Arrow Down Arrow Left Arrow Right Arrow Up Camera icon set icon set Ellipsis icon set Facebook Favorite Globe Hamburger List Mail Map Marker Map Microphone Minus PDF Play Print RSS Search Share Trash Twitter Video Camera Youtube
A demonstrator carries a Venezuelan flag as he runs next to a list of the victims of the violence during protests against Venezuela's president Nicolas Maduro government in Caracas, Venezuela, June 12, 2017. REUTERS/Ivan Alvarado

Power without the People: Averting Venezuela’s Breakdown

Violence is escalating in Venezuela, killing 70 people in over two months of ever-angrier popular protests against a government that is abandoning representative democracy. Regional states should avert a humanitarian catastrophe by pressuring the Maduro regime to withdraw plans to elect a phony constituent assembly on 30 July.

  • Share
  • Save
  • Print
  • Download PDF Full Report

I. Overview

Venezuela is in turmoil after more than two months of almost daily mass demonstrations organised across the country by the opposition Democratic Unity (MUD) alliance. Almost 70 people have been killed; human rights groups ascribe at least a third of these deaths to excessive force by National Police (PNB) and National Guard (GNB) riot squads, sometimes accompanied by groups of gunmen on motorcycles (so-called colectivos). Thousands have been arrested – some in violent raids on residential properties carried out without warrants – and hundreds arraigned before military tribunals, in violation of the constitution. Systematic looting in several cities adds to the misery of daily life in a country suffering from chronic shortages of food, medicines and other basic goods. Armed thugs, either affiliated with or tolerated by the government, hold de facto authority in many areas.

Venezuela has ceased to be a democracy.

Venezuela has ceased to be a democracy. President Hugo Chávez and his successor Nicolás Maduro have systematically eroded constitutional checks and balances over nearly two decades. The government has suspended democratic elections and stripped the opposition-led National Assembly of virtually all its powers. It intends to rewrite the 1999 constitution, electing a 545-member constituent assembly next month under a specially designed system that almost guarantees a loyalist majority, despite the government’s low poll ratings. The assembly will be empowered to write a new constitution that sweeps aside existing institutions and installs a “communal state”. Government spokesmen have threatened to close the National Assembly, eliminating legislators’ parliamentary immunity and “turn upside down” the prosecution service (fiscalía general) whose head – the former loyalist Luisa Ortega Díaz – now publicly opposes the president.

Venezuela’s descent toward violent anarchy threatens not only its 31 million inhabitants but also the wider region, whose leaders are unable to agree on how to help their neighbour restore democracy, the rule of law and stability. A negotiated resolution remains the best hope for avoiding even greater bloodshed, but not by returning to the futile, time-c0nsuming “dialogue” of 2016. Negotiations should be rigorously structured, with an agreed timetable and agenda, and mediated by external actors able to act as guarantors. The active engagement of the Organization of American States (OAS) will be essential.

Negotiations should be rigorously structured [...] and mediated by external actors able to act as guarantors. The active engagement of the Organization of American States (OAS) will be essential.

Since the present government has rejected such negotiations, however, there is little hope for progress without the emergence of significant fractures between pragmatists and hardliners within both the military and civilian leaderships. Carrots as well as sticks are needed. Chief among the former is a credible plan to restore peaceful democracy that offers guarantees to both sides, including a transitional justice scheme. But first the government must abandon its project for a constituent assembly, which would only intensify the conflict and make a solution even more difficult.

II. What Provoked the Latest Protests?

At the beginning of 2017, the Maduro government was in a buoyant mood. It no longer faced the threat of early presidential elections, having used its institutional stranglehold to block a presidential recall referendum in 2016.[fn]Under the terms of Article 233 of the constitution, the president’s removal during the last two years of his six-year term does not lead to fresh elections. Instead, the vice president (an appointed figure) completes the term. January 2017 marked the beginning of the last two years. For more details on the recall referendum process, see Crisis Group Latin America Report N°59, Venezuela: Tough Talking, 16 December 2016.Hide Footnote The appointment of Aragua state Governor Tareck el Aissami as vice president reinforced the hardliners.[fn]Maduro appointed Aissami vice president on 4 January and within days also named him head of a new, military/civilian “anti-coup command”, which immediately began making arrests. On 13 February the U.S. Treasury Department designated Aissami a “prominent drug-trafficker”, freezing any assets he might have in the U.S. and prohibiting U.S. citizens from doing business with him. “Treasury Sanctions Prominent Venezuelan Drug-Trafficker Tareck el Aissami and his Primary Frontman Samark López Bello”, Treasury Department press release, 13 February 2017.Hide Footnote The MUD was in disarray, internally divided and seemingly unsure where to go next. An abortive dialogue facilitated by the Vatican, which began in late October, fell apart in December, having succeeded only in demobilising street protests and undermining the credibility of opposition leaders.[fn]The dialogue also was facilitated by former Spanish Prime Minister José Luis Rodríguez Zapatero and two Latin American ex-presidents, as well as the Union of South American Nations (UNASUR) Secretary General Ernesto Samper.Hide Footnote The MUD reorganised, dismissing its secretary general, Jesús “Chuo” Torrealba, and adopting a cumbersome system of coordinating bodies seemingly designed to paper over the splits among member parties.[fn]“Nueva estructura de la Unidad Democrática inició formalmente sus funciones”, Mesa de la Unidad Democrática, 23 February 2017.Hide Footnote

Then in late March, the Supreme Court (TSJ) issued two resolutions that would trigger new conflict, uniting and reinvigorating the opposition. Most controversially, Resolution 156 transferred legislative powers of the National Assembly to the court, a move the MUD condemned as a coup d’état. The resolutions also accused MPs of treason, virtually eliminated their parliamentary immunity and threatened them with trial by military tribunals. On 31 March, Attorney General Luisa Ortega, previously considered a hardline government loyalist, declared that these decisions marked a “breakdown of constitutional order”.[fn]Ortega’s comments came at the end of a presentation carried live on state television. “Luisa Ortega Díaz ruptura del hilo constitucional en Venezuela”, YouTube video, 31 March 2017.Hide Footnote To limit the damage, the government convened the National Defence Council, chaired by Vice President Aissami, which “exhorted” the Supreme Court to reconsider the resolutions – an order the judges promptly obeyed by partially rescinding them.[fn]The u-turn by the court itself was deemed unconstitutional by many independent legal experts. See José Ignacio Hernández, “Sobre el inconstitucional exhorto del Consejo de Defensa Nacional al TSJ”, Prodavinci.com, 1 April 2017.Hide Footnote

The next day, opposition legislators called the first in a series of demonstrations to demand early general elections and dismissal of justices responsible for the rulings. The OAS Permanent Council, which only days earlier had held an inconclusive meeting on Venezuela, reconvened on 3 April and passed a resolution declaring the court rulings “incompatible with democratic practice” and a “violation of constitutional order”.[fn]In mid-May, the U.S. announced targeted sanctions against Supreme Court President Maikel Moreno and the seven members of the court’s constitutional branch for their role in issuing the resolutions. “Venezuela Supreme Court judges hit with U.S. sanctions”, Reuters, 18 May 2017.Hide Footnote The resolution invoked both the OAS charter and the Inter-American Democratic charter, which includes provisions for dealing with the breakdown of constitutional rule in a member state. It also called for a consultative meeting of OAS foreign ministers. In protest, Venezuela announced it would leave the organisation.[fn]The formal letter announcing withdrawal was handed to Secretary General Luis Almagro on 28 April. The process, however, takes two years to complete. Mariano de Alba, “Venezuela y su posible retiro de la OEA”, Prodavinci.com, 26 April 2017.Hide Footnote

Though the partial reversal of the Supreme Court resolutions seemed to indicate a climb-down, the Maduro government soon made clear that it was ready to pour more fuel on the fire. On 7 April, the comptroller general announced that it was banning Henrique Capriles, a key opposition leader, from holding elected office for fifteen years.[fn]Capriles, the MUD’s presidential candidate in 2012 and 2013, is governor of the state of Miranda, which includes a large part of the capital, Caracas. He belongs to the Primero Justicia party. A month later a similar ban was imposed on one of the other two opposition state governors, Liborio Guarulla of Amazonas.Hide Footnote The MUD announced that street demonstrations would continue until the government backed down. A pattern emerged of at least three major rallies or marches a week, which were then blocked, dispersed and violently attacked by police and National Guard riot squads, backed in Caracas by armoured vehicles and water-cannon. On average, one person – a demonstrator, a passer-by or a member of the security forces – was killed every day. On 1 May, Maduro announced his plans for a constituent assembly, saying this was the only way to restore “peace”. The opposition dismissed the proposal as a fraud to provide quasi-legal justification for dictatorship.

III. Goodbye to Representative Democracy

Like his predecessor, Hugo Chávez, Maduro came to power through an election, though he won the presidency in April 2013 by only a narrow margin and despite legal challenges.The g[fn]For an account of the 2013 election and the alleged irregularities cited by MUD, see Crisis Group Latin America Report N°28, Venezuela: A House Divided, 16 May 2013.Hide Footnote overnment’s willingness to again face the electorate evaporated after the December 2015 legislative elections, however, when the MUD obtained two thirds of the 167 parliamentary seats.[fn]See Crisis Group Latin America Briefing No°35, The End of Hegemony: What Next for Venezuela?, 21 December 2015.Hide Footnote Since then, it has manoeuvred to avoid elections, evade its commitments under international treaties, and finally change the constitution in order to abolish representative democracy altogether.

A. Avoiding the Electorate

Using the nominally autonomous Supreme Court, Maduro had all laws passed by the opposition-controlled assembly in 2016 declared either unconstitutional or financially unviable. The court’s constitutional bench then removed parliament’s other powers, including oversight of the executive branch and budgetary authority, accusing the assembly of contempt for attempting to seat members from Amazonas charged with vote-buying.[fn]These allegations have never been aired in court, and there has been no move to hold fresh elections, leaving the voters of Amazonas without parliamentary representation. Julett Pineda Sleinan, “Diputados de Amazonas solicitan sentencia definitiva a Sala Electoral del TSJ”, Efecto Cocuyo (efectococuyo.com), 2 August 2016. The court is divided into salas or benches, such as criminal, electoral and constitutional. The latter has become the de facto court of last appeal.Hide Footnote The president has ruled by decree under a state of emergency first imposed in January 2016, and renewed (to date) seven times.[fn]States of emergency lasting up to 90 days can be declared under the terms of Articles 337-339 of the constitution, but must be approved by the National Assembly. They can be renewed just once, for the same length of time.Hide Footnote When the MUD responded by seeking a presidential recall referendum, under Article 72 of the constitution, Maduro used his control of the electoral authority (CNE) to delay and ultimately block the effort.[fn]All elected officials in Venezuela are subject to a mid-term recall referendum if requested by 20 per cent of the electorate. For details of how the referendum against Maduro was blocked, see Crisis Group Report N°59, Venezuela: Tough Talking,op. cit.Hide Footnote

Elections for state governors, originally scheduled for December 2016, were put on hold. Excuses included lack of funds, controversy over the recall referendum and the court’s decision to launch a complicated, months-long process to “revalidate” political parties, which appears designed to eliminate many of them.[fn]In 2016 the Court ordered that all political parties that had not obtained the votes of at least 1 per cent of the electorate in the 2015 legislative elections should re-register with the electoral authority, a process that involves obtaining the signatures of at least 3 per cent of the electorate in at least twelve states. Initially, 59 parties were affected (though not the opposition Democratic Unity umbrella group nor the ruling United Socialist Party of Venezuela). The opposition complained that the logistics imposed by the CNE made it almost impossible for most parties to comply with the conditions. Alessandro di Stasio, “Claves para conocer el proceso de renovación de partidos políticos anunciado por el CNE”, Efecto Cocuyo (efectococuyo.com), 8 February 2017.Hide Footnote On 24 May, the electoral authority announced that the delayed elections would take place on 10 December. However, it also announced elections for a constituent assembly (ANC) on 30 July.[fn]In contrast to the recall referendum petition of 2016, which the CNE took around eight months to process and was eventually denied, Maduro’s ANC petition was granted immediately. After taking 48 days in 2016 to produce the forms for gathering signatures, the CNE produced the equivalent forms in 48 hours, and every other aspect of the process was similarly expedited. Eugenio Martínez, “CNE acelera todos los procesos para cumplir con exigencias de Maduro”, Diario de las Américas, 30 May 2017.Hide Footnote Once elected, the assembly will have authority to cancel any other elections, or even eliminate state governorships altogether.

B. Venezuela’s Divorce from the OAS

Hugo Chávez, who regarded representative democracy as a tool for political control by elites, chafed at the human rights provisions of the Inter-American system, as embodied in the OAS charter and the Inter-American Democratic charter.[fn]Chávez claimed to adhere to “participatory democracy”. See Margarita López-Maya, “Democracia Participativa en Venezuela (1999-2010): orígenes, leyes, percepciones y desafíos”, Centro Gumilla, 2011.Hide Footnote Although Chávez signed the charter (which, ironically, was first invoked in response to a coup that briefly ousted him in April 2002), he made clear his reservations. He was equally dismissive of the Inter-American Human Rights commission and the Inter-American Court of Human Rights, whose rulings the Venezuelan Supreme Court either ignored or ruled inapplicable. Chávez denied the commission access to Venezuela, arguing that its criticisms were part of a U.S.-inspired campaign against his government. In September 2013, Venezuela renounced the American Convention on Human Rights.[fn]The decision, which took effect a year later, means no further cases relating to Venezuela can be brought before the Inter-American Human Rights Court. José Ignacio Hernández, “Venezuela se sale de la CIDH. ¿Y ahora?”, Prodavinci (Prodavinci.com), 10 September 2013.Hide Footnote

This process of withdrawal from the Inter-American system reached its logical conclusion with the Maduro government’s decision to renounce its OAS membership. The unprecedented move leaves Venezuela isolated from the regional body’s other 34 members, along with Cuba, which was suspended from 1962-2009 and has refused to rejoin. Other close allies of the Maduro government, such as Bolivia and Nicaragua, have shown no inclination to follow Venezuela’s example.

C. The National Constituent Assembly

The government’s decision to convene a constituent assembly or ANC epitomised its rejection of internationally accepted democratic norms. President Maduro says his aim is to promote dialogue and restore peace. Declarations by other leading proponents suggest a different intention, however. Former Attorney General Isaías Rodríguez, a member of the presidential commission charged with promoting the assembly, has spoken of using it to “annihilate” the political right.[fn]“Isaías Rodríguez llama a ‘aniquilar la derecha’ con la nueva constitución, Agencia Efe, 3 June 2017. Rodríguez vowed that the government would, “sweep aside, finish off, definitively annihilate” what he called “the right”.Hide Footnote Diosdado Cabello, vice president of the ruling United Socialist Party of Venezuela, said the ANC would close down the National Assembly and eliminate current legislators’ parliamentary immunity, while another member of the presidential commission, constitutional lawyer Hermann Escarrá, said it would even assume criminal justice functions.

Although Article 348 of the constitution states that the president is among those who can trigger the drafting of a new constitution, Articles 347 clearly states that only “the people” can convene a constituent assembly. Most scholars argue that this requires a prior referendum, but the government has refused to hold one.[fn]José I. Hernández, “Sobre el extraño caso de la firma del decreto de la ‘constituyente ciudadana’”, Prodavinci (Prodavinci.com), 3 May 2017.Hide Footnote  It is also unclear whether the electorate will get to approve any resulting constitutional text. Under pressure from both the opposition and dissident chavistas, the government modified ANC regulations to include a referendum. However, the final decision will rest with the constituent assembly itself.[fn]Among the many voices rejecting the ANC proposal is that of the Catholic Church, which has declared it both unnecessary and inappropriate. “Palabras de Mons. Diego Padrón Sánchez al Presidente de la Comisión Organizadora de la Asamblea Nacional Constituyente”, 21 May 2005.Hide Footnote

Even more serious are problems with how the ANC will be elected. The method proposed by the government (and accepted by the Supreme Court and electoral authority) is skewed against heavily populated urban areas where the opposition is strongest.[fn]The government changed regulations used to elect the 1999 Constituent Assembly, probably because they would likely produce an opposition majority. Around two thirds of respondents in recent polls do not think a constituent assembly is a priority, and more than 80 per cent would like Maduro to leave office this year. “7 de cada 10 venezolanos opinan que viven en dictadura, apoyan las protestas y quieren que Maduro se vaya”, El-Informe.com, 22 May 2017.Hide Footnote Each of the country’s 335 municipalities will elect one assembly member, regardless of population size. Municipalities that are also state capitals will elect two. This means, for example, that the city of Maracaibo (capital of Zulia state), with almost a million voters, will elect two members, while the state of Táchira with 29 municipalities but only 826,000 voters, will elect 30. Tiny towns in remote Amazonas state will have the same weight as municipalities in metropolitan Caracas with hundreds of thousands of voters. The system would also make it almost impossible for the opposition to take both seats in state capitals, giving the government a virtually guaranteed 50 per cent of these (ie 23 seats).

The rules also provide for 173 assembly members to be elected by eight arbitrarily chosen “sectors”: students, peasants and fishermen, business owners, the disabled, pensioners, workers, indigenous people, members of communal councils and members of communes. There are no published electoral registers for these sectors; only the government has access to relevant databases. Some – particularly the communes and communal councils – are vulnerable to manipulation by the state.[fn]The government created communal councils in 2006 as grassroots citizens’ organisations politically and economically dependent on the central government. Under a constitutional reform proposed by Chávez in 2007 and rejected in a referendum, the “commune” would have become the basic unit of social and political organisation. Despite the defeat, the plan has been partially implemented. Voters deemed to belong to these or any other of the “sectors” will also vote for their municipal representative. But it is the government that will decide who belongs to which voting bloc, and not everyone will have a “sectoral” vote.Hide Footnote

IV. The Risks of Escalation

The Maduro government has shown that it is willing to use state-sponsored violence to remain in power rather than give in to opposition demands for free and fair elections. Opposition protests have for the most part been non-violent, but its current leaders may not be able to retain control of the anti-Maduro movement, which includes sectors of the population that have little affinity with them.[fn]A poll by More Consulting, for example, carried out between 2 and 5 May 2017, found over 70 per cent in favour of Maduro leaving office this year, compared with around 55 per cent support for the opposition.Hide Footnote And while a split in the armed forces might bring about a swift conclusion to the conflict, it is also possible that it could lead to protracted violent clashes on the streets, with rival factions, both civilian and military, fighting for control.

A. Will the Opposition Shoot Back?

The Democratic Unity alliance, which represents the overwhelming majority of opposition political parties, says it is committed to a non-violent, electoral solution to the conflict. Many of its leaders, including members of parliament, have been injured while marching at the forefront of demonstrations without gas masks, helmets or other forms of protection.[fn]On 3 May alone at least five MPs were injured. “Varios diputados resultaron heridos tras represión en la marcha opositora”, Tal Cual, 3 May 2017. Miranda state governor and former presidential candidate Henrique Capriles was attacked by the National Guard on 29 May. “GNB agredió a Capriles y robó a su equipo en Las Mercedes”, El Nacional, 29 May 2017.Hide Footnote Despite their rejection of violence, the Maduro government has painted protest leaders as terrorists.[fn]“Presidente Maduro: Pese a algunos focos terroristas, Venezuela sigue en paz trabajando”, VTV (available on www.YouTube.com), 16 May 2017.Hide Footnote

Groups of youths, known as La Resistencia, have clashed for hours with security forces, using rocks, petrol bombs and other projectiles, including home-made mortars.

The demonstrations, however, have not been entirely peaceful. Groups of youths, known as La Resistencia, have clashed for hours with security forces, using rocks, petrol bombs and other projectiles, including home-made mortars. Trucks and buses have been hijacked and set alight; in a few cases “infiltrators” allegedly have been lynched.[fn]Circumstances surrounding some of the bus-burning incidents (including non-intervention by security forces and apparent presence of colectivos) suggest they may have been carried out by government supporters. The lack of response from security forces and the reported presence of colectivos seem suspicious. The most notorious lynching incident took place in the Altamira district of Caracas during a demonstration on 20 May when 22-year-old Orlando Figuera was set alight. The government has insisted that the victim, who later died, was lynched for allegedly being a chavista. The prosecution service, however, concluded that he had been accused of theft.
Hide Footnote
Communities and some outsiders regularly erect barricades in parts of the capital while elsewhere they have set fire to government buildings, ruling party headquarters and even police and military installations, most notably in the western states of Táchira and Barinas but also in Aragua, on the central northern coast, and Sucre to the east. In Zulia and Anzoátegui states, demonstrators have destroyed or damaged statues of Chávez. Protests have also erupted in communities west and south west of Caracas that until recently were bastions of chavismo.[fn]Particularly striking were mass demonstrations in the La Vega barrio, not far from the presidential palace, beginning on 2 June, in which local people complained of lack of food and medicines and were met with teargas and GNB riot squads. “La Vega amaneció entre protestas y represión”, El Nacional, 2 June 2017.Hide Footnote

The opposition leadership could lose further control if the conflict is not resolved quickly. Illegal firearms are available in large quantities and there are plenty of people – particularly former members of the police and armed forces – with the skills and experience to make use of them.[fn]An opposition politician told Crisis Group that ex-security forces members had offered to create an armed wing of the movement. The politician rejected the proposal. Crisis Group interview, Caracas, 8 May 2017.Hide Footnote

B. Will the Army Split?

On 10 April, three Venezuelan army lieutenants asked for political asylum in Colombia after crossing the border at Cúcuta. Foreign Minister Delcy Rodríguez called for their extradition, accusing them of plotting a coup. The lieutenants, who recorded a video calling on the armed forces to “turn their back on the tyrant”, belong to an apparently large group of dissident officers, most of whom graduated from the military academy in 2012. Analysts attribute their discontent to the presence of Cuban officers and rampant corruption in the upper echelons of the military.[fn]Javier Ignacio Mayorca, “Alzados en el Ejercito contra la cubanización”, Revista Clímax (elestimulo.com), 22 May 2017.Hide Footnote Many officers, from various branches of the armed forces, reportedly are in detention, either in military prisons or intelligence (DGCIM) installations.[fn]Girish Gupta & Andrew Cawthorne, “Fourteen Venezuelan army officers jailed in first week of protests – documents”, Reuters, 6 June 2017.Hide Footnote Some appear to be National Guard officers, detained for ignoring orders to repress demonstrations by force, although information is scanty.[fn]On 6 May defence minister General Vladimir Padrino López told National Guard officers, “I don’t want to see another National Guard (soldier) committing atrocities in the street”, in what was seen by some analysts as evidence of unease in the army over the behaviour of military riot squads. No change in their behaviour was subsequently observed, however. “Afirman que declaración de Padrino. López es un quiebre público con Reverol”, El Nacional, 7 June 2017.
Hide Footnote

The armed forces appear to remain largely unified, however. This cohesion could be tested if the government uses the army to bolster police and National Guard riot squads. It has already deployed some units to the interior, sending 600 Special Forces troops to the south-western state of Táchira on 17 May, along with 2,000 additional National Guards. Ostensibly, their role is to neutralise “paramilitary” or “mercenary” groups allegedly employed by the opposition to “overthrow the government”.[fn]Hernán Lugo Galicia, “Uso de fuerzas especiales y tres anillos forman parte del Plan Zamora (1)”, Crónica Uno, 23 May 2017. See Section C (below) for more on Plan Zamora.Hide Footnote

C. “Colectivos” Unleashed

On 17 April, President Maduro announced plans to expand the Bolivarian Militia to 500,000 (and eventually 1 million) members, each equipped with a rifle.[fn]The Militia was created by Hugo Chávez as a fifth branch of the Venezuelan armed forces (the constitution only recognises four) in 2008. Its allegiance is to the chavista movement, not the nation. Edecio Brito, “Control Ciudadano: la milicia se consolida como un cuerpo armado al servicio del Gobierno”, El Pitazo (elpitazo.com), 17 June 2016.Hide Footnote The militia, he said, would defend the country against a “ferocious offensive” mounted by opposition “traitors”. Diosdado Cabello said there were also 60,000 motorizados ready to protect the centre of Caracas. These armed civilians on motorcycles, also commonly referred to as colectivos, act as para-police groups, enforcing political loyalty in the barrios and sometimes helping police and National Guard break up opposition demonstrations.[fn]Attorney General Luisa Ortega told the press on 24 May that prosecutors had opened criminal investigations into 165 armed civilian groups. “Fiscal Ortega Díaz: ‘A Pernalete lo impactó una bomba lacrimógena’,” El Pitazo (elpitazo.com), 24 May 2017.Hide Footnote The government denies involvement with the colectivos, though photographs and videos apparently show armed civilians on motorcycles operating in coordination with uniformed security forces.[fn]In recent weeks, armed civilians acting in concert with the National Guard have invaded and damaged private property, sometimes in daylight hours. Sabrina D’Amore, “Paramilitares y GNB reprimieron, robaron y amedrentaron a vecinos de La Urbina”, Runrunes, 4 May 2017.Hide Footnote

A day later, the president authorised implementation of the first phase of Plan Zamora, a military/civilian plan to combat threats to internal order by those allegedly planning a coup. It includes deploying armed civilians alongside security forces and using military tribunals to try government opponents.[fn]The systematic incorporation of para-police groups into public order functions was prefigured in the unconstitutional State of Exception decree of 13 May 2016. “Decreto No. 2.323, mediante el cual se declara el Estado de Excepción y de la Emergencia Económica, dadas las circunstancias extraordinarias de orden Social, Económico, Político, Natural y Ecológicas que afectan gravemente la Economía Nacional”, Gaceta Oficial Extraordinaria No. 6.227.Hide Footnote The pretext for the plan’s launch was an outbreak of looting in the country’s third city, Valencia. Some 780 people were arrested, including 251 put before military tribunals on charges such as rebellion.[fn]According to the legal aid group Foro Penal Venezolano, collective hearings involving up to 40 defendants took place. “¿Por qué militares procesan a civiles?”, BBC Mundo, 9 May 2017.Hide Footnote

D. A Failing State?

The Venezuelan government is unable to fulfil some of the modern state’s most basic functions. Not only is the country suffering from acute food insecurity and a collapsing health system (see below), but also from rampant and largely unpunished criminal violence: more than 90 per cent of the 20,000-plus homicides committed every year go unpunished.[fn]According to the attorney general there were 21,752 murders in Venezuela in 2016, a rate of over 70 per 100,000 inhabitants. Human rights and security activists put the impunity rate for homicide at between 94 and 98 per cent, similar to rates recorded in Central America’s violent Northern Triangle (El Salvador, Guatemala and Honduras).Hide Footnote Gangs run many of the country’s prisons, using them to organise extortion, kidnapping and hijacking rackets. The colectivos engage in crime as well as threatening and harassing the opposition. On the Colombian border, a similar role often is played by guerrillas of the Ejército de Liberación Nacional (ELN), an armed leftist group engaged in tentative peace talks with the Colombian government, or by the home-grown paramilitaries of the Fuerzas Bolivarianas de Liberación, who operate smuggling, kidnap and extortion rackets and profess loyalty to the government. Both groups have threatened opposition activists in border areas.[fn]Crisis Group interview, foreign journalist reporting on border region, 6 June 2017.Hide Footnote

State security forces are increasingly prone to brazenly predatory acts against civilians.

Control over certain territories is shifting to quasi-state armed groups. In south-eastern gold and diamond mining areas, the so-called sindicatos (nominally miners’ unions, but in practice armed, criminal gangs reportedly linked to senior military officers and the state government) exercise de facto control, smuggling vast quantities of precious minerals out of the country. “They come and ask for food”, said a farmer in Bolívar state. “If you say you don’t have any, they shoot your cattle right in front of you”.[fn]Crisis Group telephone interview, farmer in El Callao, Bolívar, 22 May 2017.Hide Footnote State security forces are increasingly prone to brazenly predatory acts against civilians. National Guard officers at alcabalas (military checkpoints on the highway) extort money from smugglers and legitimate transport companies alike, and they are not alone. Fruit and vegetable vendors in central Venezuela say their costs have increased because of the so-called vacunas (literally “vaccinations”, meaning bribes) that the truckers have to pay en route. Informal alcabalas sometimes spring up even on main highways in daylight.[fn]Crisis Group telephone interview, security analyst in Maracaibo, 31 May 2017. GNB troops, as well as police, have also been accused in recent days of systematically robbing demonstrators in Caracas, particularly of their mobile phones and other valuables. Opposition leader Henrique Capriles said on 29 May that he and his staff had been beaten and robbed by the GNB. “GNB agredió y robó a su equipo en Las Mercedes”, El Nacional, 29 May 2017.Hide Footnote

V. How to Prevent a Catastrophe

Venezuela is immersed in a profound crisis that is not just political but also economic (see graphs 1 and 2 below). Per capita GDP has fallen by more than a third since 2012, the second worst economic collapse in recent Latin American history.[fn]Francisco Rodríguez, “Don’t let Venezuela become the next Libya”, Financial Times, 31 May 2017. The worst was wartime Nicaragua 1977-1979.Hide Footnote Ten per cent of the population living in extreme poverty (around 1.5 million people) admits to obtaining food from the garbage.[fn]Encuesta Condiciones de Vida (Universidad Central de Venezuela, Universidad Católica Andrés Bello & Universidad Simón Bolívar), February 2017. “Encovi: 82% de los hogares está en pobreza”, Agencia Efe, 17 February 2017.Hide Footnote Infant mortality increased by more than 30 per cent between 2015 and 2016, and more than 11 per cent of children suffer from acute malnutrition.[fn]Health Minister Antonieta Caporale was sacked on 10 May, just days after publishing the epidemiological bulletins for 2016, which revealed a 30 per cent increase in infant mortality and a 76 per cent rise in maternal mortality, as well as the reappearance of diphtheria after 24 years and a 76 per cent increase in malaria cases. “Lo que revelan las cifras de salud oficiales de Venezuela”, BBC Mundo, 10 May 2017. The bulletin had not been published since late 2014.Hide Footnote  Most essential medicines are unobtainable. Domestic production has collapsed, with manufacturing firms operating at 20-30 per cent of installed capacity. Imports fell by 72 per cent between 2012 and 2016, and continue to plummet in 2017.

Negative Growth. Venezuela’s national income plummeted in 2015. Although forecasts suggest some recovery, the economy is not expected to grow in real terms for years. (Change in GDP at constant prices). Data after 2016 are estimates. International Monetary Fund and Bloomberg.
Economists forecast that Venezuela’s economy in 2019 will be roughly the same size it was in 1999. (GDP in real terms relative to 1996). Note: Data for 2016 is an estimate, reflecting IEA data showing a drop of 220,000 barrels a day that year. BP, International Energy Agency and Bloomberg.

To pay its most urgent bills (especially the foreign debt) the government is selling off assets at massive discounts.[fn]In May, the government sold $2.8 billion in state oil company bonds to the investment bank Goldman Sachs for just 31 cents on the dollar. Kejal Vyas & Anatoly Kurmanaev, “Goldman Sachs bought Venezuela’s state oil company’s bonds last week”, The Wall Street Journal, 28 May 2017.Hide Footnote Lack of food, medicines and other basic goods, along with a collapse in the purchasing power of wages, is driving tens of thousands to leave the country, especially to neighbouring Colombia and Brazil, straining their resources.[fn]Colombia recently sent a delegation to Turkey to learn about how to respond to sudden mass migration. “Preparan un plan de contingencia por llegada masiva de venezolanos”, El Tiempo (Colombia), 17 May 2017. It is reported to be preparing to receive up to a million displaced people, many of them of Colombian origin.Hide Footnote The government’s response is to blame its enemies and radicalise its base – a recipe for further polarisation, violence and poverty. There is no indication that the group around Maduro, including both civilian and military leaders, has any intention of negotiating a return to democracy. Such a restoration will only take place if pragmatists in government and the judicial system gain the upper hand, or if the government collapses, either because it runs out of money, or because the armed forces withdraw support.

The opposition sees little option but to maintain its campaign of non-violent demonstrations in a bid to persuade both the armed forces and/or civilians in key positions (especially the National Assembly, the Supreme Court, the electoral authority and the ombudsman’s office) to break ranks. Offers of leniency to government members through a transitional justice bill passed by parliament could prove useful in that regard. Government hardliners may ultimately need to be offered safe passage to exile, since no feasible transitional justice system is likely to offer them immunity from prosecution for human rights violations or involvement in serious organised crime.

Neither Venezuela’s neighbours nor the wider international community should remain on the margins. The region should put in place a “contact group”, ideally comprising four to six countries, including at least two allies of the Venezuelan government, to push for a negotiated solution. This effort will need to secure broad international support, including from major powers friendly to the chavista regime, such as China and Russia. Such a move already has been contemplated by a majority bloc within the OAS. But a consultative meeting of foreign ministers on 31 May failed to reach consensus, with the fourteen-nation CARICOM bloc of Caribbean states urging “non-interference”. The meeting was to reconvene just before the OAS General Assembly in Cancún, Mexico, 19-21 June 2017.

If the OAS fails to set up a contact group, an ad hoc group of countries should step in to promote a negotiated solution.[fn]There are precedents for this, of which the Contadora Group, formed in 1983 by Colombia, Mexico, Panama and Venezuela, and which laid the groundwork for peace in Central America, is the most obvious.Hide Footnote The most urgent task of either a contact or an ad hoc group would be to put pressure on the Maduro government to abandon plans for a constituent assembly, commit to free and fair elections, and begin complying with the four key commitments it made during the 2016 dialogue but never implemented.[fn]The four (succinctly enumerated in a 2 December 2016 letter from Vatican Secretary of State Pietro Parolin to Maduro) are: freedom for political prisoners, restoration of the powers of the National Assembly, autonomy for the CNE and TSJ, and a humanitarian corridor.Hide Footnote The powers of the National Assembly should be restored, political prisoners released, a humanitarian assistance program launched and steps taken to replace government loyalists in the Supreme Court and the electoral authority with independent, respected professionals in accordance with constitutional requirements.

Should neither persuasion nor protest force the government to change course, then the international community must be prepared to deal with the humanitarian consequences of even more intense conflict.

It is likely, as indicated above, that little progress will be made until the Maduro government runs out of alternative options, or is replaced by a more pragmatic leadership. Should neither persuasion nor protest force the government to change course, then the international community must be prepared to deal with the humanitarian consequences of even more intense conflict, including mass emigration, extreme hunger, and even more bloodshed.

Should the government prove willing to negotiate in good faith, however, restoration of constitutional rule probably will require formation of a transitional government of national unity under a mutually acceptable interim president, pending regional elections (currently scheduled for December 2017) and presidential elections in December 2018 as required under the 1999 constitution. The constitution may need to be amended to reinstate adequate checks on executive power and reassure chavistas there will be no witch hunts under a future opposition presidency. Given the massive foreign debt and critical scarcity of foreign reserves, there is also an urgent need for debt relief and a swift injection of capital to restore financial viability. An emergency economic program should also include extensive welfare programs for the most vulnerable groups in society.

There is still time to avert an outbreak of full-scale violence, but only if the government exercises restraint, the opposition shows leniency, and the international community presses both sides to cooperate while holding out the promise of immediate humanitarian relief and long-term economic aid.

Caracas/Brussels, 19 June 2017

Appendix A: Map of Venezuela

Map of Venezuela. International Crisis Group/KO/June2017.
Protesters clash with riot police during a rally to demand a referendum to remove Venezuela's President Nicolas Maduro in Caracas, Venezuela, 1 September 2016. REUTERS/Carlos Garcia Rawlins
Report 59 / Latin America & Caribbean

Venezuela: Tough Talking

With a collapsing health care system, sky-rocketing inflation and crippling state controls, Venezuela is beset by unprecedented social and economic crises. To end the root problem of political paralysis, the Chavista government and opposition must use outside-mediated negotiation to restore democratic and responsible economic governance.

  • Share
  • Save
  • Print
  • Download PDF Full Report

Executive Summary

Venezuela is in the throes of a profound political conflict that is greatly complicated by an economic and social crisis of almost unprecedented proportions. Soon to enter its eighteenth year in power, the chavista government now led by President Nicolás Maduro has seen its popularity collapse under the effects of an economy that has been contracting since 2014, with inflation approaching 1,000 per cent on an annualised basis. Food and other basic goods are often unobtainable or out of reach of the majority. Yet far from steering in a new policy direction as the oil revenues on which it depends wane, it has intensified state controls, redoubled attacks on supposed business saboteurs and choked off the constitutional channels through which an ascendant political opposition could mount a challenge. As 2017 approaches, political paralysis and economic misery presage serious turbulence unless recently established negotiations with that opposition produce rapid progress toward the transition Venezuela needs to return to democratic rule.

Both the escalating political hostility and the onset of talks can be traced to 20 October, when the government dealt a fatal blow to the only short-term electoral route out of political conflict: a recall referendum against President Maduro, as provided for in the constitution. Responding to rulings by five regional criminal courts, announced not by judges but by state governors belonging to the most hardline faction of the ruling United Socialist Party of Venezuela (PSUV), the National Electoral Council (CNE) imposed an indefinite suspension of the referendum process. This came less than three months before the 10 January 2017 date after which a referendum would no longer trigger a presidential election, even if successful. The government-controlled CNE’s action seemed, therefore, to all but kill the initiative.

The opposition Democratic Unity (MUD) alliance called this a coup d’état and announced a political offensive on three fronts. While stepping up street action in a bid to force the government to change its mind, it simultaneously began proceedings in the National Assembly against President Maduro. It also said it would call on the Organization of American States (OAS) to apply the Inter-American Democratic Charter, whose terms allow for the suspension of a member state.

While the two sides engage in political combat, the distress of society has intensified. Vital medicines are ever harder to find, and the health service is collapsing, causing thousands of needless deaths. The government’s reaction to violent crime that costs over 20,000 lives a year is a shoot-to-kill policy against alleged criminals and raids by security forces on poor barrios that have brought widespread accusations of human rights abuses. Elements of the armed forces have recently been implicated in massacres, most recently the killing of over a dozen young men in the Barlovento region of Miranda state.

By denying power to the elected National Assembly and cancelling or suspending elections, the government risks provoking political violence, though that is not the only possible outcome. Despite its weaknesses, it could, under certain circumstances, consolidate itself as in effect a military dictatorship, via rigged elections or their complete abolition. If Venezuela is to save its democracy, negotiation over the terms of transition is needed, mediated by outsiders since no domestic institution commands the respect of both sides. An abrupt transfer of power, even if possible, might lead to serious instability and violence.

Direct talks between the two sides, “accompanied” by an envoy of Pope Francis I and “facilitated” by former Spanish Premier José Luis Rodríguez Zapatero and two Latin American ex-presidents, began at the end of October, but their future hangs by a thread. A series of leadership changes at the national and international levels early in 2017, possibly including the Venezuelan presidency, raise both the possibility of substantial progress and the threat of a violent or authoritarian backlash. The present deadlock clamours for an approach based on dialogue, ideally leading to an interim, cross-party administration that could enforce urgently needed measures. A concerted effort is required by all political persuasions, but also the international community, especially Latin American governments, regional organisations such as the Union of South American Nations (UNASUR) and the OAS, as well as the European Union (EU) and the UN, to use this period of uncertainty to restore democracy, the rule of law and responsible economic governance.

Recommendations

For a start at restoring democratic rule, economic and social well-being and political stability

To the government:

  1. Negotiate with the opposition in good faith for an agreement that provides a clear electoral calendar, preferably advancing the December 2018 presidential poll; lifts restrictions on the National Assembly; and provides for appointment of genuinely independent and qualified Supreme Court justices and CNE board members.
     
  2. Lift restrictions on humanitarian aid from donors to alleviate suffering, without waiting for agreement on a political solution to the crisis.
     
  3. Build confidence in the negotiations by releasing all political prisoners and dropping charges against more than 2,000 opposition activists, most of whom were arrested for participation in anti-government demonstrations.
     
  4. Draw on national and international economic expertise to negotiate with the opposition an emergency plan to restrain inflation and restore the purchasing power of wages.
     
  5. Reconsider urgently the militarised policing policy in light of proven abuses and extrajudicial executions.

To the MUD and the leadership of the National Assembly:

  1. Refrain from abandoning talks with the government and make every effort to seek a creative, workable solution to the crisis through establishment of an electoral calendar and economic reform.
     
  2. Maintain the stated commitment to non-violent protest and seek to avoid bloodshed at demonstrations.

To the Vatican and other facilitators:

  1. Support and incrementally reinforce the facilitation, pressing both sides to negotiate in good faith.
     
  2. Insist on provision of humanitarian aid, while providing assurances it will not be used to undermine the government.

To the government and MUD jointly:

  1. Strengthen the negotiation process by accepting civil society input and international verification procedures for agreements; and be open to using external technical expertise to address deadlocked issues.
     
  2. Reinforce an agreed economic and institutional reform plan through power-sharing arrangements, including participation of opposition representatives in an interim unity government until new elections.

To regional governments, the U.S. and the European Union:

  1. Support the facilitation process in regional and international organisations, above all the Union of South American Nations (UNASUR), the OAS and UN, and offer to serve as guarantors and witnesses and to finance any external expertise required for the negotiations.
     
  2. Hold Venezuela to its commitments under international law and multilateral treaties regarding democracy, the rule of law and respect for human rights, including by activating relevant provisions of the Inter-American Democratic Charter and Mercosur’s Ushuaia Protocol.

Caracas/Bogotá/Brussels, 16 December 2016

I. Introduction

An imperfect democracy when the present regime came to power in 1999 under the late President Hugo Chávez, Venezuela has been steadily sliding into authoritarianism. Following Chávez’s death from cancer in 2013, the presidency passed to his chosen successor, Nicolás Maduro, who won a narrow election victory that April. Maduro has stepped up repression as his popularity has declined and political polarisation has intensified. The plummeting price of oil, on which the economy is almost wholly dependent, has exposed the deep flaws in social and economic policies that combine draconian price and exchange controls and expropriations with high levels of corruption and inefficient handouts to the regime’s support base. The result has been widespread shortages, hunger and disease, with a corresponding surge in popular anger and political tension.[fn]For an account of the collapse in food supplies and medical services, see Crisis Group Latin America Briefing N°33, Venezuela: Unnatural Disaster, 30 July 2015. The increasingly authoritarian nature of the regime is dealt with in Briefings N°s 30, Venezuela: Tipping Point, 21 May 2014; 31, Venezuela: Dangerous Inertia, 23 September 2014; and 34, The End of Hegemony: What Next for Venezuela?, 21 December 2015.
Hide Footnote
 More than 40 persons died in 2014 during several months of street confrontations between security forces, government loyalists and a faction of the opposition. In 2015, Caracas had the highest murder rate of any city in the world.[fn]“The world’s most violent cities”, The Economist, 3 February 2016.Hide Footnote

After losing the December 2015 parliamentary elections, the government packed the nominally autonomous Supreme Court (TSJ) with unconditional supporters and has since used it to block all laws and other initiatives by the National Assembly, strip that body of its constitutional powers of oversight and control and, on 5 September 2016, declare all its actions null and void.[fn]See Crisis Group Latin America Briefing N°35, Venezuela: Edge of the Precipice, 23 June 2016. The TSJ found the National Assembly “in contempt” of its ruling that three MUD legislators from Amazonas state, accused by the government of fraud in the 2015 election, should be barred from taking their seats while their cases are heard. Their absence deprives the opposition of a two-thirds majority and obliges it to seek government support, for example for appointment of CNE board members.Hide Footnote  The government-controlled National Electoral Council (CNE) has been used to delay and ultimately suspend a recall referendum on Maduro’s presidency and to postpone for at least six months elections for state governors which, under the constitution, should have taken place in December. Protests have been met with outright prohibition, roadblocks and repressive policing, as well as deployment of armed civilians who have beaten and shot at demonstrators. Human rights groups say the government holds over 100 political prisoners, while thousands more are subject to various restrictions on their freedom.

Crisis Group carried out over twenty interviews in Caracas with participants in the dialogue between government and opposition, political and security analysts, diplomats based in the country, journalists and representatives of the business community in October and November during research for this report. Efforts were made to contact current members of the government to hear their interpretations of recent events, but these approaches went unanswered.

II. The Poisoned Polity

A. How the Government Aborted the Recall Referendum

Following the parliamentary elections and installation of the opposition-controlled National Assembly on 5 January 2016, the Democratic Unity (MUD) alliance debated strategies for pursuing its priority objective of cutting short the Maduro presidency, which would otherwise run to January 2019. Each had its proponents among the four leading member parties. They included a recall referendum, a constitutional amendment to reduce the presidential term and election of an assembly to rewrite the constitution and renew all branches of state. But after the TSJ ruled out an amendment to the constitution, the referendum option, favoured by former presidential candidate and state governor Henrique Capriles of the Primero Justicia (PJ) party, won out. The referendum request was formally submitted to the CNE in March, leaving some nine months for a meaningful vote to be held.[fn]Article 72 of the constitution states that any elected official can be submitted to a recall referendum after the halfway point of his/her term, provided 20 per cent of voters agree. Article 233 stipulates that if the president’s mandate is revoked during the last two years of his term of office, the vice president assumes the presidency until the term is completed. Maduro, elected in April 2013, is due to leave office in January 2019, since he is completing Chávez’s six-year term, which began three months earlier. However, if a referendum held before January 2017 were to produce a vote to recall him, an election for a new president would have to be held within 30 days.Hide Footnote

The government argued there would not be time to hold the referendum in 2016. The CNE applied the most restrictive, time-consuming interpretation of the regulations governing referendums and improvised new rules as it went along.[fn]No referendum law has been passed, so the process is regulated by the government-controlled CNE, using a set of 2007 rules (“Normas para Regular el Procedimiento de Promoción y Solicitud de Referendos Revocatorios de Mandatos de Cargos de Elección Popular”, Consejo Nacional Electoral Resolucion 070906-2770, 18 December 2007). These require the promoters of the referendum to first obtain the signatures of 1 per cent of the electorate, in order to obtain permission to gather the 20 per cent. However, the CNE added several new procedures that delayed the process, including digitalisation of the completed signature forms, a “verification commission” run by the ruling United Socialist Party of Venezuela (PSUV), transcription of the forms and their subsequent auditing. José Ignacio Hernández, “8 violaciones del CNE a la Constitución en el trámite del revocatorio, Prodavinci, 13 May 2016.Hide Footnote It took almost two months simply to issue the official forms on which the MUD, at the first stage, had to collect signatures of 1 per cent of the electorate in order to obtain permission to next gather the 20 per cent required to trigger a referendum. More than two million signed (over ten times the number required), but the CNE rejected over 600,000 for a variety of reasons. Whole pages of signatures were ruled invalid because the president’s name or the word “president” were misspelled. Signatures of those who signed outside their home constituencies also were not counted.[fn]The logic of this rule, promulgated by the CNE after the process began, is uncertain, since the office that is the subject of the referendum (the presidency) corresponds to the whole country.Hide Footnote Those whose signatures remained had to “validate” them at centres designated by the CNE, using fingerprint machines.

The electoral authorities resorted to further delays and obstacles.[fn]The validation process was set for 20-24 June, but hundreds of thousands of voters were unable to comply with the rules because the CNE provided only 300 fingerprint machines across the country, many in locations remote from the population centres holding most opposition voters. It then took the CNE until 24 August to acknowledge that the 1 per cent target had been met, whereupon it should have set the date for gathering the 20 per cent stipulated by the constitution. It had already taken 145 days to reach this point, though a reasonable calculation based on its own regulations would only amount to 41 days. “CNE se tomó 141 dias adicionales a los previstos para el análisis del 1% de las firmas, El Pitazo, 3 August 2016.Hide Footnote On 22 September, the CNE announced a timetable that ruled out a recall referendum before the end of the first quarter of 2017, thus rendering it ineffectual for changing the government. In addition, it conditioned triggering of the referendum on the MUD achieving signatures of not only 20 per cent of the national electorate, but 20 per cent in each of the country’s 23 states (plus the capital district). The dates for gathering the 20 per cent were 26-28 October.

The government may have calculated that the MUD would abandon the recall referendum campaign rather than risk failure in a drawn-out process. However, the Maduro administration also pursued a parallel strategy involving the courts. The president had appointed leading pro-government politician Jorge Rodríguez – mayor of central Caracas and a former CNE board member – to lead the effort to thwart the referendum. He and others claimed the signatures rejected at the first stage were evidence of “massive fraud” and petitioned the TSJ to block the entire process and/or strip the MUD of its legal status. For reasons that remain unclear, five regional criminal courts, not the TSJ, produced the “fraud” sentence that led to the suspension of the referendum.[fn]“5 gobernadores oficialistas anuncian anulación de recolección de 1% de firmas por tribunales regionales”, Runrunes, 20 October 2016.Hide Footnote When the MUD petitioned the TSJ to allow it to gather signatures of 20 per cent of the electorate, that court’s electoral branch rejected the request.[fn]“Sala electoral rechazo amparo que solicitaba reanudar recolección del 20%”, Efecto Cocuyo, 11 November 2016.Hide Footnote

B. The MUD’s Response

It took the MUD several days of internal debate and consultations to respond to the CNE’s 22 September timetable announcement. On 26 September, it declared that it considered the conditions unconstitutional but would persist with its campaign for a referendum, while simultaneously mobilising street protests, acting in parliament and seeking international support.[fn]“La respuesta de la MUD a las condiciones del CNE para la recolección del 20%”, Tal Cual, 26 September 2016.Hide Footnote It rejected outright that the 20 per cent requirement should apply to each state and postponement of the referendum to 2017. It also announced a nationwide protest for 12 October, which took the form of a dress rehearsal for the three days of signature-gathering due to take place on 26-28 October. The response from its supporters, however, was lukewarm.

On 23 October, following suspension of the referendum process by the CNE, the National Assembly began to debate what the MUD termed the “restoration of the constitution”. Also on the agenda was what was loosely referred to as a “political trial” or “impeachment” of Maduro, though without support from other state institutions (all controlled by the executive) the legislature is not constitutionally empowered to remove the president. The MUD proposed to declare him “politically responsible” for the crisis, accuse him of abandoning his duties and investigate allegations he was born in Colombia, so not eligible to be president.[fn]Maduro’s parents were Colombian. He insists he was born in Venezuela but has never presented a birth certificate. He and other government figures have given four different accounts of his precise birthplace, fuelling suspicions he may have been born in Colombia. On 28 October the TSJ ruled that the president is Venezuelan, with no other nationality, and threatened criminal proceedings against anyone who denies this. “TSJ confirma que Nicolás Maduro es venezolano y nació en La Candelaria”, Efecto Cocuyo, 28 October 2016. Article 227 of the constitution stipulates that a presidential candidate must be Venezuelan by birth and have no other nationality.Hide Footnote During the debate, government supporters, some armed, broke into the grounds of the building and were with difficulty prevented from entering the legislative chamber. Some journalists were attacked and robbed.[fn]“Toma por asalto a la Asamblea Nacional deja 6 violaciones a la libertad de expresión”, Espacio Público, 24 October 2016.Hide Footnote The mob withdrew only when ordered by Jorge Rodríguez.[fn]Crisis Group interview, journalist, 24 October 2016.Hide Footnote The president said he was surprised by the incident, but the intruders had entered “cheerfully, some of them dancing”, and their intention had been to ensure their voice was heard.[fn]“Maduro: Me sorprendió la gente alegre y bailando que entró al Parlamento”, 2001, 25 October 2016.Hide Footnote

Against this inauspicious background and to the surprise of many, Vatican envoy Monsignor Emil Paul Tscherrig, nuncio to Argentina, announced on 24 October that “the national dialogue has begun”. A first meeting between government and opposition, he said, would be held on Margarita Island on 30 October. The MUD executive secretary, Jesus “Chuo” Torrealba, confirmed this but was almost immediately contradicted by several leading MUD politicians. Capriles said he learned of the agreement “on television”, a claim other opposition insiders have strongly disputed.[fn]Crisis Group interview, political analyst, 22 November 2016.Hide Footnote Both Capriles and Luis Florido, national political coordinator of Voluntad Popular (VP), said conditions were not right for a dialogue. Henry Ramos Allup, speaker of the National Assembly, insisted there would be a meeting only if the MUD as a whole agreed.

The MUD reiterated its call for protest demonstrations on 26 October, but clearly wrong-footed, the leadership spent the following week trying to salvage its position. It insisted first of all, in a bid to allay suspicions it was seeking to negotiate a deal out of the public eye, that any meeting be in Caracas. The mid-week demonstrations went ahead as planned, though the turnout, while not negligible, reflected supporters’ confusion.[fn]The MUD claimed hundreds of thousands had turned out in Caracas, but police reports suggested no more than 75,000.Hide Footnote Wrangling continued to the last minute, with the main opposition parties (the so-called G4) reaching agreement just half an hour before the dialogue began on 30 October. VP declined to take part, while the other three leading parties agreed to walk away if they were unable to achieve the conditions VP demanded.[fn]“Voluntad Popular no asistió al encuentro del diálogo por considerar que no están dadas las condiciones y ratifica convocatoria en Unidad a Miraflores”, press release, VP, 30 October 2016.Hide Footnote Fifteen smaller member parties issued a statement that the dialogue under current conditions “makes no sense” and demanded that the opposition be represented not only by the G4, but also by other leading politicians and civil society.[fn]“15 partidos de la MUD presentaron propuestas ante eventual diálogo”, El Nacional, 29 October 2016.Hide Footnote

C. The Dialogue Dilemma

The MUD had pushed hard for Vatican involvement in the facilitation led by Rodríguez Zapatero, the former Spanish prime minister, whose members many in the opposition regarded as too close to the Maduro government.[fn]Ewald Scharfenberg, “Capriles dice que Zapatero esta ‘descalificado’ para mediar en conflicto de Venezuela”, El País Internacional, 26 June 2016.Hide Footnote The Vatican had stressed that it would only take part if both government and opposition formally requested it, and there was clear will on both sides to negotiate in good faith.[fn]Vatican Secretary of State Pietro Parolin responded by mid-September letter to requests of Ernesto Samper (UNASUR secretary-general and former Colombian president) and the facilitators led by Zapatero, saying the Vatican would participate if it received, “a direct invitation from the interested parties, once they have taken the firm decision to formally initiate the dialogue”.Hide Footnote Hence the surprise when, apparently against the advice it was receiving from Caracas, its envoy announced the beginning of talks.[fn]Crisis Group interview with senior Church source, 4 November 2016.Hide Footnote There had been a widespread perception a Latin American pope, whose inner circle includes people with strong backgrounds in Venezuelan affairs, would be well placed to help steer the country toward a negotiated solution, but the moment looked inauspicious.[fn]Chief among the “Venezuela experts” at the Vatican is Secretary of State Parolin, who served as nuncio in Caracas (2009-2013) and has maintained close contacts with the country. The recently elected general of the Jesuits (the order to which Pope Francis I belongs) is a Venezuelan, Arturo Sosa. The pope himself has a long friendship with the Archbishop of Mérida, Venezuela, Baltazar Porras, whom he recently appointed cardinal. There are some tensions, however, between the Vatican and the Venezuelan Church, which the government has long perceived as “counter-revolutionary”. Venezuela’s other cardinal, Jorge Urosa Sabino, is seen as a critic of the pope (Juan Francisco Alonzo, “El Cardenal Urosa Sabino no sigue los pasos del Papa Francisco”, Tal Cual, 9 January 2016). Some in the Venezuelan opposition consider the pope a communist.Hide Footnote While the opposition needed quick results to hold its coalition together, the government seemed to have every incentive to use the talks to weaken the MUD’s campaign to reverse the referendum decision and to spin them out until after 10 January, the date after which a referendum could not produce a new presidential election.

Seemingly frustrated at the MUD’s dithering over participation, both the Vatican and the U.S. put pressure on the opposition not to abandon its commitment to dialogue. The Venezuelan Church warned that the pope’s involvement could not be guaranteed if it walked away.[fn]The Venezuelan bishops conference issued a stern communiqué on 30 October warning against reneging on the dialogue commitment. Political and Church sources told Crisis Group of the Vatican’s withdrawal threat, but the Church was keen to stress the pope’s commitment to success. Moderates in the MUD leadership, many with their own doubts about the wisdom of talking at this point, found themselves both under fire from more hardline allies and backed into a corner by the facilitators.

On 3 November, following the first dialogue session, Maduro publicly declared that the opposition would “never again enter Miraflores, either with votes or with bullets”.[fn]Ibis León, “Maduro: Ni con votos ni con balas entraran más nunca en Miraflores”, Efecto Cocuyo.com, 3 November 2016. The reference is to the Miraflores presidential palace. Later, Maduro added that the dialogue should continue through 2017-2018.Hide Footnote The early results – in particular the first substantive agreement, announced after the second plenary session on 11 November – seemed to confirm sceptics’ worst fears. Framed in part in language that looked like capitulation to government views, it committed the MUD to accept fresh elections in the three Amazonas constituencies at the centre of the TSJ’s September finding that the National Assembly was in contempt of court and consequently that its actions have no validity, in return for which the TSJ would lift that ruling. It was also agreed that the two (of five) CNE board members whose terms expire in December would be replaced, supposedly in a way to ensure the body’s neutrality, and that political prisoners (“detained persons”) would be released. But details were sketchy.[fn]“Los cinco acuerdos del gobierno y la oposición tras la II reunión plenaria del Diálogo Nacional”, Noticias24, 12 November 2016. On the contempt ruling and the importance of the three National Assembly seats, see fn. 3 above.Hide Footnote

The problem was compounded by the fact that the two sides gave conflicting accounts of what had been agreed. A particular bone of contention within the opposition was that no reference was made to the recall referendum issue or any form of early elections (the next regular presidential election is due in December 2018). By late November neither matter had yet been formally raised at the talks, despite the MUD’s public assertion that this was its main objective.[fn]Crisis Group interview, member of MUD negotiating team, 22 November 2016. “En el diálogo nunca se ha planteado la salida electoral de Maduro”, Agencia EFE, 22 November 2016.Hide Footnote The government publicly rejected the notion of discussing them.

D. Why Has the Country Not Erupted?

Over the past two years, Venezuelans have endured an almost unprecedented collapse of living standards. Protests over food shortages, poor public services such as water and electricity and the inexorable increase in violent crime have risen dramatically. In the first five months of 2016, those over food shortages were up 320 per cent from the previous year. June was the peak month, with 728, of which 274 were over food. From January to October, there were over 700 incidents of looting or attempted looting. On 14-15 June, a particularly violent and protracted outbreak of looting took place in the eastern city of Cumaná, Sucre state. The police and National Guard response left two dead, two dozen injured and several hundred arrested.[fn]Figures from Observatorio Venezolano de Conflictividad Social (Radar de la Conflictividad); D. Iriarte, Varios muertos y cuatrocientos detenidos por los saqueos en el nordeste de Venezuela”, El Confidencial, 16 June 2016. The governor of Sucre state, Luis Acuña, denied there had been deaths and attributed the disturbances to “vandalism … orchestrated by the opposition”.Hide Footnote There was much speculation whether there would be a nationwide social upheaval comparable to the “Caracazo” of 1989, in which hundreds were killed by security forces and that profoundly affected politics and society thereafter.[fn]Margarita López Maya, “The Venezuelan ‘Caracazo’ of 1989: Popular Protest and Institutional Weakness”, Journal of Latin American Studies, vol. 35, no. 1, February 2003.Hide Footnote

However, looting dropped from a high of 126 incidents in June to 58 in July, and social tension subsided somewhat.[fn]Lorena Meléndez, “Saqueos de agosto de 2016 duplican la cifra de hace un ano”, Runrunes, 18 September 2016.Hide Footnote Protests overall were down to 504 in October. Several factors contributed. On the political front, the opposition’s mobilisation around the demand for a recall referendum released some pressure by offering a possible way out of the crisis. Deaths and injuries among looters may have discouraged some protesters. But two government moves probably had the most impact. Border controls were relaxed in practice – notably after a partial normalisation of crossings agreed with Colombia in August – allowing private individuals, companies and government bodies to import food at market prices.[fn]“Colombia y Venezuela viven nuevos vientos, Revista Semana, 13 August 2016. Anatoly Kurmanaev, “Venezuela backs away from price controls as citizens go hungry”, The Wall Street Journal, 14 October 2016.Hide Footnote And in July, a decision was taken to divert much of the distribution of basic goods at controlled prices from supermarkets (private sector and public) into the Local Supply and Production Committees (CLAPs) system.[fn]For an official account of this system, see “Que son los CLAP?”, Instituto Nacional de Nutrición, Ministerio del Poder Popular para la Alimentación, 6 August 2016.Hide Footnote

Through the CLAPs, run by the military and civilian organisations linked to the ruling United Socialist Party of Venezuela (PSUV), basic foodstuffs are distributed directly to low-income consumers at controlled prices. Though the CLAPs are limited in scope, inefficient and plagued by corruption, they have had the effect of reducing the queues outside retail outlets (a breeding-ground for popular anger) and of enabling the authorities to use food as a tool for political control, by threatening to deny it to dissenters.[fn]Franz von Bergen, “La discriminación política opera en los CLAP al repartir alimentos”, El Nacional, 29 May 2016.Hide Footnote On 4 October, President Maduro decreed that half of food production should be sold to the government for distribution via CLAPs.

Opinion polls indicate that these measures have nevertheless done little to restore the government’s popularity, which remains at historic lows for chavismo, while the opposition continues to gain support even in former government strongholds.[fn]Crisis Group interview, opinion poll expert, 24 November 2016.Hide Footnote However, widespread rejection of the government appears not to translate into a collective determination to topple it through mass mobilisation. Public energies have instead been directed first and foremost to putting food on the table, above all through black market income earned via second jobs or hawking goods. A recent study found that 36 per cent of Venezuelans have been forced to sell personal possessions to make ends meet.[fn]Mariana Zuñiga and Nick Miroff, “In a hungry Venezuela, buying too much food can get you arrested”, The Washington Post, 15 September 2016. Blanca Vera Azaf, “Dólar paralelo dispara por alza del gasto público y recorte en entrega de divisas, El Nacional, 30 November 2016.Hide Footnote

III. Key Players

It is hard to understand the dynamics of the Venezuelan crisis without a grasp of the internal divisions on both sides of the political divide. Neither the government nor the opposition alliance is a homogeneous bloc. Even within some of the MUD member parties there are significant factional differences that can affect the behaviour of the coalition as a whole. Within the government, disputes over management of the economy in particular have led to policy paralysis, while the opposition is pulled in what sometimes appear to be diametrically opposed directions by what are often described as “moderate” (pro-dialogue) and “radical” (more confrontational) forces. This section provides an approximate guide to some of the rifts and factions that steer government and opposition strategy, though with regard to the government, there is a dearth of verifiable information that would permit a more accurate mapping of alliances.

A. Political Factions

The MUD is a heterogeneous coalition, currently of 21 parties. It has a solid record as an electoral alliance but great difficulty maintaining unity at other times. No one party has the strength to impose its strategy, and rival leaders with presidential ambitions complicate cohesion enormously.[fn]Four potential candidates lead the opinion polls: Henrique Capriles (PJ), Leopoldo López (VP), Henri Falcón (Avanzada Progresista) and Henry Ramos Allup (AD).Hide Footnote Day-to-day decisions are taken by the G4, the four biggest opposition parties in parliament. In order of size, these are Primero Justicia (PJ, 33 seats), Acción Democrática (AD, 26), Un Nuevo Tiempo (UNT, 20) and Voluntad Popular (VP, 15). Of these, VP – which led the La Salida street protests in 2014 and whose leader, Leopoldo López, is serving a fourteen-year jail sentence for instigating them – is most inclined to direct action and least convinced by the current talks.[fn]The other main leaders of “La Salida” (“the way out”) were Antonio Ledezma (Alianza Bravo Pueblo), mayor of Greater Caracas (currently under house arrest), and María Corina Machado (Vente Venezuela). For an account of this period, see Crisis Group Latin America Briefing, Venezuela: Tipping Point, op. cit.Hide Footnote UNT is most consistently pro-dialogue, along with Avanzada Progresista, led by the governor of Lara state, Henri Falcón.[fn]Though Falcón’s small party does not belong to the G4, his status as a national figure and consistent, pro-dialogue stance afford him influence in the talks.Hide Footnote PJ generally is pro-dialogue, but Capriles (twice the MUD’s presidential candidate and currently PJ governor of the important state of Miranda) has shown impatience with the talks and even spoken of a march on the presidential palace.

The remaining member parties, of which Vente Venezuela, led by former National Assembly member María Corina Machado, is the most vocal,have formed a common front to demand greater participation and criticise conduct of the dialogue. On 11 November, they published an open letter to the Vatican accusing the government of using the talks to placate dissent and demanding the referendum. Civil society has also demanded a role and criticised the MUD’s performance.[fn]“Grupo de 15 partidos de la MUD agradece intercesión del Vaticano en el dialogo”, 2001, 12 November 2016. “Una Propuesta Ciudadana”, Pronunciamiento de la Sociedad Civil, 22 November 2016.Hide Footnote

The only large government party is the PSUV, founded in 2008 by Chávez. A number of smaller parties, including the Partido Comunista de Venezuela (PCV), are allied with it in the Gran Polo Patriótico (GPP). Like the small opposition parties, they complain they are not taken into account. The PCV has spoken of danger the dialogue may lead to a “new pact [between] elites”.[fn]“PCV alerta que dialogo puede ser nuevo pacto de las élites”, Tribuna Popular, 11 November 2016.Hide Footnote Dissident former PSUV members in the Marea Socialista movement similarly argue that the dialogue is a ploy to restore a two-party duopoly.[fn]Crisis Group interview, member of Marea Socialista, 24 November 2016.Hide Footnote The PSUV itself, which in effect has civilian and military wings (despite a constitutional ban on participation of active military in politics), is regarded by most analysts as split into factions, though precise membership and views are matters of dispute. At least until 10 January 2017, outward support by all chavismo factions for President Maduro is a sine qua non, since his earlier departure would trigger an immediate presidential election and near-inevitable defeat of the regime as a whole. This has tended to obscure differences among the factions and the ambitions of their leaders.

Diosdado Cabello, an army captain, former president of the National Assembly and PSUV vice president, takes a very hard line. Passed over by Chávez in favour of Maduro as his successor, he has support from some elements of the military and considerable power.[fn]For an account of how the various government factions divided power after Maduro took office, see Gloria Bastidas, “El Mapa del Poder de las tribus chavistas, Konzapata.com, 4 June 2014.Hide Footnote His brother, José David, heads the internal revenue service, SENIAT.

A number of senior military officers are blacklisted by the U.S. for alleged links with drug trafficking and other forms of organised crime. This is a complicating factor for any potential transition, since, facing a possibility of imprisonment if they were to lose power, they might have little incentive to allow a change of government and possess the means to frustrate it.[fn]General Néstor Reverol, National Guard commander and former head of the anti-drugs agency, whose bid for the defence ministry was frustrated earlier in 2016, when General-in-Chief Vladimir Padrino López was reappointed, was appointed interior minister immediately after being indicted on drug charges by a U.S. court. “Maduro promotes Venezuelan general indicted on drug charges in US, The Guardian, 3 August 2016. “Former top leaders of Venezuela’s anti-narcotics agency indicted for trafficking drugs to the United States”, The United States Attorney’s Office Eastern District of New York, 1 August 2016.Hide Footnote

B. The Security Forces and Pro-Government Paramilitaries

For most of its history, Venezuela has been ruled by military regimes. There have been frequent coups and coup attempts (most recently in 2002 and 1992). President Chávez (1999-2013) described his government as a “civilian-military alliance” and under Maduro, his chosen successor, the military presence has increased. In December 2015, Maduro said the time had come for the military to “return to the barracks”, but the reverse has happened.[fn]Franz von Bergen, Militares controlan más ministerios con Maduro que con Chávez”, El Nacional, 25 October 2015. Following Chávez’s death, the “Political-Military Command of the Revolution”, which has no constitutional status and whose precise composition has remained unclear, emerged as the apparent embodiment of a new, collegial authority within the “revolution”. Sofía Nederr, “Ordenan que militares en cargos públicos regresen a los cuarteles”, El Nacional, 12 December 2015.Hide Footnote A 10 February presidential decree created Camimpeg, a military corporation with the right to operate in mining, petroleum and gas. On 9 July, Maduro created the Socialist Military Economic Zone, adding six more companies, in fields as diverse as finance and construction. The armed forces also control a bank, television and radio stations, agribusinesses, a transport company and a vehicle assembly plant.

For over two years, the defence minister, General Padrino López, has also been operational commander of the Armed Forces (FANB). On 11 July, he was appointed to head a newly created “Grand Mission of Sovereign Supply” that gave the military unprecedented control of food supplies, just as food riots were threatening to spin out of control. His longevity in a powerful position suggests he has the backing of a majority of the senior officers, at least in the army, the most important of the FANB’s four components. But he must retire from active service in 2017.[fn]The four components are Army, Navy, Air Force, National Guard. The fifth, the Boliviarian Militia, whose commanding general reports directly to the president, has no constitutional status. Padrino López was to retire in July 2016 but was unexpectedly extended. Pedro Pablo Peñaloza, “Padrino López el superministro militar del gobierno de Maduro”, Univision, 13 July 2016.Hide Footnote It is unclear who might replace him and whether the two posts will continue to be held by the same person or Padrino López might stay on in some role. The armed forces are likely to play a decisive role in determining whether Maduro is replaced, and if so by whom. But their opinions, individually and collectively, are nearly impossible to determine from the outside.[fn]Crisis Group interview, defence and security specialist, Caracas, 21 November 2016.Hide Footnote What is clear is that an elite group at the top of the FANB has a powerful interest in controlling any transition to preserve its interests, including business stakes and their institution’s integrity.

If popular unrest and/or politically-led street protests were to threaten regime survival, overwhelming National Guard and police riot squad capacity to contain them, the army would be the last line of defence. Its units have been trained in riot control, and rules of engagement allow use of deadly force against demonstrators under certain circumstances. Abundant riot control material is reported to have been purchased from China over the past year.[fn]Juan Manuel Rafalli, “5 claves para entender la Resolución No. 008610 del Ministerio de la Defensa”, Prodavinci, 30 January 2015. Crisis Group interview, defence and security specialist, Caracas, 21 November 2016.Hide Footnote But many defence experts doubt the willingness of the army as a whole to fire on unarmed crowds.

That task would probably fall, in the first instance, to what are usually called the “collectives”, armed chavista civilians, often on motorcycles, whose subordination to the government is deniable and who have shown few scruples.[fn]For a more detailed description of the origins and nature of the “collectives”, see Crisis Group Latin America Report N°38, Violence and Politics in Venezuela, 17 August 2011. Hide Footnote Half a dozen such groups, openly displaying military weaponry, are based in the immediate vicinity of the presidential palace. Though their deployment in Caracas is mostly restricted to the poor barrios west of the palace, with occasional forays against the opposition, they have frequently attacked opposition demonstrations elsewhere in Venezuela. On 26 October, when a mass march in the capital passed off peacefully, government paramilitaries attacked similar marches in at least five cities. Four demonstrators were reported shot and injured in Maracaibo. The National Bolivarian Militia, a military force created in 2007 that answers to the president and has a national presence, could conceivably also be deployed to control opposition protests.

Concern over violent repression has grown in the wake of mounting evidence of massacres and other security force abuse, particularly in joint operations against suspected criminal groups. “Operations to Liberate and Protect the People” (OLPs) began in 2015 in response to proliferation of “mega-bandas” with dozens, even hundreds of heavily armed criminals controlling swathes of the countryside or entire urban barrios. According to the government, they are not simply manifestations of organised crime, but part of a war waged by the opposition and its foreign allies.[fn]Crisis Group interview, citizen security expert, 25 November 2016. “Operación Liberación y Protección del Pueblo: análisis de fondo”, Misión Verdad, 15 July 2015.Hide Footnote The OLPs, a human rights advocate said, use the “logic of war”.[fn]Inti Rodríguez, coordinator, PROVEA, Unión Radio, 30 November 2016.Hide Footnote They draw on combined military and police units, heavily armed and with armoured vehicles. According to the Venezuelan human rights organisation PROVEA, 850 people have been killed in OLPs and 18,000 homes raided without warrants. The government also has a policy of evicting from public housing projects families, almost 1,500 reportedly to date, whose members are suspected of criminal activity.[fn]See “Unchecked Power: police and military raids on poor and immigrant neighbourhoods in Venezuela”, PROVEA and Human Rights Watch, April 2016. On 27 July 2015, Maduro said, “anyone using their Misión Vivienda house for robberies, black-marketeering or drug trafficking, I will take it off them”.Hide Footnote

In November 2016, eleven soldiers, including a lieutenant colonel, were accused of killing and dismembering more than a dozen youths in the Barlovento region of Miranda state during an OLP.[fn]“¿Que pasó en Barlovento? La masacre. Las víctimas. Las reacciones,” Prodavinci, 28 November 2016. “Antillano: ‘El gobierno está secuestrado por los cuerpos de seguridad’”, Supuesto Negado, 1 December 2016. By mid-December, twelve members of the army had been charged by state prosecutors with involvement in the massacre.Hide Footnote The bodies were found in mass graves, and at least five more possible victims were missing, the government ombudsman said. The killings came not long after nine fishermen were murdered in Cariaco, Sucre state, in a massacre attributed to the National Guard.[fn]Ronny Rodríguez Rosas, “Van cinco personas detenidas por vinculación con la masacre de Cariaco”, Efecto Cocuyo, 24 November 2016.Hide Footnote Killings on this scale are largely a consequence of the militarisation of policing and the impunity that comes with identification between government and security forces. In September, the Bolivarian National Police (PNB) was “restructured” and given a military-style uniform, blue, urban camouflage, with a red beret (a chavismo emblem). The PNB head and interior minister to whom he is answerable are military officers. Maduro said the task of this “socialist” police is to “combat the anti-values inculcated by capitalism”. The paper mechanisms to exert civilian, democratic control over security forces have been dismantled.[fn]Marcos Tarre Briceño, “Corrupción policial en Venezuela”, El Nacional, 1 May 2016.Hide Footnote

C. The Private Sector

When Chávez was briefly ousted in April 2002, the main employers’ confederation, Fedecámaras, played an important role. Its then chairman, Pedro Carmona, swore himself in as de facto president, with the backing of some generals. Already extremely strained, government-private sector relations have been openly hostile ever since, despite occasional dialogue. The government insists its economic problems are due to an “economic war” waged by private capital in alliance with the MUD and foreign allies, especially the U.S.. But today’s Fedecámaras eschews political involvement as far as possible. Business leaders avoid public comment on political issues. The biggest private corporation, Empresas Polar, which produces many staple food items, has been harassed. Its chairman, Lorenzo Mendoza, was recently prevented from leaving the country, threatened with jail and had the intelligence agency, SEBIN, on his doorstep for several days. Maduro said, without presenting evidence, that Mendoza wants to be president.[fn]“Maduro arremetió contra Lorenzo Mendoza”, El Nacional, 11 August 2015.Hide Footnote

One of the most effective government weapons has been the exchange controls in effect since 2003. Though originally introduced to curb capital flight after a slump in international reserves caused by the opposition’s lock-out of the oil industry, they have been retained for political reasons, as Vice President Aristóbulo Istúriz has acknowledged. “If we lift exchange controls they’ll overthrow us”, he said.[fn]“Aristóbulo Istúriz: El control de cambio en Venezuela es una medida política, no económica”, El Nacional, 11 October 2016.Hide Footnote The government has a near-monopoly on foreign currency, which it dispenses with a total lack of transparency.[fn]This has led to major corruption. Central Bank chair Edmée Betancourt said in 2013 that some $20 billion had been embezzled in foreign exchange fraud in 2012. She was fired almost immediately after the statement; no public investigation was made. Presidenta del BCV: Parte de los $59.000 millones entregados en 2012 fueron a ‘empresas de maletín’”, aporrea.org, 24 May 2013.Hide Footnote There are two official exchange rates: the Dipro rate for food, medicines and other essential goods (Bs 10:$1) and a variable rate known as Dicom or Simadi (Bs 665:$1 in mid-December) for everything else. There is no publicly available information on who receives hard currency or the criteria by which it is assigned. Private businesses say they are forced to deal with intermediaries with access to the subsidised rates in order to purchase any imported item. The intermediaries charge at the parallel rate, now around Bs 4,000:$1.[fn]Crisis Group interview, manufacturing business representative, Caracas, 24 November 2016.Hide Footnote

The number of private companies has shrunk dramatically since Chávez came to power in 1999. The industrial employers federation, Conindustria, estimates that some 8,000 manufacturing firms, around two thirds of the total, have closed since then.[fn]Luis Oberto, “Conindustria: 8,000 empresas han bajado sus santamarías”, El Nacional, 16 May 2016.Hide Footnote The government expropriated about four million hectares of farmland, as well as roughly 500 food agribusiness and food companies, most of which produce a fraction of what they used to. Thanks to price controls on food and other basic items, many companies are obliged to sell their output below cost, and the retail sector has also been hit hard. For a few months in 2016, companies were able to import food and sell it at market prices, but the sudden sharp rise in the “parallel” dollar rate in November put a brake on that trade, since companies could no longer calculate the replacement price of the goods they sold.[fn]Blanca Vera Azaf, “Dolár paralelo se dispara por alza del gasto público y recorte en entrega de divisas”, El Nacional, 30 November 2016.Hide Footnote

Without private sector help, it will be impossible for the government to resolve scarcity and inflation. Despite a plethora of initiatives under Maduro aimed at reaching agreement with business leaders, however, nothing concrete has emerged, and the underlying problems remain intact.

D. The International Community: Facilitators and Critics

At the height of the 2014 street clashes, government and opposition held short-lived talks promoted by the Union of South American Nations (UNASUR) and facilitated by the foreign ministers of Brazil, Colombia and Ecuador, as well as the papal nuncio in Caracas, Monsignor Aldo Giordano. Though the talks were fruitless, they established UNASUR and its secretary-general, Ernesto Samper, as potential facilitators in future Venezuelan conflicts, despite the misgivings of the MUD, which saw the organisation as a government ally. The government regarded the Organization of American States (OAS) as a colonialist relic beholden to the U.S.. Though its secretary-general, Luis Almagro, had received Venezuela’s support for his candidacy, he became an outspoken, voluble critic of Caracas, rendering his participation in any facilitation highly unlikely.

UNASUR was one of the few international organisations to accept the government’s restrictive terms for observing (“accompanying” in the official phrase) the 6 December 2015 legislative elections. Unable to reach consensus on a chief of delegation from within South America, it settled on Leonel Fernández, ex-president of the Dominican Republic. Also among the international observers were Spanish ex-Premier José Luis Rodríguez Zapatero and former Panamanian President Martín Torrijos. As the conflict heated up after the MUD’s victory, these three – led by the Spaniard – began to try to bring the sides together. On 19 May, the MUD met Zapatero in Caracas, and later that month the three facilitators met both sides in the Dominican Republic. After the government made this public, the MUD was forced to deny face-to-face talks. It issued a statement outlining three main demands: release of political prisoners and an end to political persecution; an end to the ban on international humanitarian aid; and respect for separation of powers.[fn]“MUD emite comunicado sobre reunión en República Dominicana para impulsar diálogo nacional, Noticia al Día, 28 May 2016. The MUD communiqué stressed that there was no contradiction between seeking dialogue and pursuing application of the Inter-American Democratic Charter at the OAS, saying that without international pressure, dialogue would be impossible. However, those within the MUD most keen on dialogue (and who initially contacted Zapatero) opposed application of the Charter; its most fervent supporters were the most sceptical of dialogue. Crisis Group interviews, leading opposition figures and political analysts, November 2016.Hide Footnote

Though contacts continued over succeeding months, and Zapatero shuttled between Madrid and Caracas, no substantive progress was made. Nonetheless, the Zapatero initiative was endorsed by most major international players, including the U.S. State Department, the OAS Permanent Council, the European Union (EU) and the Vatican. Attempts by OAS Secretary-General Almagro to insist on application of the Inter-American Democratic Charter did not prosper, but there were clear signs that the Maduro government’s standing in the region had sharply declined. The Mercosur trading bloc refused to allow Venezuela to assume its rotating presidency in June 2016, and in December its membership was suspended for failure to adapt its regulations to Mercosur norms.[fn]“El Mercosur suspende a Venezuela por incumplir los acuerdos de adhesión”, Agence France-Presse, 1 December 2016. Uruguay has resisted moves by the other three members (Argentina, Brazil and Paraguay)to call Venezuela to account under the terms of the Ushuaia protocol, which requires Mercosur members to adhere to democratic norms. The rather unsatisfactory result has been a suspension of Venezuelan membership that itself appears to flout the organisation’s rules.Hide Footnote In August, fifteen OAS member states signed a statement calling not only for dialogue, but also for the CNE to complete “without delay” the remaining stages of the recall referendum process.[fn]“Este es el comunicado firmado por 15 países miembros de la OEA sobre Venezuela y el revocatorio”, Prodavinci, 11 August 2016.Hide Footnote

Three key allies of Venezuela, two with seats on the UN Security Council, could potentially play a positive role but have declined, at least in public, to step forward. Vladimir Putin’s Russia, which has been a major arms supplier, has expressed support for the dialogue but warned of U.S. “interference”. In early December, Maduro announced that in 2017 Russia would supply “all the flour” Venezuela needed to overcome economic “sabotage”, as well as military equipment, including a missile defence system. The Chinese are primarily concerned about the $20 billion or so the government owes them and are likely to act pragmatically. Cuba has maintained “revolutionary solidarity” rhetoric, but as Venezuela’s ability to subsidise its energy consumption and provide hard cash declines, there is at least a chance it could contribute to a creative solution.

IV. Prospects for 2017

Venezuela began 2016 with hopes that the sweeping opposition victory in the December 2015 legislative elections might bring constructive negotiations between government and opposition, leading to a peaceful, democratic solution to the profound economic and social crisis. But the government’s decision to use its control of the courts and the electoral authority to render parliament impotent and block the MUD’s campaign for a recall referendum has exacerbated the authoritarian tendencies in government and the opposition’s indignation.

It is hard to predict precisely how this will play out in 2017, though some things are already clear. The economy is heading for hyperinflation and levels of scarcity that will overshadow those of 2016. A chaotic default on the international debt cannot be ruled out. On the political front, Maduro’s position will be weaker after 10 January since his departure, for whatever reason, could thereafter occur without causing the government to fall. This may lead to factional struggles, as groups within the regime compete to succeed him. The incoming Trump administration in the U.S. is an unknown quantity. The crucial symbiotic relationship between Havana and Caracas may undergo changes following Fidel Castro’s death. Both the UN and UNASUR will have new leadership.[fn]Samper lost support among member states as a result of changes of government in Argentina and Brazil particularly. In mid-2016, he announced he would not seek a second term as secretary general but would stay until early 2017 while a replacement was sought.Hide Footnote  If hardliners prevail, talks between government and opposition will break down, and violence and/or outright dictatorial rule will be more likely. Mutual moderation is essential, even when Venezuela’s polarisation and economic woes make it seem unlikely.

A. The Economy

In the month of November alone, the bolivar lost around two thirds of its value on the free market, dropping from Bs 1,501.17:$1 to over Bs 4,500:$1.[fn]Figures taken from the website DolarToday, whose figures are widely used for black market trading. The highest official rate is Bs 10:$1, the lowest Bs 665:$1.Hide Footnote The government has not published inflation figures since December 2015, but most economists agree the country is headed for hyperinflation.[fn]Roberto Deniz, “5 síntomas de que Venezuela tiene hiper-inflación”, Runrunes, 10 August 2016.Hide Footnote New banknotes, promised for mid-December, include a Bs 20,000 bill: the highest denomination previously in circulation – Bs 100 – was withdrawn at 72 hours’ notice. The measure, supposedly aimed at combating exchange “mafias”, caused chaos in an economy already acutely short of cash.[fn]“Rechazo e incertidumbre produce anuncio de sacar de circulación billetes de 10 bolivares”, Runrunes, 11 December 2016.Hide Footnote

The economy has been shrinking for ten quarters and, the International Monetary Fund says, is likely to contract a further 4.5 per cent in 2017.[fn]“World Economic Outlook”, International Monetary Fund, October 2016.Hide Footnote With domestic production of almost all basic goods failing to meet even the diminished demand of a deep recession, there is a pressing need for imports to cover the shortfall, especially in vital goods such as food and medicine. But Venezuela is roughly 96 per cent dependent on oil income to produce the hard currency required; the international price of its crude is 60 per cent below its $103.42/barrel 2012 average, and imports have shrunk accordingly. In May, Economy Minister Miguel Pérez Abad said $15 billion would be available for 2016 imports, compared with over $50 billion in 2012.[fn]A. Vargas, “Pérez Abad estimó importaciones no petroleras 2016 en apenas $15 millardos”, elcambur.com, 12 March 2016.Hide Footnote

Starting in 2004, Chávez raided Central Bank reserves to finance the public sector deficit, in violation of the constitution. In 2005, the government determined that it could skim off reserves in excess of what it determined was the “optimum level”, of $26.8 billion. By the end of October 2016, reserves were less than $11 billion, having fallen by around $5.5 billion since the beginning of the year. In addition to financing essential imports, the government needs more than $9 billion in 2017 to meet foreign debt repayments. A bond swap carried out in October to ease the pressure by extending payment deadlines had only limited success, at the cost of increasing the overall debt burden. Bond yields, financial analysts say, show the market sees default within five years as a 90 per cent probability.[fn]Sebastian Boyd and Nathan Crooks, “Venezuela’s PDVSA sows payment doubts while extending swap”, Bloomberg, 17 October 2016.Hide Footnote Perhaps the government’s biggest problem in 2017 is its need for hard currency. Even China, which has provided some $60 billion since 2007, is reluctant to keep bailing out a government that shows no sign of implementing urgently needed economic reforms and whose political viability is in question.[fn]Kejal Vyas, “China rethinks its alliance with reeling Venezuela”, The Wall Street Journal, 11 September 2016.Hide Footnote Moreover, the government cannot constitutionally incur debt without National Assembly approval. Though the TSJ ruled the 2017 budget legal without parliamentary authority, international courts would be unlikely to uphold creditors’ claims for repayment of unauthorised debt, reducing the attractiveness of Venezuelan bond offers.[fn]José Ignacio Hernández, “Que significa que la Sala Constitucional y no la Asamblea Nacional apruebe el presupuesto 2017?”, Prodavinci, 12 October 2016.Hide Footnote This is a powerful factor favouring some kind of political deal in 2017.

B. The Social Emergency

Unlike many countries in the region which have experienced hyperinflation, Venezuela has no wage indexation system. Most employees earn the minimum wage, but according to an independent research group, fourteen minimum wages were needed in October to buy essential food for a family of five in Caracas. The cost had risen by 632 per cent in a year. On the basis of the black market exchange rate, the monthly minimum wage is worth just over $6.[fn]“Reporte Mensual ‘Canasta Básica de Alimentos, Bienes y Servicios’ Oct 2016”, Centro de Documentación y Análisis para los Trabajadores (CENDA), 30 November 2016. The latest minimum monthly wage increase, to Bs 27,091, ($6.37 at black-market rate on 10 December) was decreed by President Maduro on 27 October. Additional food vouchers worth Bs 63,720 ($14.98 at black-market rate on 10 December) are paid to adults of working age.Hide Footnote In the capital and around the country, the sight of people foraging for food in rubbish bags is common. Hunger has increased dramatically. Deaths from malnutrition, unacknowledged by the government, are increasing among both children and adults. Between January and May 2016, those suffering malnutrition rose from 13.4 per cent to 25 per cent of the population, according to a nutrition expert from the Fundación Bengoa.[fn]According to Professor Luis Pedro España of the Poverty Project at the Catholic University (UCAB) in Caracas, 8 per cent of Venezuelans admit to scavenging for food waste. Daniel Pardo, “Cuánta hambre hay realmente en la Venezuela de la ‘crisis alimentaria’?”, BBC Mundo, 21 April 2016. Mariel Lozada, “Victimas del hambre: desnutrición infantil ha cobrado tres vidas” and “Desnutrición, escasez y fallas de estructura amenazan a la niñez”, Efecto Cocuyo, 26 August and 29 November 2016. Sabrina D’Amore, “Desnutrición aumentó 12% en cinco meses a causa de la inflación y la escasez”, Runrunes, 30 June 2016.Hide Footnote

But the social emergency is by no means solely a question of hunger and physical hardship. An unknown number of people have died for lack of essential medicines, equipment or medical services. The public health service is close to collapse.[fn]In June 2016, the president of the Pharmaceutical Federation of Venezuela said 85 per cent of medicines that ought to be available at pharmacies were either absent or hard to find. A survey by doctors found that more than three-fourths of public hospitals lacked basic medicines. Nicholas Casey, “Dying infants and no medicines: inside Venezuela’s failing hospitals”, The New York Times, 15 May 2016.Hide Footnote Diseases that had been eradicated or brought under control are returning as epidemics. The government, however, denies there is a crisis and threatens or punishes those who protest. A Human Rights Watch report found that maternal mortality in the first five months of 2016 was 79 per cent higher than in the same period of 2009, the last for which official figures were available. Infant mortality was up 45 per cent over 2013. Medical staff were reportedly threatened with dismissal if they spoke out, while ordinary citizens who protested were liable to be beaten, arrested and even tried by military courts.[fn]Among the latest diseases to reappear is diphtheria: José Poito, “Brote de difteria se ha expandido por seis estados en dos meses”, Notiminuto, 30 November 2016. The government has not published a monthly epidemiological bulletin since late 2014. Foreign Minister Delcy Rodríguez told the OAS Permanent Council in June there was, “no humanitarian crisis [in Venezuela]”. The government has said claims of a humanitarian crisis and calls for international aid are a cover for foreign intervention. Maira Ferreira, “Delcy Rodríguez: En Venezuela no hay crisis humanitaria, El Universal, 23 June 2016. “Humanitarian crisis in Venezuela: severe medical and food shortages, inadequate and repressive government response”, Human Rights Watch, 24 October 2016.Hide Footnote Those who have tried to bring in medical aid from abroad have found it blocked by the government. The authorities seized in November a shipment of medicines and food supplements belonging to the Catholic charity Caritas that had arrived in August from Chile. Customs said Caritas had failed to supply the appropriate documentation. Caritas and the Catholic Church denied this and called for humanitarian aid to be addressed at the talks between government and opposition. On 30 November, a doctor and a worker at the Magallanes de Catia hospital in Caracas were arrested by SEBIN agents after accepting a donation of medical supplies from an organisation led by the wife of political prisoner Leopoldo López.[fn]Communiqué, Justice and Peace Commission of the Catholic Bishops’ Conference and Caritas Venezuela, 25 November 2016. Diego A. Torrealba, “Sebin detuvo a médico y sindicalista en Hospital de los Magallanes de Catia por recibir donación de insumos médicos”, El Pitazo, 1 December 2016.Hide Footnote

C. Chavismo post-10 January

Thanks to Article 233 of the constitution, the post of vice president becomes particularly attractive to ambitious politicians at the onset of the fifth year of a presidential term. Unlike many countries with a presidential system, Venezuela does not elect vice presidents: they are appointed like ordinary cabinet members. If the president dies, resigns or is removed from office during the last two years of the six-year term, the vice president serves out the term and is in a good position to seek election to the presidency in his or her own right.

There have already been thinly veiled displays of interest in the post by some leading figures. On 29 September, the governor of Carabobo state, Francisco Ameliach, suggested Maduro might name Diosdado Cabello to the post, though he framed it as a means of discouraging the opposition from pursuing a recall referendum beyond 10 January.[fn]“Maduro nombraría a Diosdado Cabello vicepresidente”, El Nacional, 4 October 2016.Hide Footnote The next day, National Assembly member and former Vice President Elías Jaua, a member of Maduro’s inner circle, told an Ecuadorean news agency the leadership backed the president for re-election, a statement taken as a riposte to Cabello and Ameliach.[fn]Eligio Damas, “Elías Jaua vuelve a confrontar a Diosdado, esta vez por la candidatura, aporrea.org, 30 September 2016. Jaua belongs to the chavista movement’s radical civilian left, which is often at odds with the military wing. He is close to the Frente Francisco de Miranda, a Cuban-trained, armed organisation said to number 20,000 militants around the country.Hide Footnote A few days later, Maduro used his weekly television program (“Contact with Maduro”) to endorse the current vice president, Aristóbulo Istúriz, another civilian leftist. In somewhat ambiguous terms, he spoke of handing Istúriz the responsibility Chávez had given him before his death.[fn]“Nicolás Maduro pone su confianza en Aristóbulo Istúriz”, Notitarde, 5 October 2016.Hide Footnote

Cabello embarked on an intensive tour in mid-2016 that took him to almost every state (and many military barracks), leading some commentators to suggest he was campaigning for the presidency. But polls indicate his hardline message and abrasive personality are not popular.[fn]Cabello’s weekly television show, “Con el mazo dando, translates literally as “hitting with the club”.Hide Footnote Both Maduro and Jaua, as well as Aragua state governor Tareck el Aissami – another figure rumoured to have presidential ambitions – have better numbers.[fn]See, for example, the Venebarómetro poll, July 2016, in which three quarters of respondents said they did not trust Cabello: Luz Mely Reyes, “Cinco datos de la encuesta de Venebarómetro para tomar en cuenta, Efecto Cocuyo, 24 July 2016.Hide Footnote That all potential PSUV replacements are either as unpopular as Maduro or more so may discourage those who might seek to replace him. Anyone aspiring to the job will also require, at a minimum, acquiescence of the armed forces. Many officers who graduated with Cabello and took part with him in Chávez’s 1992 failed coup attempt are now senior generals, but he cannot count on majority support in the barracks. Unlike Chávez, Maduro has not been able to exert full authority over the FANB’s factions, but, with the possible exception of the current defence minister, nor has anyone else.[fn]Crisis Group interview, security and defence expert, Caracas, 21 November 2016.Hide Footnote

D. Prospects for a Negotiated Solution

The current set-up for talks between government and opposition, under Vatican and UNASUR auspices, seems unlikely to prosper. The next plenary is set for 13 January, but the MUD did not attend the last, on 6 December, and has said it will not participate until the government fulfils its commitments.[fn]“Si el régimen no cumple, MUD no asistirá al diálogo el 6D”, communiqué, MUD, 2 December 2016.Hide Footnote Its position was strengthened by the leak of a 2 December letter to Maduro from Cardinal Parolin in which the Vatican expressed “pain and concern” over lack of progress in the talks and “demanded” fulfilment of four agreements: measures to address the humanitarian crisis; establishment of an electoral timetable; restoration of the National Assembly’s authority; and release of political prisoners.[fn]Emiliana Duarte, Parolin’s letter”, Caracas Chronicles, 7 December 2016.Hide Footnote The government responded with a public letter from Jorge Rodríguez rejecting the demands, accusing Parolin of violating the terms of the facilitation mission and ruling out any change in the electoral calendar.[fn]Christhian Colina, “Guerra de cartas: Rodríguez arremetió contra la iglesia por críticas al diálogo”, Caraota Digital, 9 December 2016.Hide Footnote

There are elements within the MUD that would be willing to wait for scheduled elections in December 2018 rather than serve out the last two years of Maduro’s term then to face an electorate that might well be frustrated at the slow pace of change.[fn]Crisis Group interview, political analyst, 21 November 2016.Hide Footnote But it is politically impossible to say so publicly, given the desperation many supporters feel for an immediate change of government.

Neither side has formally abandoned the talks, however, and whichever did so first would pay a political price, particularly due to the presence of the Vatican, with its considerable moral authority. Especially the MUD, which put such weight on the intervention of Pope Francis, may take seriously the threat that if talks break down and the Vatican departs, it will not easily be persuaded to return. The MUD’s problem, however, is how to defend participation in talks that have produced virtually no tangible results, aside from release of seven opposition prisoners, against the public resistance of vocal elements of its coalition. If the dialogue can somehow be kept going, or revived if it breaks down, the most decisive factor is likely to become the economic and financial crisis to which there is no prospect of a solution without an agreement. Awareness of its likely consequences – chaotic default, social explosion, military coup or a combination of all three – may finally concentrate the negotiators’ minds.

V. Conclusion

Venezuela urgently needs a solution to a crisis that has exacerbated political polarisation and harmed the livelihoods and well-being of a majority of its citizens. The Maduro government has provided little more than palliatives: millions do not have enough to eat, while thousands are dying needlessly because of shortages of medicines and basic health care. The government’s deep unpopularity resulted in a sweeping victory for the opposition coalition in parliamentary elections a year ago, but rather than heeding the electorate’s voice, the government declined to seek the middle ground. It chose to nullify the result by erecting institutional, at times physical barriers around the National Assembly, hardened its revolutionary discourse and rode roughshod over legal and constitutional norms in a bid to regain lost hegemony.

The opposition responded by seeking a recall referendum against the president and an early change of government. Once again Maduro wielded his institutional control, delaying, blocking and ultimately suspending the referendum campaign, despite clear evidence that it represented the will of the majority. The recall referendum was far from an ideal solution: an early presidential election leading to a sudden change of government would have had severe risks of instability given chavismo’s control of the oil industry, state apparatus, economy and armed forces. But it was constitutional, democratic and potentially the least worst option.

Many now look to the 2018 presidential election. With two years of his term remaining, however, President Maduro and his ministers look incapable of averting economic collapse and an even more profound humanitarian crisis. Though a classic military coup seems unlikely, there is a strong possibility that the armed forces will gradually assert greater control. To restore the rule of law and prevent further suffering, an agreement with the opposition is essential and can only be obtained with international assistance. Ideally, an interim government representing both sides would implement urgent economic reforms and restore the independence and professionalism of the judiciary and the electoral authority so as to ensure a free and fair 2018 election. The facilitation process led by the Vatican and UNASUR is a start, but to succeed a more robust structure featuring international verification procedures for agreements, as well as input from civil society and external technical expertise, will be needed.

Caracas/Bogotá/Brussels, 16 December 2016

Appendix A: Map of Venezuela

Map of Venezuela. CRISIS GROUP