Venezuela: In search of a solution

Until this month, Angel Vivas was a little-known figure who had retired from Venezuela’s armed forces seven years ago after he refused orders from Hugo Chávez, the then president, to swear the Cuban-inspired oath: “Fatherland, Socialism or Death”.

Today the 57-year-old former general is a hero to many anti-government protesters. He regularly berates the Venezuelan government on Twitter for being a Cuban satrapy and supplying Havana with billions of dollars of subsidised oil.

Last month, President Nicolás Maduro ordered his arrest on national television because he had advised protesters to stretch wire across the streets to stop pro-government motorcycle gangs. With a semi-automatic rifle and pistol and wearing a flak jacket, Mr Vivas had climbed on to the roof of his Caracas house.

“I’m never going to surrender,” he shouted down to supporters who quickly saw off the “Cuban and Venezuelan henchmen”, as Mr Vivas described the security detail sent to arrest him. More than a week later, protesters maintain a protective vigil around his home and the number of Mr Vivas’s Twitter followers has soared to 240,000.

The stand-off encapsulates much of the drama that has engulfed Venezuela. At least 17 people have died in the most serious challenge to Mr Maduro’s government since he won presidential elections by a whisker last April following the death of Chávez, his charismatic predecessor.

More than anything, Mr Vivas’s moment has highlighted communist Cuba’s close ties with socialist Venezuela – often taken as a symbol by the opposition, and many in the US, of everything that is most wrong with modern Venezuela.

Urged on by the example of Ukraine, students and the more radical wing of the anti-government opposition have taken to the streets. Their complaints centre on government repression, media censorship and the chronically mismanaged economy bequeathed to Mr Maduro by Chávez.

Although Venezuela sits on the largest energy reserves in the world, lack of investment has seen oil production fall by almost a fifth over the past decade to 2.5m barrels a day, according to Bloomberg. Prices are rising at the almost hyperinflationary rate of 56 per cent a year. One in four basic goods is missing from supermarket shelves, while rationing cards – another Cuban reminder – are in use in some government shops.

Yet the value of the Venezuelan relationship to Cuba, whose centrally planned economy is kept afloat by Venezuelan oil, means that Havana has the most at stake in helping find a peaceful solution to a crisis that has brought parts of the country to a standstill.

“No other country is so well placed to mediate in Venezuela, except perhaps Brazil . . . and no other country has more to gain than Cuba,” says Peter Hakim of the Inter-American Dialogue think-tank.

Furthermore, mediation could enhance Cuba’s regional standing just as Venezuelan volatility prompts Havana to seek new allies – even to the extent of trying to mend fences with Washington. Such moves could radically redraw the region’s often divisive left-versus-right politics.

It may also be Venezuela’s best hope. Mr Maduro, a former bus driver, cuts a charmless profile in public and has struggled to resolve the bitter factional infighting of the ruling socialist party. He has so far rebuffed other countries’ attempts at mediation, in part as it would be seen as a sign of weakness.

US efforts were taken as examples of imperial interference and prompted Venezuela to expel three American diplomats, although Caracas said it still wanted to maintain “high level relations with the US”.

Chile and Colombia, both US allies, have urged dialogue, but even their mild remarks received an angry response. Regional groups such as the Union of South American Nations have issued only tepid declarations on the need for both sides to find a non-violent solution. Pope Francis and Ban Ki-moon, UN secretary-general, have called for an end to violence.

Nonetheless, Luiz Inácio Lula da Silva, the former Brazilian president, was in Cuba last week touring Brazilian investments on the island and holding talks with Raúl Castro, Cuba’s president, with the Venezuelan crisis high on the agenda. As Stratfor, the risk consultancy, said in note to clients on Thursday, this “diplomatic initiative bears close attention”.

Potentially at stake for both Cuba and Venezuela is a relationship so close that Chávez, an ardent admirer of Fidel Castro, once suggested the two countries be renamed “Venecuba”. Western security officials add that Mr Maduro also fell under the Cubans’ spell when he travelled to the island as a teenager for training in union organisation.

The commercial importance of the relationship to Cuba is such that the oil-for-doctors programme, under which Caracas sends 115,000b/d to Havana in return for 30,000 doctors, accounts for 40 per cent of total Cuban trade. It provides Havana with an implicit subsidy worth $2.7bn a year, according to a recent paper by Pavel Vidal, a former Cuban central bank official now at Javeriana University in Cali, Colombia.

Its loss could shrink the Cuban economy by up to 8 per cent, calculates Mr Vidal. Although a fraction of the 35 per cent fall Cuba suffered after the collapse of the Soviet Union, the Cuban economy is far weaker now. State salaries are worth a third of their levels in 1989, so the pain will be felt more keenly.

“After the sickness and subsequent death of President Hugo Chávez, the risks and consequences of a possible collapse in relations have to be put on the table,” wrote Mr Pavel.

At risk for Venezuela is a medical programme in the slums led by Cuban doctors – imported, like so much else in Venezuela – that helps maintain the government’s popularity. Cuban officials also provide security and intelligence to an administration better known for incompetence and corruption. “The Cubans are different,” says Professor John Kirk, a Cuban health expert at Dalhousie University in Canada. “The manner in which they treat their patients . . . the austere conditions under which they live . . . are all very different from their Venezuelan counterparts.”

The importance that both countries attach to this mutual relationship was on show last month when Mr Castro closed a speech with stirring words about Cuba’s continued support for Venezuela. Two days earlier, Rafael Ramírez, Venezuela’s oil and economy minister, pledged continued mutual support. “Our ties are only going to get closer,” he said.

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Increasingly, however, that does not seem to be the case, which is another reason why it is in Cuba’s interest to play a constructive role. Venezuela’s economic pro­blems, now making themselves ap­parent as the black market exchange rate soars to 14 times the official rate, have prompted Cuba to seek new markets for its medical diplomacy.

For some analysts, this opens the possibility of driving a wedge between Caracas and Havana, which could reshape regional geopolitics. Cuba is already playing an important role facilitating peace talks in Havana between the Colombian government and Farc guerrillas.

“The Cubans have always known Venezuela would be a reckless partner . . . they are already seeking new partners,” says Christopher Sabatini, senior policy analyst at the Americas Society/Council of the Americas.

Brazil hired 6,000 Cuban medics in 2013 with another 4,000 expected this year. As usual, Brasília pays the Cuban government for the services, which pays the doctors a smaller sum and pockets the difference.

In recent agreements with Ecuador and some African states such as Angola, Cuba has found employment for around 12,000 medics, about a third of the number in Venezuela.

Simultaneously, Venezuela’s sagging oil output appears to have prompted cutbacks. Last month, Mr Ramirez told reporters that exports to Cuba had dropped to 70,000b/d.

No other country is so well placed to mediate in Venezuela and no other country has more to gain than Cuba

Venezuela’s problems are “precisely why Cuba has tried – in its own prickly, nationalistic way – to open the door to the US, and why the US needs to move forward rapidly with its rapprochement [to Cuba]”, argues Mr Sabatini. “If the US can ease the sense of insecurity that’s guiding Cuban actions in Venezuela, they will be in a better place to cool the Venezuelan situation and to play a constructive role in the processes of change in Cuba, too.”

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The prospect of Cuba helping to deliver a peaceful solution in a Venezuela that is split between pro and anti-government forces seems improbable, especially as Havana is better know for suppressing dissent than fostering dialogue. On Tuesday a group of protesters marched on the Cuban embassy in Caracas chanting “I don’t want a dictatorship like Cuba’s”.

Both sides stress the need for dialogue and peaceful protest, yet still see each other as adversaries to be pummeled into the ground rather than opponents to be reasoned with. When government supporters, for example, say the opposition is trying to provoke a coup, and denounce the protesters as “unconstitutional”, the opposition points out that the government celebrates Chávez’s own coup attempt in 1992.

Nonetheless, the incentives for a negotiated solution are there. There is little sign that the government is about to fall. It still enjoys solid support among the poor, controls the oil industry, the judiciary, the army and much of the media. But it is not invulnerable. There are schisms within its ranks, and the deteriorating economy drains popular support.

Mr Hakim suggests that in a negotiated settlement the government will need to disband armed militia groups, release those imprisoned for taking part in street protests, loosen restrictions on the media and allow greater measures of free political activity. What it would gain in return is an “end to turmoil in the streets and the opportunity to govern”.

The opposition would have to give up any aspirations of ousting Mr Maduro and wait two years for a recall referendum. In return, it would “gain greater security and some of the room it needs to carry out its political activities”, says Mr Hakim.

General disorder further complicates the possibility of fruitful dialogue. Neither the government nor the more moderate figures in the opposition, such as Henrique Capriles, the former presidential candidate, fully control their more radical wings.

Still, Cuba has a strong incentive to push the government to try. That is especially so as Cuban medics train Venezuelan doctors to take their place, and the oil-for-doctors programme runs down, forcing Havana to find new sources of revenue and curry new friends.

As Mr Maduro commented ruefully at a gradation ceremony for 6,000 Venezuelan doctors last March: “In about six years, our Cuban brothers will begin to go.”

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Troubled times: life after Chávez

March 5 2013
Hugo Chávez passes away aged 58 after a two-year battle with cancer, putting an end to the anti-capitalist leader’s 14-year rule.

April 15
Nicolás Maduro, Chavez’s handpicked successor, wins a razor-thin victory in a presidential election, edging out opposition leader Henrique Capriles, who refuses to accept defeat. Violence erupts leaving several dead.

November 9
As the economy deteriorates, Mr Maduro initiates a crackdown on private businesses, seizing electronic stores he accuses of unjustified price rises, hoarding and speculation, and jailing “bourgeois” businessmen.

November 19
The legislature grants decree powers to Mr Maduro, as he pledges to wage an “economic war” to battle inflation and shortages.

December 5
Venezuelan voters help cement Mr Maduro’s hold on power in a nationwide municipal poll cast as a referendum on the president and the legacy of the late Chávez.

January 22
While resisting wholesale reform of its tight foreign currency exchange controls – which some economists blame for the country’s economic woes – officials announce the creation of a multi-tiered exchange rate system, which critics call a devaluation by stealth.

February 12
After a week of scattered student-led demonstrations, violence flares in Caracas, leaving three people dead, and fuelling a wave of protests over violence and the economic crisis

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