The Continuing US Strategy for Regime Change in Venezuela: A Tragedy is Unfolding

By Haider A. Khan
DENVER, May 22 2019 (IPS-Partners)

The Venezuelan crisis is festering. For the moment the elected President Maduro has hung onto power against the machinations of Bolton and his crew. However the pressure from the imperialists continues with the propaganda machines of the “liberal” North in full operation.The situation for the Venezuelan people is bleak but a right wing coup will not settle this problem.

Haider A. Khan

We may recall that as of 24 January,2019 President Trump ordered the US diplomats in Venezuela to stay put against the January 23 orders of the Venezuelan president for the same diplomats to leave within 72 hours. Thus the stage was set for a confrontation and the outcome became far from certain. Some in the US diplomatic community feared a Benghazi-like development.

According to the Guardian at that time:

The head of Venezuela’s armed forces has thrown his weight behind the embattled president, warning that the country could be thrust into a devastating civil war by what he called a US-backed “criminal plan” to unseat Nicolás Maduro.

The most recent crisis was precipitated when on Wednesday, January 23, President Trump announced that the United States will recognize the Venezuelan opposition leader Juan Guaido who had just declared himself as the legitimate president of Venezuela unconstitutionally. President Maduro was quick to respond. He announced immediately that Venezuela was cutting off diplomatic ties with the US. Venezuela gave the embassy’s diplomatic staff 72 hours to leave the country.

Juan Guaido claims that Nicolas Maduro, the current president of Venezuela, is illegitimate.According to him since the president and the vice president both are illegitimate, he is the next in line for the presidency. His unprecedented declaration based on his own claims were set in motion in no small measure, one suspects, by the US Vice President Mike Pence’s announcement directed at Venezuelans, urging them to rise up against President Maduro.

The quick recognition of what appears to be a calculated move to up the ante and the orders for the US diplomats to stay put seemed consistent with a US plan for regime change. However, that did not succeed and diplomats eventually left. Nest, the US asked Venezuelan diplomats to leave so that Guido’s diplomats could occupy the Venezuelan embassy in Washington DC. However, the local US anti-imperialist activists occupied the embassy against US opposition. Indeed this part has turned out to be a tragi-comic farce.

Domestically, Venezuelans are divided. Clearly the government has mismanaged the economy, creating hyperinflation. Furrthermore, it did not take firm timely countervailing steps to circumvent the sanctions. But it still has support among 30 percent at least of the poor and working people. While Maduro’s rating has dived to 20 percent, the Bolivarian revolution of Chavez and the Chavezistas are supported by a significant segment who have seen a rapid improvement of their position in the past. Also, for the first time, they have been part of the political process.

The opposition is not united behind the oligarchy and big business which the US wants to see in power. The National Assembly which has just one house—a reform carried out by the Chaezistas— is not controlled by them although their agents are in key positions.

As a result fewer than 30 percent of the masses support the assembly. Thus Juan Guaido’s claim that he represents the will of the people is less than impressive and lacks credibility.

What about the international situation?

Although Canada and Colombia quickly echoed the US position, by now Russia, Cuba, China, India many others have either declared themselves for the status quo or are noncommittal. Thus short of US military intervention, the external support for Juan Guaido’s claims at present seems tenuous. Short of US military intervention, or a domestic coup, there will either be a negotiated solution or civil war.

Most analysts with expertise on Venezuelan politics tell us that Maduro’s survival depends on the backing of the military. In the past Maduro has rewarded the top brass with senior positions in government and the state oil company PDVSA. Some of these appointments are also part of the mismanagement problem. For the moment though, the top echelon in the army seems to be with Maduro. As Padrino declared:

“We are here to avoid, at all costs … a conflict between Venezuelans. It is not civil war, a war between brothers that will solve the problems of Venezuela. It is dialogue….We members of the armed forces know well the consequences [of war], just from looking at the history of humanity, of the last century, when millions and millions of human beings lost their lives….I have to alert the people of Venezuela to the severe danger that this represents to our integrity and our national sovereignty.”

The so-called special envoy, Eliott Abrams so far has not delivered a Nicaraguan style counterforce to revolution. It is certainly not for lack of trying or generous expenditure of US resources. A combination of a lack of grassroots support in the region, internal strength of Venezuelan revolution and the weakness of Guido’s illegitimate coup all combine to produce the current frustrations for Abrams. However, he is hoping to foster a counterrevolution nevertheless.

The role of corporate media is all too clear and pro-imperialist.”It’s obvious that the corporate media has been following U.S. policy,” says Venezuelan sociologist Edgardo Lander. “It happened during the Iraq War. It’s happened in Libya. It’s happened in all over the place.” Without exonerating the incompetence of Maduro, analysts like Lander point to other factors from sanctions to fostering counterrevolution. Deepening the crisis hoping for a regime change to US liking is not the solution that the Venezuelans and the world need.

One thing is clear. Venezuela is dangerously close to a civil war with the real possibility of direct US intervention upping the ante. The US policy has already worsened the situation. Apart from a Benghazi-like tragedy for the US, the greater tragedy for Venezuela and the region looms large. We can only hope that the domestic forces in Venezuela will find a just solution to this crisis through peaceful negotiations.

The writer is a Professor of Economics, University of Denver. Josef Korbel School of International Studies and former Senior Economic Adviser to UNCTAD. He could be reached by email hkhan@du.edu

Poverty, policy and economic ruin? The true folly of neoliberalism

By Eresh Omar Jamal
May 22 2019 (IPS-Partners)

No matter which approach is used, every method of measurement shows inequality has risen in Bangladesh (at least) over the last 10 years. If we take the latest Household Income and Expenditure Survey of the Bangladesh Bureau of Statistics, we see that the country’s Gini coefficient—a measure of inequality—went up (indicating disparity has grown) from 0.458 in 2010 to 0.482 in 2016. From a different angle, a report released by Oxfam towards the close of last year ranked Bangladesh 148th in the world—out of 157 countries—for reducing inequality.

Around the same time, reports were coming out that the International Monetary Fund and the Asian Development Bank were forecasting Bangladesh’s economy to grow by 7.5 percent in the current fiscal year—illustrating a somewhat confusing contradiction of inequality rising significantly at the same time as GDP.

While some have since then dismissed this as inevitable, in reality that is far from the truth.

“The economic growth in recent years has been far from inclusive,” according to Selim Raihan, executive director of the South Asian Network on Economic Modeling. And is the result of failed economic policies—time-tested to have proven disastrous.

According to a 2018 Transparency International Bangladesh study, over 63 percent households seek healthcare from the private sector, which shows either a lack of availability of public healthcare facilities, or that they are abysmal—forcing people to seek treatment elsewhere.

And, according to a 2015 study by the health ministry, out-of-pocket (OOP) healthcare expenditure in Bangladesh was 67 percent—the highest in South and Southeast Asia—whereas the global average was 32 percent. Which shows the lack of government control over healthcare costs because the private sector has no meaningful competition from the public sector.

The combination of these two has been devastating. A study by the International Centre for Diarrhoeal Disease Research, Bangladesh, found that four to five million people were being pushed into poverty by OOP healthcare expenditures every year. Yet, the government has shown minimal interest in increasing its involvement in providing better healthcare service, even though healthcare is a quasi-public good in the sense that it benefits everyone in the community—and thus where government support should be focused on.

Public expenditure on education and health, which were already low, has declined in recent years. And “such low expenditure does not help…reduce poverty and inequality,” according to Raihan, whose view has been echoed by Zahid Hussein, lead economist of the World Bank’s Dhaka office who added that the poor are not “in a position to access privileges that the government gives to particular businesses and interest groups” such as “bailouts”, which have vacuumed away Tk 10,272 crore of government funds as of September last year, that could have gone into providing improved healthcare—not only to offset the aforementioned problems, but because that generally benefits less wealthy sections of society.

But that is just the tip of the iceberg.

In his book And Forgive Them Their Debts, professor of economics and economic history, Dr Michael Hudson, mentions how one of the first things the Babylonians, who first invented the concept of the Jubilee Year (derived from debt jubilee), realised was that “finance was not a part of the economy, but grew by its own mathematical laws.” Their scribes noted how while compound interest grew “at the equivalent of 20 percent a year, doubling in five years and quadrupling in 10,” their herd population and agriculture grew (GDP of ancient times) as an “S-Curve and tapered off”.

So, every ruler, going thousands of years back into history, knew that debts tended to grow faster than the economy’s ability to pay. Giving rise to the idea of debt jubilee—but with one catch: it was personal debts that were forgiven, not business debts or debts of the criminally rich who made their fortunes by borrowing from the public exchequer with the intention of never paying back.

During the last century (era of neoliberalism), everything somehow got reversed. And debt was turned from being “a balance sheet item to a growth item,” according to financial expert Max Keiser—popularising the perception that “the faster companies could incur debt”, the faster it could be “securitised” to “other banks to create this daisy-chain”, not only making debt “okay” but the “basis of the economy”.

This brought about a historic change because “never in history did people think that the way to get rich was to go into debt,” says Dr Hudson. And yet this was being done by countries “on a national level” to commit “economic suicide”.

What neoliberals failed to see was that money, despite being needed to buy a car or education, was not a factor of production. And that banks, in the process of giving people access to credit—which is an unproductive activity in itself as it produces nothing extra but simply allows someone to acquire what has already been produced—were simply extracting wealth out of the economy for themselves, and not even reinvesting it back into the economy.

Basically, finance became the tool for the ultra-rich to gain their “unearned” share from the “productive” activities of others. And instead of providing tangible services that balance the scale such as healthcare, the service that the government has been providing is the facilitation of this wealth extraction—which, to some extent, is the service of “you scratch my back and I’ll scratch yours” essentially.

Similar to every other country suffering from the curse of neoliberalism, parallel to the hollowing out of banks and government-backed extortion of the public exchequer, Bangladesh too saw huge amounts of money fleeing the country during this period.

In late January, the Global Financial Integrity released a report ranking Bangladesh second in South Asia for illicit money outflows. And said that some USD 5.9 billion was siphoned out of Bangladesh in 2015 through trade misinvoicing, after a report released in 2017 estimated that Bangladesh lost between USD 6-9 billion to illicit outflows in 2014. What has been the government’s (policy or any other) response? To do nothing—except siphon off more and more taxpayers’ funds and ship them into dying banks that seem to be taking the economy with them, to the grave.

In the process of extracting wealth from the real wealth producers, what these “real dependent” classes are doing is killing the Golden Goose that they rely on, which is why we see such capital outflows as the corrupt set aside their retirement funds before escaping to other countries.

But, have these people looked around properly? Nearly the entire world (especially developed countries) is under the thumb of neoliberalism. And so, those who believe they can profit by leeching off the productive powers of others in this country because of their “position” can only be the feed of others doing the same elsewhere.

Because neoliberalism is the economic and financial ideology that is most akin to that of today’s radicalism, which makes the role of its agents equivalent to that of suicide bombers—whose ultimate destination too is one of complete economic and financial ruin.

Eresh Omar Jamal is a member of the editorial team at The Daily Star.

This story was originally published by The Daily Star, Bangladesh