Gone is the age when speaking or writing publicly about the US dollar in Venezuela could mean being prosecuted or going to jail. It is becoming more and more common to use banknotes in the form of american dollars instead of bolivares. Of course, it does not happen officially, nor are salaries related to the cost of the products. This week, the money released to support the election effort, along with the end-of-year bonuses, has caused the devaluation to skyrocket, with the sharp and disorderly effect on the prices of all products. Inflation worsens with the impact on food availability and hunger, while the deteriorating conditions of fuel and public services continue. The Report analyzes the regime’s advance towards the Russian model and the Biden era that is beginning soon.

Russian model: the regime and private companies?

After years of conjecture about the application of a Chinese or Vietnamese model in Venezuela, the Russian model finally seems to have prevailed. There is a deliberate process going on. For several months, the treatment of some key public officials in the government-corporate relationship has been looking more like the management that existed under democracy. The regime is applying a policy of coexistence and acceptance with private companies, which allows them to reorganize themselves and rethink about aiming for the future. This within a much smaller country from an economic perspective, but viable for those who understand that reality and build or adapt their company accordingly. Of course, companies know that they work on quicksand, there is always the doubt about what that the regime will do tomorrow. When it changes its mind, there is no resource, neither political nor practical, to which businessmen can resort. There are many other examples, such as the fact that offers in US $ have been allowed to be launched in the capital market.

Particularly with the recent approval of the Anti-blockade Law, what is being seen seems to resemble more and more the Russian model. There, an important part of the economy is in the hands of “oligarchs” who operate in coexistence with the political powers and are at risk, even of losing their companies and freedom, if they deviate from the regime or some powerful enemy element within it.  A question that only time will solve is the possibility that a “non-oligarchic” company will have of being able to survive in the Venezuelan version of the model.

Internal politics

The regime advances at a hurried pace towards the parliamentary elections. They feel that they have the social situation sufficiently dominated to be able to control potential protests. They have also “legally” taken away the independence of most political parties, including those of their own coalition. For this reason, their main political objective is the elimination of the National Assembly and for this they publicly say that “We do not care about international recognition of the elections”. Very low participation is expected, but neither has the promotion of the opposition’s popular consultation failed to raise the participation of the population.

Datanalisis reports that in its most recent survey the leaders’ approval are: Guaidó – 27%, María Corina Machado – 24%, Leopoldo López – 15%, Capriles – 14%, Maduro – 13% and Henri Falcón – 4%. The result clearly shows the strong rejection of Maduro, but also that the interviewees reflect the division of the opposition. The most surprising thing is the growing recognition of María Corina Machado and her differentiated position from the rest. Will it be an indicator of a future with a different composition of forces and a different opposition unity? Even Leopoldo López was photographed with Antonio Ledezma in Madrid !!

The Biden era

The Economist makes an interesting analysis of the challenges and opportunities of the Biden era in its article “The opportunity after the crisis”. Here are some of the points mentioned there:

  • Covid-19 has shaken the global economy. The trajectory of the three great forces shaping the modern world has changed: (1) Globalization has been truncated, (2) The digital revolution has been radically accelerated, and (3) The geopolitical rivalry between the United States and China has intensified.  At the same time, the pandemic has worsened one of the biggest scourges: inequality. Furthermore, by demonstrating the effect of a lack of preparation for a low-probability, high-impact disaster, it has opened our eyes to the inevitability of climate change.
  • Because of Biden’s characteristics and approach, the United States will again have a disproportionate ability to shape the post-pandemic world. Joe Biden, a moderate consensus-builder whose political positions have always been around his party’s center of gravity, is an unlikely architect of a bold new era.
  • In international politics, Mr. Biden will repair relationships and reaffirm the values and global role of the United States. On most major international issues, Mr. Biden’s presidency will offer more of a change of focus than of direction.
  • The opportunity is there, the question is whether Mr. Biden will take it. The risk is, both locally and internationally, that the Biden presidency will prove to provide more of soothing words than effective action, whether or not it is restricted by a Republican Senate.

The fact that there has been unanimous approval of the new US ambassador to Venezuela by the US Congress worries those who expect something very different from Biden.