Colombia: Aunt Celia

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August 8, 2016: The peace deal with the FARC rebels has been finalized with an August 5 th agreement on the procedure and timetable for the assembly, disarming and housing of FARC members. Before the disarmament begins a national referendum on the peace agreement must be held. Opinion polls indicate that a majority of voters would approve the deal. The date of the vote has will soon be announced because the courts already approved the referendum conditions on July 18th. The vote is expected before the end of the year.

Colombia continues to have one of the most robust economy in South America, seeing its economy growth continue in 2015 despite the low oil prices. Fortunately for Colombia oil only accounted for 7.8 percent of GDP when oil prices began to collapse in 2013. But the continued low price of oil has hurt and GDP growth is expected to be 2.5 percent for 2016 and then, in part because of peace with FARC, 3 percent in 2017. The low pol price has meant smaller government budgets at a time when more must be spent to pay for the FARC peace deal. The demobilized FARC fighters have to be housed and retrained for the civilian economy. Rural areas FARC controlled or threatened for decades need billions a year for repairing or rebuilding missing infrastructure (roads, electric power, schools and so on). Peace isn’t cheap.

Venezuela

Neighboring Venezuela is a potential problem for Colombia because of economic collapse. Colombia is facing a flood of illegal (because Venezuela has closed its borders) migrants from Venezuela, where GDP fell 6.2 percent in 2015, at least ten percent for 2016 and potential economic and social collapse in 2017. Currently annual inflation is 700 percent and rising and food shortages are so bad that more and more people, especially young children, are visibly starving and Venezuelans spend most of their time seeking food. The government solution is to set up rural work camps where people will be forced to spend some of their time farming on farms that are idle because of government policies (high prices for farming supplies and price controls on crops produced). It is unclear how the government is going to obtain the farming equipment and supplies needed. Meanwhile the government refuses to call for international aid and uses it clout in the UN to keep the “Venezuelan crises” off the agenda. The government insists there is no crises and that the current leadership can make it all better.

The Venezuelan economy is a mess largely because there has been 17 years of disastrous misrule. Then there is the major external problem. In Venezuela oil income was 23.8 percent of GDP in 2013 and has not been able to adapt to falling oil prices. Colombia has adapted more effectively because it has a diversified and free-market economy while Venezuela does not. That is typical of many countries with a lot of oil income and it often turns out to be a curse. Like now, where the low oil prices are a minor problem for Colombia. Venezuela’s GDP is declining at nearly 10 percent a year and getting worse. In 2016 oil accounts for over 90 percent of Venezuelan exports. In 1999 oil only accounted for half of exports but then a new socialist government took over in 1999 and wrecked the economy in an attempt to keep itself in power. That effort has failed in a spectacular fashion. In Colombia recent arrivals from Venezuela report that the rich are buying portable electricity generators because public utilities like electrical and water supply are collapsing. Medical care is increasingly unavailable because of these shortages plus the inability to import medical supplies. More and more doctors and nurses are leaving the country.

In late 2015 parliamentary elections in Venezuela gave an opposition coalition a majority but the socialists who wrecked the economy still control the presidency, the courts and the military. That has created a stalemate that is being slowly broken by the continued decline of the economy. The non-socialist opposition got control of parliament on the promise of improving the economy. The socialists so far refuse to curb the practices that caused the economic collapse and imply that they will use force if anyone tries to oust them from power. So for the moment Colombians can only wait and hope that the situation in Venezuela resolves itself peacefully and soon.

While the Venezuelan government has been unable to prevent economic collapse and starvation it has succeeded in blocking efforts to legally replace the current president with one more capable of dealing with the economic problems. Since late 2015, when the opposition won a majority in Congress there have been efforts to remove president Maduro legally. The favored, and very popular effort, employs a legal (it’s in the constitution) recall referendum that would remove Maduro and allow new elections by the end of the year. Despite the obvious popularity of such a referendum the government seems intent on preventing the recall vote anyway it can. Maduro’s current term does not end until 2019 and Maduro wants until then to make things all better. Government incompetence and corruption are the main causes of all the economic woes but the government will not even discuss, much less admit their actions are a problem to be solved. Recent opinion polls indicate that 80 percent of the voters want to remove Maduro. The government has been unsuccessful in controlling the media, particularly the Internet. Most traditional mass media is under government control but most Venezuelans consider that media nothing but misleading propaganda.

One bit of news the government wants to keep out of Venezuela involves certain court proceedings in the United States. In late 2015 two nephews of the Venezuelan president were indicted in the United States for drug smuggling. The trial is now underway and details of the case are available. The two nephews were arrested in Haiti and extradited to the United States. They admitted they were working for FARC and using their government connections to move 800 kg (1.700 pounds) of Colombian cocaine to the United States via Venezuela, Honduras and Mexico. These two defendants are actually nephews of the president’s wife (Cilia Flores), whose family is infamous for having received so many high paying government jobs since her husband became president in 2013. Flores is a lawyer and politician and even before her husband became president she was known to be corrupt. Flores is aware that the daughter of former president Chavez managed to build a fortune worth over $4 billion after her father came to power in 1998. The Maduro clan is not likely to do nearly as well. The two nephews bragged that some of the drug profits would go to “Aunt Celia.” After they were arrested they insisted FARC owned the cocaine. Before that they said the cocaine was actually owned by two other senior Venezuelan politicians (the minority leader in the national legislature and the governor of Aragua state). Aunt Celia accuses the United States of kidnapping her nephews and wants them back. Meanwhile the United States has indicted several other Venezuelan government officials on drug charges.

August 2, 2016: Venezuela appointed an army general (Nestor Reverol) as the new Interior Minister. Reverol will now be in charge of the national police and maintaining order in the country. This comes a day after Reverol was indicted in the United States for taking bribes to protect cocaine smugglers. The Venezuelan government is replacing senior officials who oppose current government economic policies and often replace them with men are considered more loyal to the president.

July 28, 2016: Colombia won the Latin American football (soccer) championship (Copa Libertadores) for the first time since 2004. The celebrations got out of hand and four people died. Yet this was considered progress because such incidents of multiple unrest and deaths have become increasingly rare. The leftist rebels have been avoiding contact with the security forces, who are now spending more time going after drug gangs.

July 22, 2016: In Venezuela a presidential decree mandated that any working age citizen could be forced to work on a farm for 60 days (or longer) if needed. The government has turned the food production and distribution system over to the military but the generals are reluctant to try and force people to work on farms because the equipment and supplies needed to get anything done are generally lacking. The trade unions, which had long backed the 17 years of socialist government opposed the idea of forcing people to work on farms. Two other nations (Cuba and North Korea) have recently used this forced farm labor approach and it didn’t work for them either.

 

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