody imposition of universal social control. In Cuba this led to thousands of deaths and the continued use of prisons full of people considered politically unreliable. Cuba would, like most dictatorships, tolerate organized crime if the gangsters followed orders and helped keep the government in power and the people under control. Maduro is already doing that but some of his popular militias have turned against him because the food distribution system is now controlled by the military and many officers do not regard the popular militia as loyal or deserving of scarce food supplies.

In the five months since it became clear what Maduro had planned there were nearly 400 demonstrations a week. Over 200 people died and at least 10,000 were arrested and at least a third of them are still imprisoned. Now it gets worse. Since the July 30 “vote” the number of Venezuelans fleeing the country has reached over 20,000 a day. Most head for Colombia, which is scrambling to cope with the surge of refugees. Over a million Venezuelans have already fled, most in the last few years and most of these people with skills and some money. The next few million Venezuelan refugees won’t be so welcome because they will be those who could not afford to get out earlier and are now driven by hunger and fear of the new police state. Many Colombians on the border are optimistic mainly because they are familiar with Venezuelans, often because some kin are over there. A shared language and culture make it easier, at least in the border areas, to absorb the influx. But the number expected is larger than Colombia has ever had to deal with, especially in a short period of time. Cuban advisors point out that this rids the new dictatorship of potential opponents and reduces the number of people to be controlled. The Cuban advisors are less public about the problem of dealing with long land borders in rural areas of the country that have always been porous. Dictators prefer short, well-guarded borders or, preferably, no land borders at all as in Cuba.

For Maduro the payoff is all that oil and the fact that China and Russia have loaned him so much money that it is in their interest to provide the tech and technicians to get the Venezuelan oil facilities going again. China and Russia will do that, for a price and Maduro has travelled overseas recently to negotiate the best deal he can. Iran and Cuba also provide special skills and are also negotiating their fee. That’s how a dictatorship works. You steal what you can and pay what you must. Since 2013 Venezuelan GDP has dropped 35 percent and per-capita GDP is down 40 percent. Things will get worse before they get better even with a police state. That’s because the new government must put priority on keeping the government employees, especially the ones with guns, satisfied and content to follow orders. You don’t need a Cuban advisor to point that out but the Cubans provide practical advice on how to get it done as quickly as possible.

Maduro has a bigger problem because most Venezuelans, especially most of those who supported Chavez, oppose this attempt at forming what amounts to a military dictatorship. Part of the problem that the opposition includes a lot of lawyers and members (until recently) of the Maduro government. The lawyers and senior officials who oppose Maduro (openly or not) have assisted in getting a lot of documentary evidence (of the corruption and illegal behavior of Maduro and his supporters) out of the country. This evidence is going to be used to indict Maduro for all sorts of crimes and justify all manner of sanctions. Maduro must be able to sell his oil and do business internationally to survive. Maduro needs a minimum number of loyal (out of fear or greed) supporters to form and operate a police state. Despite support from Cuba, Iran, China and Russia, it is not a sure thing.

September 11, 2017: President Maduro is travelling to overseas allies seeking help and coming up empty. The only help Maduro is being offered involves illegal activities. Iran, for example, has the largest Iranian embassy in the world that is mainly because Iran conducts a lot of illegal activities there and provides the Maduro government with cash and other favors in return. None of this is fit for a press release and, officially, the Maduro road trip has been unsuccessful.

September 9, 2017: In Venezuela the government said it was going to stop using the dollar and instead switch to a basket of other currencies including the Chinese yuan, euro, Russian ruble and Japanese yen. This won’t change the fundamental fact that Venezuela is broke and getting broker by the day. There are $3.8 billion in debt payments due by the end of November and the government only has about $10 billion in foreign cash available. The government is also going to try and negotiate new terms for some of this debt.

September 8, 2017: Venezuela has imposed new price controls which have not solved the problem with high prices on the black market.

September 7, 2017: In Colombia FARC leaders met and agreed to keep the acronym “FARC” but with a slight change to what FARC means. Originally the “A” in FARC stood for “armed” but now that has been replaced by “alternative”. This “Fuerza Alternativa Revolucionaria del Comun” now means Revolutionary Alternative Common Force. The new FARC gets ten guaranteed seats in the legislature until 2026 but after all seats must be gained via elections. Meanwhile the first national elections FARC faces (to get more than ten seats) is in 2018. Yet FARC leaders already know that their leftist political platform will be a hard sell. Even though many veteran FARC members still believe Colombia would be better off with a more socialist government, just not one next door in Venezuela. Opinion polls show the voters are wary of trusting FARC. Even though the populist message FARC presents has been successful (at least in the short term) elsewhere (especially in South America) most Colombians still regard FARC as a bunch of gangsters who long ago abandoned their leftist ideals and embraced the drug business and other moneymaking enterprises. Litigation over assets (especially land) that FARC stole over half a century of operations will go on for more than a decade and some bad memories of FARC will take a generation or more to fade. Moreover the socialist experiment next door in Venezuela isn’t over yet and if that remains in the news it will not gain FARC any votes. All this was made worse by recent (mandated by the peace deal) revelations of FARC wealth (over $300 million) that FARC might be allowed to keep. The government has already seized over half a billion dollars’ worth of FARC assets that are clearly not legal (weapons and assets that owners have already reported stolen). The government believes over half the assets FARC says it can keep are also stolen property or otherwise illegal.

September 5, 2017: One of the largest drug gangs in Colombia, the Gulf Clan, has proposed that the organization disband under government supervision in return for an amnesty deal similar to what was offered to FARC, ELN and anti-leftist militias. This development was not unexpected. One reason the ELN recently agreed to negotiate a peace deal was that the security forces, as promised, had turned most of their attention to ELN as the FARC peace negotiations (and a series of ceasefires) went on. The drug gangs had responded to a similar threat aimed at them by, when possible, moving operations out of the country. But most of the Colombian drug gangs still have people and operations in Colombia that cannot be moved. The Gulf Clan was the first major drug gang to get a lot of attention from the security forces and in the last few months over 1,500 Gulf Clan members have been arrested or surrendered. Recently several senior leaders have been captured, killed or forced to flee the country. The increased pressure on the Gulf Clan, and the drug gangs in general, began in 2015 because the leftist rebels were getting weaker and the security forces, especially the special operations and intelligence branches, were still growing and gaining more experience. The Gulf Clan leaders were the first to realize that future prospects were bleak and not likely to improve. Not all drug gang leaders are convinced and some are accepting permanent exile and setting up shop elsewhere in the region with Ecuador, Peru and Venezuela being current favorites.

September 4, 2017: After nearly seven months of negotiations in Peru the government and ELN agreed to a joint ceasefire and general terms for a peace deal similar to the one FARC got. The ceasefire begins October 1st and ends January 12th 2018. It will be monitored by UN and Catholic Church officials. The ceasefire can be renewed if both sides agree. ELN, the second largest leftist rebel group (a third the size of FARC) was wary of what FARC was doing but was willing to consider a peace deal. The first step in these negotiations was agreeing on some kind of ceasefire. In August ELN offered to declare a unilateral ceasefire, for 90 days, to accommodate the coming visit by the pope (the first pope from South America). That led to the current bilateral ceasefire agreement. ELN is smaller because its members are more into the goal of a communist dictatorship for Colombia. But Colombians have noted what happened when that was tried in Venezuela and, as a result, ELN has lost most of the popular support it once had. ELN has become a coalition of leftist gangsters, some of them more into it for the money than the politics. The ELN understands that if it does not make peace the security forces will probably hunt down and kill or capture most of them. One thing ELN has going for it is that they never became dependent on the drug gangs for cash. Instead ELN used kidnapping (especially of foreigners) and extortion (mainly of large companies, especially foreign ones.)

September 1, 2017: An ELN leader admitted that an incident last April involving a Russian the group had captured was not reported accurately and that the Russian was killed while trying to escape. This took place in the northwest (Choco province) where a local ELN group reported that a Russian poacher they had been holding for ransom since last November had escaped. The Russian had escaped but was immediately pursued and shot dead. Back then the ELN had been negotiating with the Russian embassy for the release of the poacher (who was caught in the jungle seeking a rare frog to smuggle out of the country and sell on the black market). What actually happened was that the Russian grabbed a grenade and used it against the ELN gunmen escorting him. Five of the ELN men were wounded but others were able to fire on the hostage as he fled. The Russian prisoner soon died and the local ELN leader initially reported that the prisoner got away. Nothing had been heard about the poacher (Voskanya Arcen Levoni) and ELN implied that the man did not want to be turned over to the Russian embassy. Now the ELN is offering to negotiate the return of the body of the Russian.

August 28, 2017: In the east (Arauca province) ELN blew up a section of a major pipeline near the Venezuelan border. It will take a few days to repair the damage but in the meantime this 780 kilometer long Cano Limon pipeline, the second largest in Colombia, cannot move the 220,000 barrels of oil a day it usually handles. This is the 33nd ELN attack on oil industry operations this year and the Cano Limon is a favorite target. In fact these ELN attacks have kept the Cano Limon out of service about 30 percent of the time. Often the pipeline attacks in remote areas result in lots of oil spilling into local waterways. In 17 years of ELN attacks on oil facilities 167 people have died and over 1.5 million barrels of oil have been lost, often ending up in local rivers. ELN and the government began peace talks in February and the ELN increased its attacks since then until the September ceasefire agreement.

August 25, 2017: The United States imposed another (number 4) round of economic sanctions on Venezuela. This was in response to the Venezuelan government ignoring the constitution and establishing a government controlled assembly to go through the motions of developing and approving a new constitution that makes current president Nicolas Maduro a legal (according to Maduro and his allies) dictator or Venezuela.

August 18, 2017: Luisa Ortega, the former Attorney General (Chief Prosecutor) of Venezuela and her husband escaped to Colombia, reaching Bogota in a small aircraft. Ortega had been illegally removed from office in June and banned from leaving the country. Ortega says this was not just because she criticized government efforts to establish a dictatorship but also because she was gathering evidence on large scale (over a $100 million worth) corruption that mainly benefitted the Maduro family. In late June the Venezuelan Supreme Court approved efforts to remove Luisa Ortega as Attorney General for criticizing the effort to change the constitution with an illegal process backed by the Supreme Court. According to the current constitution only the parliament (national assembly) can remove an attorney general from office. But the Supreme Court has ruled that the current parliament is illegal. The parliament describes these actions as a coup and most Venezuelans agree with that. Unlike most other democracy constitutions Venezuela does not allow the legislature to impeach (remove) the president. Rather the Supreme Court, whose members are appointed by the president (and approved by the legislature) do so. But before Maduro’s party lost control of the legislature in the 2015 elections he appointed enough loyal (to Maduro) new judges to the Supreme Court to block any efforts to remove him from power. The legislature and the government have not been able to agree on a compromise solution for this problem.

 


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