August 10 , 2017 – Fort Russ News –
Despite the fact that the United States threatens with “harsh and rapid economic sanctions” that can block the most important source of income for Venezuela, the leader of the socialist state, Nicholas Maduro, announced victory in the voting for the creation of the Constitutional Assembly – a vote that US government officials called “fiction”.
Candidates from the ruling Socialist Party allegedly received all 545 seats in the vote. The head of the electoral council of Venezuela, Tibis Lusena, noted that more than 41% of the registered voters of the country took part in the elections, the number of which is heavily distorted by external sources. The Assembly will now replace the congress, controlled by the opposition, which was abolished by the Supreme Court in March.
This will allow Maduro to rewrite the country’s constitution, strengthening his authority, as his approval rating has fallen below 30%.
The administration of Donald Trump imposed sanctions directly against Maduro.
Under American sanctions, all Maduro assets fall into the jurisdiction of the United States. Americans are not allowed to conduct any business with the President of Venezuela.
The United States, Colombia, Spain, Peru, the EU and Argentina have already stated that they do not recognize the results of the ballot, boycotted by the country’s opposition parties.
According to Bloomberg, opposition leader Enrique Caprils said that in reality, 15% of registered voters took part in the voting.
Ten people, including a candidate in the elections, were killed on election day, when protesters tried to close down polling stations by installing barriers on the street. According to AFP, during clashes with protesters, soldiers shot at the crowd, sometimes with live ammunition.
Opposition activists promised to continue protests, which have already led to the death of 120 people since mid-April, clashes between soldiers and the opposition have result in a “street war.”
Lucy Newman of Al Jazeera, who was reporting from the capital of Caracas, noted that it was “a sad and bloody day in Venezuela.” She stated that half a dozen protestors with bullet wounds were taken to neighboring Colombia for treatment.
UN Ambassador Nikki Haley on Twitter called the vote “a sham.”
USA singing an old song.
The European Union also condemned the results. “We do not recognize these elections,” said the head of the European Parliament, Antonio Tajani. – It is quite clear that the current regime is clinging to power. The will of the people is to change the regime. “
Western powers consider that the assembly will become a place of dictatorship, and the current protests – this is just a prologue to a big war. Maduro has been met with a huge number of residents of the country who are unhappy with his policies and do not want to strengthen the power of the president. In addition, Venezuela may find itself in international isolation, which will only worsen the situation. There can be no doubt that a large financial campaign in support of Maduro’s opponents has already begun.
Social and economic crisis
The reports about Venezuela in all the world’s media present a truly terrible situation, reflecting the famine, hopelessness and rage that swept the country. The Economist in a July 29 report summed up: “Venezuela is in chaos.” People are trying to cross the border with Colombia to buy food and medicine in a neighboring country, but the authorities closed the border on Venezuela on Sunday.
Is this another bad recession or something more serious?
The most commonly used index for comparing recessions is GDP.
According to the IMF, Venezuela’s GDP in 2017 is 35% below 2013, or 40% lower if GDP per capita is calculated.
This is a much sharper reduction than during the Great Depression of 1929-1933 in the US, when the estimated US GDP fell by 28%. This is slightly more than the decline in Russia (1990-1994), Cuba (1989-1993) and Albania (1989-1993), but less than in other former Soviet states at the time of the transition, such as Georgia, Tajikistan, Azerbaijan, Armenia and Ukraine, or such war-affected countries as Liberia (1993), Libya (2011), Rwanda (1994), Iran (1981) and most recently Southern Sudan.
In other words, the economic catastrophe of Venezuela outshines any similar history in the US, Western Europe or the rest of Latin America. It is obvious that a 40% drop in GDP per capita is a very rare event. But several factors make the situation in Venezuela even more bleak.
First, while the decline in Venezuela’s GDP from 2013 to 2017 includes a reduction in oil production by 17%, this excludes the fall in oil prices during this period by 55%. Exports of oil fell by $ 2,200 per capita from 2012 to 2016, of which $ 1,500 was due to oil prices.
This is huge, given that Venezuela’s per capita income in 2017 is less than $4 thousand. In other words, while per capita GDP fell by 40%, national income declined by 51%.
Countries tend to mitigate such negative price shocks, putting some money away in good times and borrowing or using these savings in bad times, so that imports should not shrink as much as exports shrink. Venezuela could not do this, as it used the oil boom to pay off foreign debt.