Special Report: Inside Venezuela

Special Report: Inside Venezuela

A nation in default. An economy in ruins. A desperate struggle for millions. There are so many people hungry miserable without jobs. Now after four years of crippling U.S. sanctions Venezuelan President Nicolas Maduro senses an opportunity. Hopefully we can find parts of close in this respect that simple mutual benefit.Donald Trump is out. Joe Biden is in. He wants to negotiate a deal. Paths that allow us to normalize relations between the United States and Venezuela. But Venezuela isn’t a free country.The political opposition has been crushed. Media are censored or controlled by the state. If Maduro wants to end the sanctionsmuch has to change. No wonder there’s so much skepticism. The socioeconomic situation of Venezuela is like a very thin threadthat could break. This is Venezuela a country that has suffered one of thegreatest economic and humanitarian crises in modern history. Today it appears Nicolas Maduro and his government are preparedto negotiate an agreement that might end U.S. sanctions and pave the way for free and fair elections. Is he really ready to deal.Or just setting the stage for another disappointment. I’m Erik Schatzker and I came here to talk to the power brokers who willdecide this country’s future. Join me as we go inside Venezuela. Less than a decade ago Venezuela was the richest country inLatin America a global oil powerhouse flush with petrodollars. Today it’s one of the poorest. And life for millions is astruggle for survival. The economy has been flat on its back for 22 years tracking more and more each day. Every day. Hyperinflation abuses us. It doesn’t allow us to eat. It doesn’t allow us to get medicine.Venezuela’s decline is a story of destructive domestic politics and failed foreign intervention. It started with Hugo Chavez theself-styled revolutionary and it continues today with his chosen successor President Nicolas Maduro.Venezuela used to be the biggest oil exporter to the United States bigger than Saudi Arabia.But since 2019 U.S. sanctions have kept the country from selling most of its crude and forced it into default imposing economicsanctions on the knowledge that this is going to hurt the population as a whole. It is essentially targeting civilians orat least doing something that you know you’re aware generates significant collateral damage among noncombatants according togovernment figures. The economic embargo has wiped out some 50 billion dollars a year of export revenue. If Venezuela can’t produce its oil and sell it, can’t produce and sell its gold, can’t produce and sell its bauxite, can’t produce iron, etc. You can’t earn the revenue in the international market. How is it supposed to pay the holders of Venezuelan bonds? Even Maduro whose authoritarian regime has withstood U.S.efforts to oust him is desperate for a deal. This world has to change. The situation has to change. Maduro appears on statetelevision multiple times a week blasting the U.S. government and its political opponents for Venezuela’s troubles. But theeconomy was already in shambles by the time he took office in 2013.Chavez wanted to build a socialist utopia. When Chávez came into power there were four steps you had to take to export a container of chocolate. That’s what he Redman CEO of chocolate this El Rey.He makes some of Venezuela’s finest chocolate and sells it all over the world. Today there there’s 90 steps and in are 19ministries involved in this process of permissions and documents. So if if we could go back to four or five steps itwould be a big big big help for it for our business. And that’s just an example of everything else that goes on. The U.S.sanctions go back to the presidency of George W. Bush and continued under Barack Obama. They intensified during the Trumpadministration especially after Venezuela’s 2018 election. Maduro won.But international observers said his victory was a sham. The Main reason why Maduro is still there is not a lack of unity. We’ve had almost perfect unity in the last 12 years in Venezuela through primaries consensus, demonstrations and institutional legitimacy. In the case of the president of the parliament he is the main reason is because Maduro is a dictator. Juan Guido the leader of Venezuela’s legislature is whom the U.S. recognizes as president. Not Maduro. Today there is more pressure on Maduro his regime or what they pretended was social control degenerate into a total lack of control. They can’t even ensure supply of gasoline in the country with the world’s largest proven oil reserves does not have gas. So farmers can transport their food from the countryside to the city. Across the country drivers line up for hours sometimes days to fill up with gas. Venezuela’s once mighty oil industry has been crippled. Production that peaked at almost three and a half million barrels a day shrank to just 310,000. Not enough to meetdomestic demand. Two days more or less approximately to line up for tomorrow. Ifwe’re lucky tomorrow you’ll fill up with gasoline. The sameday they all got out today and so tomorrow. I have to spend the whole night here until tomorrow. It’s a disaster a total disaster. Losing a day a whole day of work, of rest for an entire day. In June of 2021 Oil Minister Tarek Ally Sami predicted the lineups would be gone in weeks. But they’re still hereacross the country. Infrastructure is crumbling. Poverty is everywhere. Slums blanket the hillsides. As far as the eye cansee and without access to vaccines covered 19 is ravaging the population.Oh my God. We have to get out of this. Lord please. Enough waiting already. Mr. President please make it so these peopleare vaccinated. Help them. There have never been so many poor people in Venezuela. Public services were never this bad. The income of the Venezuelanfamily has never been as low as today. Now none of the people you see here have been vaccinated. Even though there is a pandemic. Enrique Capriles this is a former state governor and presidential candidate. I think the socio economic situation of Venezuela is like a very thin thread that could break. He has not broken but he couldbreak. Maduro knows things can’t go on like this already. He’s started to unwind many of Chavez’s policies. If the restrictions the sanctions the persecution of the bank accounts of thefinances of the economy of the oil production that were forced on Venezuela. If they were forced on another country of theworld what would happen. What would they do. That’s what we should ask ourselves. Look at the globe. Point to anothercountry and see what would happen. How that would affect their reality. Well Venezuela has had to declare a war economy. We areacting on a war economy. Price controls are mostly gone. Gasoline subsidies have been reduced. Public spending wasslashed. Maduro had little choice. The economy was in a freefall. Inflation became a national obsession In Venezuela, there have already been two devaluations and the third is coming one in 2008. In another devaluation in 2018. In 2008 they removed three zeros from the currency. And in 2018 they removed five zeros. They are planning to remove six zeros from the currency. It means inflation in Venezuela exceeds 10 zeros. This ishyperinflation. The currency is useless. This is the worst. I mean.I don’t mean to be so negative but in Venezuela we’ve never seen something like this. We have heard and read about inflation inArgentina and Chile and Brazil. And we’ve always thought well that that’s that’s their problem. But now we find that it’s verymuch our problem. Venezuela’s official currency the Bolivar is almost worthless.Even the most basic goods cost millions nowadays. Prices for just about everything are in dollars. The government is lettingthem circulate freely. Starting in November he started using only dollars and to write downpeople’s names who use dollars because the money is useless. I was selling something to people for 20 million bolivars and soonafter I couldn’t buy anything with those 20 million dollarization has improved life for many. Store shelves that satempty only a few years ago are full again. Zelle, the app that draws on dollars in U.S. bank accounts is hugely popular. Lowering inflation rates is not capitalist but it’s preserving and defending the purchasing power of workers.Generating more food production is not capitalist. It’s guaranteeing the food security of the Venezuelan people. Delcy Rodriguez Maduro’s vice president is the architect of all these reforms. Today the Venezuelan private sector is becoming lessdependent on oil. Income is becoming a sector that invests or produces. And it’s finding space in Venezuela to develop its potential. Jorge Redmond is still waiting for a rebound. I’d like to believe in it. And I think in the end I think the governmenthas come to the conclusion that they need to do that because nothing works. Our economy had already collapsed. So Maduro was forced to acknowledge under the circumstances the dollarization. Maduro never established dollarization. He didn’t do it actively It happened to him in order for his dictatorship to survive politically. For Maduro, it’s a tricky balancing act. One minute he’s almost begging for negotiations to end the U.S. sanctions. The next he’s denouncing Yankee imperialism. I would say to President Joe Biden stop, from the White House from the State Department, stop the demonization of Venezuela, the demonization of the Bolivarian revolution the demonization of President Nicolás Maduro. Hopefully we can find a path of closeness respect paths of mutual benefits and paths that allow us to normalize relations between the United States and Venezuela. Just how far is Maduro willing to go. Or is he stalling for time. That’s next on Inside Venezuela. Venezuelan President Nicolas Maduro says he wants a deal to easethe U.S. sanctions that crippled his country’s economy to establish a real objective credible verifiable foundation in anegotiation process to normalize relations between the two countries in win win terms which has been our goal for a longtime. For the first time in years there’s some reason for optimism. The U.S. remains deeply concerned about the ongoingcrisis in Venezuela. And the Biden administration has set conditions for meaningful progress starting with electoral conditions that abide by international standards for democracy. The optimist in me makes me say that this sort of magnetic pull between the United States andVenezuela will overcome everything else. What hasn’t changed is the assessment of Maduro himself. Here’s how President Trump summed it up during his last State of the Union. The United States is leading a 59 nation diplomatic coalition against thesocialist dictator of Venezuela. Nicolas Maduro. Maduro is an illegitimate ruler a tyrant who brutalizes his people. But Maduro’s grip on tyranny will be smashed and broken. Here this evening it’s a very brave man.Who carries with him the hopes dreams and aspirations of all Venezuelans. Joining us in the gallery is the true and legitimate president of Venezuela Ron Guaido. Mr. President please take this message back to your people. Maduro not only outlasted Trump he insists the former president was ready to negotiate. We always had contact with Donald Trump. I was about to meet with Donald Trump personally. In September of 2018, went to the United Nations General Assembly in New York City he received the call from the White House. But we know about the pressures JohnBolton and other officials around Donald Trump were applying to prevent what he had wanted which was a meeting with me. Had we met. His story might be different. You were going to go? We were going to meet in New York. Wemade all the arrangements by phone to meet in New York. But in the end the pressure was too much for him, for Trump, and contact was canceled.. But lately Maduro has been giving ground. He moved six political detainees from prison tohouse arrest gave the opposition seats on an elections council and allowed the World Food Program into Venezuela. Trump lost. There is a new administration in Washington. Well That administration believes that decisions need to be aligned with Europe and he believes that the international community needs to be aligning to search for the recovery of democracy in Venezuela. That we are ready to accompany and supported an initiation process. There are also people on Maduro’s side who have noticed that the existential conflict is not good. We had a decision they are in because there is no way to recover the country economically. The government is under heavy internal pressure.A new round of talks between the government and the opposition is underway mediated by Norway.The reality is that negotiations in Venezuela have consistently and systematically failed. So this is not the first attempt atnegotiations nor the second nor the third. But dialogue is a constructive step after the uprisings andinsurgencies that failed to topple Maduro in 2017 and 2019. Inside the opposition divisions are sharp. One side favors astep by step approach. The gradual easing of sanctions in exchange for concessions. Theother side led by Guido wants to keep the sanctions in force and only recently agreed to negotiate. What everyone can agree on isthat conflict and confusion only help Maduro. These authoritarian regimes want to win by wearing out or by getting the world tired of fighting by getting Venezuelans tired of demanding. That is what happened in Cuba atthe time. And so I’m going to be very clear. We’re not going to get tired of fighting or demanding our rights because that is something very important. It is true that the government has cheated, but it is also true that we have made very costly mistakes. So yes every time we have advance we have arrive at adead end road. And in the end the result hasn’t weakened Maduro but has strengthen him in his position of power. Maduro faces a big test in November of 2021. Regional elections the next few months are critical to get international observers lined up for the November elections. Will he let Venezuelans vote freely and fairly.That and more coming up in this Bloomberg special report Inside Venezuela. Venezuela’s disputed election in 2018 made President NicolasMaduro a pariah in the West and provoked a crushing series of U.S. sanctions. Now he has a chance to reverse the damage if the regional elections in November 2021 are considered free. And fair enough. The Biden administration might relieve some of the pressure on the Venezuelan economy and its people. I would create a humanitarian oil for food program so that Venezuela canwe gain access to the oil revenues that it’s lost because of sanctions and it can use that in addressing its economic andhumanitarian crisis. It appears Maduro is willing to make concessions though he clearly won’t surrender all of his negotiating leverage. You can’t put a gun to the head of the people of Venezuela. With the United States tellingus what we need to do we would turn into a colony. We would turn into a protectorate.The path forward is strewn with obstacles like the political opposition. It’s fragmented and there’s no one leader to rally around a precedent that is asan popular Maduro that has so mismanaged the economy. And that is accused of the type ofatrocities that Maduro is accused of cannot win an election. What can happen is that the opposition can lose it. Theopposition is in such disarray right now. Then there’s the government from the outside. It looks like Maduro has absolute authority. Inside. it’s a different story. I’m not sure that you could say that Maduro’s a traditional dictator. In other words he doesn’t really have full control. It’s not a one man show. It’s not let’s say, It’s not the position he’s in. He really has to balance off a lot of competing factions within his own party. But the longer it takes to reach a solution the longer Maduro has to fortify his position without access to oil markets. He turned to China Russia Iran and Cuba for help. And in Caracas there’s evidence the economy is growing again.For now Venezuela can’t issue repay or restructure its debt and sanctions bar U.S. investors from trading the bonds. They’re worth just pennies on the dollar. Right now Venezuela wants to pay but it can’t because of the blockade. I’m not going to tell you our strategy but I will note ourwillingness and our commitment. Venezuela has always been a good borrower. Hans Humes owns Venezuelan bonds and makes frequent trips to Caracas. If the trading ban gets dropped and thegovernment is allowed to negotiate with its lenders he says it could be a bonanza. Something in the sort of 50 60 rangeon a net present value basis I don’t think is out of the question. Latin America has a long history of authoritarian regimes. Venezuela’s surely won’t be the last. Yet Maduro is clearly longing for a future that looks more like the past. He once knew. I’ve driven with my wife. I’ve driven in New York. I myself have driven. New York Boston Baltimore Philadelphia the whole east. I’ve driven in Miami. I’ve had a little drink. And I haven’t danced salsa on Cayo Ocho of Miami. I know the United States, Atlanta. I’ve gone to the place where the remains of Martin Luther King are and all those neighborhoods I’ve gone through them. While Trump was president many thought military intervention was the best way to change the regime in Venezuela. That’s no longer on the table. I will not support a coup d’etat. A coup d’etat is what led Venezuela to this catastrophe. In 1992, Chavez tried to seize power by force. Speaking of resentment and hateto a certain sector of society we’re seeing the consequences now. All that was accomplished was disaster, a catastrophe. Francisco Rodriguez was chief economist of Venezuela’s Congress during the Chavez ears. He doesn’t think there’s any chance Maduro will step down before the 2024 presidential election. Not unless the U.S. giveshim the one thing he craves recognition as president. Legitimacy in exchange for an orderly exit Maduro would be essentially committing to not running again. Stepping down in 2024 at the end of his term. And you could do something that changes theVenezuelan situation that opens up the space for a transition for a new figure to emerge which might come from franchise might come from the opposition but which will essentially allow the country to take a step forward. Will he or won’t. He run in2024. It could be the most consequential question for Venezuela’s future. Maduro won’t say my destiny and my future.Honestly I honestly don’t know much. Not the most important thing in my hand. The most important thing is the country. Andthat’s where our efforts are focused.
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Special Report: Inside Venezuela

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