Is Venezuela dismantling its democracy?

You can enable subtitles (captions) in the video player

Welcome to World Weekly with me, Ben Hall. Venezuela is dismantling democracy. That is how Mexico's foreign minister describes the latest developments in the oil-rich but cash-strapped South American nation.

This week, president Nicolas Maduro's Socialist Party won 17 out of 23 governorships in regional elections that many critics decried as blatantly rigged ballots. A party that has presided over perhaps the worst economic meltdown in Latin American history implausibly won the same share of the vote as it did four years ago. The flawed election is likely to increase the pressure for fresh sanctions on Caracas and bring the government there closer to defaulting on its $70 billion of traded debt.

Joining me to discuss the political, economic, and humanitarian crises unfolding in Venezuela are our correspondent in the region, Gideon Long, and here in London, our Latin American editor, Johnpaul Rathbone.

Gideon, if I can start with you, Venezuela has a long history of imperfect elections. How does this one rate?

Well, according to the opposition, it's more of the same really. It's a pattern that we've seen throughout the last few years. But the big thing here really is the surprise. I was in Venezuela last week. I was talking to opposition candidates, opposition politicians for the three or four days before the elections. And everyone was really upbeat. Everybody certainly in the states that I was in-- in Merida and Tachira near the Colombian border-- was very upbeat, and they were saying that they were fairly sure that they would win between around 11 and 18 of the 23 governorships that were up for grabs.

And they said they felt as though they were on the cusp of a change. That, if they could win up to 18 governorships, they could use this as leverage and they could maybe force a date for presidential elections next year. So you can imagine the disappointment once the election results came out and they realised that, rather than winning 18 of 23 governorships, they had actually only won five. So I think that's the big difference between this election and previous elections is just the surprise of the result. Nobody was expecting to fare this badly.

Tell us a little bit more about how the election was arguably flawed.

Well, when the election results came out, I was listening Tibisay Lucena, the head of the Electoral Commission, read the election results. And my first reaction was this cannot be true. It goes against everything that we've seen in the opinion polls leading up to the results. And that was the opinion of many people in the opposition. They immediately cried fraud.

What's been interesting is that, since the election results have come out, the opposition is already backed away from that stance, which suggests that although they think that these elections might have been fraudulent, they feel as though they don't have the evidence to actually prove it. And interestingly, one of the first things that Nicolas Maduro said after the election results came out was that there would be a full audit of the results. So he seems fairly confident as well, that the opposition can't actually prove blatant fraud.

So now, the opposition is looking around for what might have happened. And there are many reasons why this vote could have been influenced by the tactics and the tricks of the government. One thing to bear in mind is that lots of people have left Venezuela within the last few years. Around 1.5 million people have left the country. And most of those people, you can assume, would have voted against the government. So that's a reasonably big factor.

Other factors. Fear and intimidation. Many people who work for state companies we're told that if they didn't vote for their government they would lose their jobs. Assisted voting. Many people, particularly older people, disabled people, were escorted to the polling stations by government supporters. And one doesn't know, but one can assume that they were pretty much told which way to vote.

So there are many ways in which the government could have swung this vote without actually blatantly fiddling the results.

JP, does this leave the Maduro government more vulnerable to stiffer, tougher sanctions from the US and Europe, do you think?

It ramps up the pressure on the European Union, which has been considering sanctions, and probably the US. What the election also does, though, is it casts a shadow of doubt about the legality or illegality. So it's not quite such an open-and-shut case. But as you mentioned, the Mexican foreign minister and 12 other countries in the region, including Brazil and Argentina, believe that Venezuelan democracy is being dismantled. So really, it's only a question of time before action is taken. And although Venezuela might seem very distant to Europe, there are an estimated one and a half million dual national Portuguese, Italian, and Spanish citizens. So there's a lot of people who could end up in Europe if the situation continues to deteriorate in Venezuela as seems likely.

There's also the human rights considerations and the fact that a lot of Venezuelan officials who have been charged with corruption or are suspected of corruption lead very merry lives in Paris, Madrid, and Italy.

But this crisis has been brewing for several years, and the situation on the ground is pretty dreadful for ordinary Venezuelans. What would it actually take to get the EU to bring much tougher sanctions or to get the Americans, for example, to introduce curbs on oil imports?

I don't think it takes much more for the EU to impose sanctions. The EU is a large body with almost 30 members, and so it requires a consensus on all that. And I understand that Greece has been reluctant to impose sanctions but that they're coming around to the view that they should.

In terms of the US, Trump has said, whether it's worth taking what he says at face value, that he basically wants to drop the hammer on Venezuela, and there are two ways of doing that. The first one is to ban US exports of gasoline to Venezuela, which Venezuela needs to lighten up its very heavy crude and then export to the rest of the world. And oil is basically the only thing that Venezuela exports. And the second, more extreme alternative is to sanction or i.e. ban the sale of Venezuelan crude to the US, which would hit a large market which is an important source of cash for Venezuela, which it desperately needs because it is endlessly teetering on the brink of default.

Whether that would actually be enough to produce a change is another matter because you can't just drop the bomb and do nothing. You have to follow through. And that's, I think, one reason, perhaps, why the Trump administration, however hardline it might be has, pulled back. And the Secretary of State, Rex Tillerson, is after all the former CEO of Exxon Mobil, and so he does know quite a lot about oil markets. And even if you do lose an important oil market like US, oil is fungible and you can sell it somewhere else.

Gideon, how solidly dug in is the socialist party, is the Maduro government? Is there any sign that there may well be some kind of transition away towards a new government there?

Well, if you would have asked me a week ago, I might have said yes. But on the basis of these election results. It would seem to be very dug in. If you look at the figures, the government lost only around a quarter of a million votes from the last elections which are considered fair, the elections in December 2015, the congressional elections. The opposition at same time lost over two million votes. So it would seem a fairly clear victory for the government, and it seems very dug in.

I think one of the things that the opposition will have to ponder is where do they go from here. There's been a lot of self-flagellation, a lot of self-criticism on the part of the opposition over the last few days. As they say, they've stepped away from these accusations of open fraud and are now saying, how could we have allowed this to happen?

The opposition is in disarray. And even the five governorships that they won, those five governors the opposition coalition, the MUD, has decided that they will not swear allegiance to the Constituent Assembly as the government has insisted that they should. So the likelihood is that even those five governorships that they won, those governors will not be sworn in. They won't take up their positions.

So it leaves the opposition in a very difficult position. I think there's a lot of hand-wringing within the MUD and a lot of thoughts about where they go from here. And the government looks as dug in as it has been ever before.

JP, you broke the news this week that the International Monetary Fund was drawing up plans for what would be a massive bailout of Venezuela, presumably in the event of a transition away from the current government, which has been very hostile to the fund and its activities. What hope is there in Washington and other capitals that this can actually come about?

Well, this is the sort of external flip side of the hand-wringing that the opposition is doing inside the country, what to do. And the international community-- Russia, China, and Venezuelan allies such as Cuba and Bolivia apart-- they've turned to sanctions to try and promote a change in behaviour in the regime. And then there's also the financial component. And the only thing you can really do there is be prepared for an eventual transition. Not necessarily a political transition, but a transition whereby the economy all the distortions that are there, such as the multiple exchange rate, which is a source of almost unlimited corruption, where those sorts of distortions are removed.

And Venezuela desperately needs balance of payment support. Its imports have fallen 80% in four years. This is a really crushing squeeze on human living standards. So to that end, the IMF, sensibly, has been crunching some of the numbers on what a bailout package would look like. And indeed, it's sobering once you start doing the maths.

A really important component of that, should this day or when this day comes, is the fast early money because you need that for humanitarian aid. Incidentally, Maduro has banned all talk of a humanitarian so-called corridor into Venezuela. That money will probably be bi-national US or European aid. So you prepare responsibly for the day that might happen, for when there is a chance of turning things around and improving Venezuelans' lot.

You mentioned there about Venezuela's few remaining allies, Cuba and Russia, for example. Do they really have leverage over Caracas, and could they really help engineer some change there?

That's a really good question. First, why isn't Russia in Venezuela? Venezuela has defaulted on its debt to Russia, as it has basically defaulted on its debts to China, as it has defaulted on its obligations to its citizens, and as it may well yet do in its obligation to international bondholders. So Russia is not there out of love. It's there perhaps to be an irritant to the US in its own backyard, also because there's a prospect that it could swap some of the money that Venezuela owes it for cut price stakes in oil ventures. To the extent that it's a source of cash or a source of an alleviation to Venezuela's financial problems, then Russia is an important interlocutor.

The same sort of goes for Cuba, which has a very controversial relationship with Venezuela. It's largely a mercantile relationship, I believe, notwithstanding their ideological affinity. Cuba sends roughly 15,000 doctors to Venezuela in return for money, which is received by the government not by the doctors. And it also is tightly embedded in the security apparatus and is understood to be very close adviser to Mr. Maduro, the president of Venezuela. You don't go to Caracas and hear Cuban accents or see Cubans, but this is the wide supposition. And indeed, Maduro travels to Havana frequently.

My problem with the idea that the Cubans will the Russians or, indeed, anyone is driving events in Venezuela is that the country is so chaotic and there are so many different voices and semi-warring clans within Chavismo that the Cubans, the Russians, Maduro's own closed circle, other closed circles within Chavismo that may not necessarily agree with Maduro-- in fact, we know that they don't-- they are also voices.

So it is a dictatorship, I think it's fair to say, in Venezuela. Whether Maduro is a dictator or not is another matter because he doesn't actually necessarily control what's going on in the country.

Gideon, coming back to you for a final word, where do you see hope and optimism for the benighted citizens of Venezuela?

I don't see much of it in Venezuela itself. I think the signs of hope are all outside Venezuela. They lie with the United States, with the European Union, and with other Latin American countries. So many times in the past we've seen political situations in Latin America where other countries in the region haven't wanted to involved, and that is not the case this time. Most countries in Latin America and certainly all of the major countries in the region have a united front when it comes to Venezuela, and they're speaking with one voice. That's not always been the case in the past. So I think if there is any hope, it's not in Venezuela itself. It's in Latin America and in the world in general.

OK. That's it for this week. My thanks to Gideon Long and to JP Rathbone. World Weekly is produced by Fiona Symon. Until next week, goodbye. .