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Explore the latest news and events from around the world, including the Kurdish SDF's advances against ISIS, the tensions between Turkey and China over Uighur concentration camps, and the feuds between France, Italy, and Saudi Arabia. Stay updated on international politics, the US government shutdown, the Brexit negotiations, the Venezuelan crisis, and more. Discover the stories that shape our world today.
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What happened in the last week • Kurdish SDF closes in on last ISIS stronghold in Syria. What happens once the US is gone? • Turkey insists that China shut down concentration camps for Uighurs in Xinjiang. • Turkey accuses the Saudis of obstructing inquiry into the death of Kashoggi. • France and Italy feud after Italian Deputy PM visits and has photos taken in Paris with yellow vests whom they openly support. France recalls it ambassador to Italy. Italian populists blame France for not taking enough migrants despite the fact that most come former Italian colonies, for lecturing them about European values and keeping them in debt. • The squabbles between Italy’s populists and Macron may seem like petty politicking, but they are also skirmishes in a war that is only just starting. Béchamel and the fork – Italy criticises French colonial past - don’t mention Italy in Ethiopia or where the Mona Lisa is at the moment. • Senator Elisabeth Warren launches her bid for the Democratic presidential nomination for 2020 – likely to be a crowded field. Trump calls her a fraud and a “socialist”. She has vowed to fight corruption in Washington, level the economic playing field and reform the US democratic process. She has tried to highlight what she sees as the plight of an American working class that has been left behind by rapacious big business and indifferent government.
elsewhere • Kim Jong Un and Trump to meet in Hanoi, Vietnam, on February 27 and 28. • Government shut down avoided again in the US with a $1.7bn funding for the wall – about a quarter Trump asked for. Will he sign it? • Brexit – Donald Tusk’s musings about a "special place in hell" for those who championed Britain leaving the EU "without a sketch of a plan how to carry it out safely" detonated another bitter row at a particularly delicate moment in the talks. Time clock. • Brexiteers were incandescent. “devilish” “spiteful” comments abound. Strange claims that the EU is panicking and on the back foot. • Thai King stops elder sister from standing in the elections. It was announced that she would run as a candidate for the Thai Raksa Chart party, which is loyal to ousted prime minister Thaksin Shinawatra, whose allies have won every national election since 2001. • Thai Raksa Chart is attempting to defeat Prayuth Chan-ocha, leader of Thailand's military junta, in the election on 24 March this year.
Venezuela in Crisis Wodonga U3A - 2019
The Exodus • Jobs have largely disappeared. Now they have to resort to selling services (for example, doing manicures or washing windows) or small items like, bread and coffee on the street just to feed themselves • Authorities there have announced that they will follow the lead of Ecuador and require Venezuelans reaching the border to enter with a passport, a document that is increasingly difficult to obtain in Venezuela. • Many Venezuelans cross through Colombia on their way to other countries in Latin America. • Colombia is currently hosting the largest number of Venezuelans — more than 800,000 through official and unofficial entry points along its 1,300-mile border with Venezuela. • Earlier this year Colombia suspended temporary visas, so most Venezuelans arriving today can’t get legal work, leaving them vulnerable to exploitation. Most sleep in parks and beaches. • Tensions are rising as Colombians see Venezuelans taking jobs at a lower wage than legally allowed in Colombia, which is also an exploitative wage for the Venezuelans. • They also see Venezuelans undercutting their own businesses by selling items brought from Venezuela at a much lower cost than possible for Colombian businesses.
How the political crisis started • The opposition accuses President Nicolas Maduro of moving towards a dictatorship, and want him to resign. But Maduro says the opposition is conspiring with foreign entities, specifically the United States, to destabilise the country. • Legislators election suspended. In January 2016, the Supreme Court suspended the election of four legislators - three that were enrolled with the opposition and one with the ruling party - for alleged voting irregularities. • The opposition accused the court of trying to strip them of their super-majority, and went ahead and swore in three of the legislators in question. • Supreme Court takes over the National Assembly. In response, the Supreme Court ruled that the entire National Assembly was in contempt and all decisions it made would be null. • The deadlock continued when the court suspended a stay-or-go referendum against Maduro and postponed regional elections until 2017. • After the National Assembly refused to approve the country's state-run oil company, PDVSA, from forming joint ventures with private companies, the Supreme Court ruled on March 30 that it will take over the Congress' legislative powers.
Problems everywhere • Hyperinflation. Venezuela's inflation rate, which has been over 50 percent since 2014, reached 536.2 percent in 2017 largely due to the rapid depreciation of the local currency on the black market, the opposition-controlled National Assembly said on October. • The International Monetary Fund estimates that inflation will reach 2,068.5 percent by 2018. • Economic war. The government says it is the victim of an "economic war", including speculation and hoarding, by pro-opposition businessmen. Venezuela's currency has weakened sharply on the black market. • Food shortages. The government controls the price of basic goods, but the black market still has a powerful influence on prices. Prices on basic goods can change in a matter of days, causing severe food shortages • The often leads to food shortage which reflects in the long lines of people inside and outside supermarkets and the attempts to cross the border with Colombia to buy basic goods.
The impact on neighbouring countries • Thousands of Venezuelans have crossed into Peru, Ecuador and Colombia in a bid to escape the crisis in their homeland. • The United Nations says 2.3 million Venezuelans have fled since 2014. • More than one million have arrived in Colombia in less than two years, with many using the mountainous nation as a bridge to Ecuador and Peru, where they think they will have more luck getting jobs and applying for asylum. • More than a half million have entered Ecuador since January, leading to officials there declaring a state of emergency. • Brazil is to send troops to its border with Venezuela on Monday after residents in the border town of Pacaraima drove out Venezuelan migrants from their improvised camps. Thirteen nations in North and South America denounced Mr. Maduro this month, urging him to hand over power to Venezuela’s National Assembly to stabilize the country. • In Peru, officials recorded more than 5,000 Venezuelan entries on a single day.
Money problems galore • Caracas will begin issuing new banknotes after slashing five zeroes off the crippled bolivar. • The new sovereign bolivar, named as such to distinguish it from the current strong bolivar (which has proven to be anything but), will be anchored to Venezuela's widely discredited cryptocurrency, the petro. • Each petro will be worth around $60 (£47), based on the price of a barrel of the country's oil. • In addition, the minimum wage will be fixed at half a petro (1,800 sovereign bolivars). That is $6 per months • This is about $28 (£22), more than 34 times the previous level of less than a dollar at the prevailing black market rate. Still $6 per month • Maduro attempts to end the excessive money printing that has been a regular feature of recent years. • The result has been rampant hyperinflation, which has pushed up prices to astronomical levels. At the moment, the monthly minimum wage is not enough to buy a kilo of meat.
Why is public transport out of action? • Heavily-subsidized oil as is a prime example. Under the complicit eyes of the border officials they buy off, smugglers siphon off oil that costs just 3 cents a barrel to neighbouring Colombia, where they usually sell it for 90 times as much. It is estimated that such dealings deprive the Venezuelan government of $2 billion a year in revenues. • Maduro raised the price of unleaded at the pumps from 1 cent per litre to 10 cents. Premium is now 60 cents per litre. • the 92 tankers needed to carry the fuel would probably be stuck at the pump, broken down and without replacement parts. • Fuel in the oil-rich nation may be practically free, but motorists are finding it increasingly hard to keep their vehicles on the road. Petrol shortages are ever more common: motorists commonly wait for six hours or more in fuel queues. • Thousands of workers are fleeing Venezuela’s state-owned oil company, abandoning once-coveted jobs made worthless by the worst inflation in the world. • Batteries, engine oil, and tyres are prohibitively expensive – if they are even available. Desperate oil workers and criminals are also stripping the oil company of vital equipment, vehicles, pumps and copper wiring, carrying off whatever they can to make money. • And although Venezuela has the largest proven oil reserves on the planet, faltering infrastructure has led to a steep drop in production.
Problems continued • Oil output. Venezuela's oil production which has been falling by about 20,000 barrels per day (bpd) since last year, is on track to fall by at least 250,000 bpd in 2017. • Venezuela holds the world's largest supply of crude oil — but it’s not providing the income that it used to. The price of oil fell from $100 a barrel in 2014 to $26 a barrel in 2016. Now barrels are around $50 each, which means Venezuela’s main source of income has been cut in half. • Refinancing its debt. However, the country's President Nicolas Maduro has dismissed the possibility of a default, adding that Venezuela would instead work on refinancing and restructuring its foreign debt. • Health assistance. The economic crisis is also hitting Venezuela's public health system the hardest. In the country's public hospitals, medicine and equipment are increasingly not available. • There is a shortage of around 85 percent of all medicines in the country. • Meanwhile, 13,000 doctors have left Venezuela in the past four years. • Crime and poverty. Crime and violence are also widespread. In 2016, 27,479 people were killed - an all-time high.
What is a Petro state? • Petro state is an informal term used to describe a country with several interrelated attributes: • government income is deeply reliant on the export of oil and natural gas, • economic and political power are highly concentrated in an elite minority, and • political institutions are weak and unaccountable, and corruption is widespread. • Countries often described as petro states include Algeria, Cameroon, Chad, Ecuador, Indonesia, Iran, Libya, Mexico, Nigeria, Oman, Qatar, Russia, Saudi Arabia, the United Arab Emirates, and Venezuela. • a resource boom attracts large inflows of foreign capital, which leads to an appreciation of the local currency and a boost for imports that are now comparatively cheaper. This sucks labour and capital away from other sectors of the economy, such as agriculture and manufacturing, which economists say are more important for growth and competitiveness. • In extreme cases, a petro state forgoes local oil production and instead derives most of its oil wealth through high taxes on foreign drillers. Petro state economies are then left highly vulnerable to unpredictable swings in global energy prices and capital flight.
The perfect example of a petro state - Venezuela • Venezuela is the archetype of a failed petro state, experts say. Oil continues to play a dominant role in the country’s fortunes more than a century after it was discovered in the early twentieth century. The most recent plunge in oil prices—falling from more than $100 per barrel in 2014 to a low of under $30 per barrel in early 2016—has sucked Venezuela into an economic and political spiral, from which it could take decades to recover. • A number of grim indicators tell the story. • Oil dependence. Oil sales account for 98 percent of export earnings and as much as 50 percent of gross domestic product (GDP). • Falling production. Oil output has declined for decades, reaching a new low in 2018. • Spiralling economy. In 2018, GDP shrunk by double digits for a third consecutive year. • Soaring debt. Venezuela has missed billions of dollars in payments since defaulting in late 2017. • Hyperinflation. Annual inflation is running at more than 80,000 percent • Growing autocracy. President Nicolas Maduro has violated basic tenets of democracy to maintain power. • Together these have caused a devastating humanitarian crisis with severe shortages of basic goods, such as food and medical supplies. In 2017, Nine out of ten live in poverty. Roughly one in ten have fled the country.
Decline and fall of the oil industry • The decline and fall of Venezuela’s oil industry essentially begins with its nationalization in 1976, a time of booming crude prices and rising resource nationalism. • President Pérez sought a much greater role for the state over the economy and especially wanted to use the country’s fast-growing oil wealth to turbo charge development. That year, to gain full national control over the oil fields, Caracas banished foreign oil firms and created a new, state-run oil monopoly called PDVSA. • Part of a dream of Venezuela grabbing full control of its destiny. • At first, Venezuela’s state-owned oil company stood out. A large number of its executives had previously worked for foreign companies in the country and imbued the new firm with a business-oriented outlook and a high degree of professionalism. • PDVSA had a lean workforce, an efficient cost structure, and a global outlook: A decade after its creation, the company acquired half of Citgo, the big U.S. refiner, and stakes in a pair of European refineries.
Decline and fall of the oil industry • Yet none of these assets proved much help when a global oil glut in the mid-1980s depressed prices and hammered the national economy. OPEC members struggled to prop up prices by cutting back output. By the middle of the decade, Venezuelan production had fallen below 50 percent less than before nationalization. • When oil is cheap, it becomes very tempting for countries to pump more crude — even if that extra production ends up keeping prices low. And so, to right the reeling Venezuelan economy in the early 1990s, the government sought to reopen the oil industry to international companies. The outsiders would be especially useful in accessing the Orinoco heavy oil belt, which holds more than a trillion barrels of tarlike bitumen. Unlike regular light crude oil, which can be pumped straight out of the ground and sold as is, heavy oil is more difficult to extract and then needs to be upgraded to something resembling liquid oil before sale. The foreigners had that expertise • By the mid-1990s, international firms, including Chevron and ConocoPhillips, had moved back into the country and were hard at work unlocking Venezuela’s massive heavy oil deposits. But in 1998, the price of oil collapsed again, dipping to $10 a barrel. The impact on Venezuela — which, like many oil-rich countries, had never managed to diversify its economy despite a bout of reform efforts in the 1970s. Then along came Chávez, a former army lieutenant colonel who’d served time in prison for an abortive coup attempt in 1992. He won the 1998 presidential election on the promise to reshape and restore Venezuela’s reeling economy.
How it started - Chavez • Chavez was elected president in 1998 on a socialist platform, pledging to use Venezuela’s vast oil wealth to reduce poverty and inequality. While his costly “Bolivarian missions” expanded social services and cut poverty by 20 percent, he also took several steps that precipitated a long and steady decline in the country’s oil production, which peaked in the late 1990s and early 2000s. • His decision to fire thousands of experienced PDVSA workers who had taken part in an industry strike in 2002–2003 gutted the company of important technical expertise. Beginning in 2005, Chavez provided subsidized oil to several countries in the region, including Cuba, through an alliance known as Petrocaribe. Over the course of Chavez’s presidency, which lasted until 2013, strategic petroleum reserves dwindled and government debt doubled. • He also nationalized hundreds of private businesses and foreign-owned assets, such as oil projects run by ExxonMobil and ConocoPhillips. • Is there a way out? Many countries have established sovereign wealth funds (SWF) to manage investment of revenues from their vast resource wealth. SWFs in some fifty countries managed more than $7 trillion in 2018.
The golden years • As recently as 1970, Venezuela was the richest country in Latin America. Its gross domestic product (GDP) was higher than those of Spain, Greece and Israel. • Most of Venezuela’s wealth came from its large oil reserves but in the early 1980s, concerns that the country might run out of its greatest resource led politicians to limit oil production. Around the same time, a global oil glut pushed down oil prices. • The combination of lower oil production and lower oil prices sent the country’s economy into freefall. From 1980 to 1990, Venezuela's GDP per capita fell by 46%. • Then came legendary leader Hugo Chavez, who transformed Venezuela’s political and economic landscape by nationalising industries and funnelling enormous amounts of government money into social programmes. • Under his rule, between 1999 and 2013, Venezuela’s unemployment rate halved, income per capita more than doubled, the poverty rate fell by more than half, education improved, and infant mortality rates declined.
Chavez and Maduro • Chavez died of cancer at the age of 58 in 2013, at the very beginning of his third term in office, and his hand-picked successor, Nicolas Maduro, has failed to impress. • Maduro came in as oil prices fell. Venezuela’s reliance on its oil reserves, which account for around 95% of its export revenue, means that the fall global oil prices since 2014 has had a devastating impact on living standards. • Then global oil prices fell dramatically, leaving his successor, Maduro, with a recession that became a crisis. • Without the flood of foreign oil dollars flowing in that could be used to buy products, imports dried up and shelves emptied of basic necessities. • Recession and sky-high inflation have left many Venezuelans unable to afford basic necessities, and even those who have the money face shortages of everything from food to medicine. Public health and transportation is also suffering. • Maduro has frequently blamed opposition “sabotage” for such failings, but the government has left the population “with two options: leave the country or depend on benefits.
Chavez, Maduro and economics • The economic collapse began in the ways Mr. Chávez wrested power, paid for loyalty with oil and purged his enemies. • After he inherited a collapsing economy, Mr. Maduro granted the military control of lucrative industries and printed money to dole out patronage — worsening the crisis, but retaining power. • Mr. Maduro has also held on by stifling dissent: Human rights groups say he has arrested more than 12,800 people. In 2018, he won a widely criticized re-election, with reports of coercion, fraud and electoral rigging. • But the economy was already on shaky ground ever since 2014. As part of Chavez’s Bolivarian revolution, 1200 companies were nationalized and strict price controls were imposed on private sector actors, which many argue decreased productivity and created disincentives for production. • As a result, Venezuela began importing many of the food items and consumer goods it could no longer produce. • However, faced with plummeting central bank reserves due to lower export earnings, and a currency that is near worthless, Venezuela has cut imports drastically. This import reduction explains the widespread shortages of basic foodstuffs and essential medical goods afflicting the country. It explains the long queues of people waiting in line to purchase goods that, if available, their weekly salaries can barely cover.
Is Chavez to blame? • A populist he decided the best way to help the poor was to: • Ramp up governments spending • Throttle markets and the private sector with price controls. He seized private businesses. • He borrowed lavishly and sacked competent managers at the PDVSA wh did not support him politically/ • Maduro followed suit despite a slide in oil prices.. To pay overseas creditors he slashed imports leading to shortages and hunger. • Printed money to finance massive budget deficits • Results – hyperinflation.. Kept official exchange rate high to discourage imports – honest local importers lost out but he gave it instead to loyalists. • Even if oil price bounce back The PDVSA has been looted to pay fro social welfare, nearly free petrol and oil free to friendly governments. • Venezuela now produces less oil than it did in the 1920s. Workers pillage equipment or simply do not turn up.
Maduro in power and the Guaidó challenge • Nicolás Maduro was first elected in April 2013 after the death of his socialist mentor and predecessor in office, Hugo Chávez. At the time, he won by a thin margin of 1.6 percentage points. • During his first term in office, the economy went into freefall and many Venezuelans blame him and his socialist government for the country's decline. • Mr Maduro was re-elected to a second six-year term in highly controversial elections in May 2018, which most opposition parties boycotted. • Many opposition candidates had been barred from running while others had been jailed or had fled the country for fear of being imprisoned and the opposition parties argued that the poll would be neither free nor fair. • Mr Maduro's re-election was not recognised by Venezuela's opposition-controlled National Assembly. • After being re-elected to a second term in early elections in May 2018, Mr Maduro announced he would serve out his remaining first term and only then be sworn in for a second term on 10 January
How did Maduro get a second term in office? • Won in 2013 by 1.6% points but adored by the very poor. • Mr. Maduro’s re-election in May 2018 was widely criticized, with reports of coercion, fraud and electoral rigging. • election officials said Mr. Maduro won 68 percent of the vote. • Maduro’s party tracked those who voted by registering their “Fatherland Card” — or national benefits card — and promised aid and government subsidized food handouts if he was re-elected. • Independent international observers were not on hand, and a crackdown on critics left several of them unable to participate. Opposition leaders called for a boycott of the election. • Less than half of the country’s voters cast ballots. • More than 12,800 people have been arrested because of links to antigovernment protests. • The military supports him. • The EU insists there should be new elections – Maduro says no.
